Bruce Maiman

Big Oil plays Chicken Little on gas prices and AB 32

For months, the warnings were endless: Come January, gas prices would jump as much as 76 cents a gallon. “Put the brakes on the Hidden Gas Tax!” implored countless Facebook ads.

Anyone seeing pump prices skyrocketing?

Never mind that oil prices plummeted last year as a gallon of regular dropped in California from $4.13 last summer to $2.59 now – $2.48 in the Sacramento region. I’m sure most of the many thousands who hit the Facebook “like” button didn’t bother to investigate the California Drivers Alliance, or 15 other groups harping the same sky-is-falling message. A casual observer likely believed their claims of being a grass-roots group rising up against devious bureaucrats trying to sneak another tax past you.

In truth, what was hidden was the real identity of these front groups, all funded by the oil industry – the Western States Petroleum Association and the California Independent Oil Marketers Association, longtime opponents of Assembly Bill 32, California’s 2006 landmark legislation to reduce greenhouse gas emissions to 1990 levels by 2020. The cap-and-trade system expanded this year to cover vehicle fuels.

I’m not here to debate AB 32. The oil industry is more than welcome to oppose it. Just don’t lie. While the industry probably considers its campaign little more than accepted “astroturf” propagandizing, it almost certainly banked on tricking consumers, voters and even politicians.

Neel Kashkari, the former Republican gubernatorial candidate, swallowed the bait last summer, calling it a “hidden” gas tax when he criticized Gov. Jerry Brown over cap and trade. Meanwhile, 40 state lawmakers, including 16 Assembly Democrats, formally urged Brown to back off the regulation. Nothing like an election to get you singing whatever tune necessary to keep your job.

Whether the candidates were duped or genuinely oppose cap and trade, did any of them bother to note that AB 32 was approved by a democratically elected body, and that in 2010, voters defeated Proposition 23, the industry-backed measure to suspend AB 32, by 23 percentage points?

In 2012, as other industries began complying with cap and trade, the oil industry asked to be excluded until 2015. “We did that,” California Air Resources Board spokesman Stanley Young told me, “then, when it came time for them to come into the program like every other California industry, they started squawking, rolling out this disingenuous campaign and saying, ‘No, it shouldn’t be us.’”

The 76-cent projected increase comes from a study ARB did in 2010, before the cap-and-trade program was implemented, projecting a 19 percent rise in fuel costs by 2020. At $4 a gallon, that’s 76 cents – but in 2020, not 2015. How convenient that the industry’s minions left that out.

“They were deceptive, manipulative and lying,” said Severin Borenstein, co-director of the Energy Institute at UC Berkeley’s Haas School of Business. “They were in a position to know this information intimately and were irresponsible in their dissemination of it. That’s not the kind of conversation we need to have on issues this complex.”

Jay McKeeman, vice president of the oil marketers association, tells me differently: “We have been trying for the last five years to have a more articulate dialogue with the administration and ARB on carbon emission reductions, but have been stonewalled completely. Last summer was the culmination of frustration, so what do we have left? You take it to the streets.”

Tupper Hull, vice president of the petroleum association, said he was “not in a position to expand much” beyond a statement that it will now comply with cap and trade as best it can.

We’ll see. Legislative efforts last year to either delay or block expansion of cap and trade went nowhere, but a bill introduced this legislative session would exempt fuels from the program.

It won’t surprise me, though, if someone starts blaming cap and trade and “hidden gas taxes” for the inevitable global rise in oil prices, or even the annual seasonal increases when refineries change to summer blends in February. Don’t be gullible enough to fall for it.

Bruce Maiman is a former radio host who lives in Rocklin. Contact him at brucemaiman@gmail.com. Follow him on Twitter @Maimzini.

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