Big Oil should read the fine print

It was widely reported last week that the public relations and lobbying blitz funded by the major oil companies succeeded in toppling one of Jerry Brown’s three key climate goals of his second term—a 50 percent reduction in petroleum use in cars and trucks in the state. That target was contained in SB 350 authored by pro tem Kevin De León, arguably the most significant bill of the 2015 legislative session.

Campaign finance and lobbying reports will show the actual amount of spending next month when semi-annual reports are due. But one thing is certain: the petroleum lobby spends millions on law firms and lobbyists whose sole purpose was to pour over the sixty-some pages of SB 350 and ferret out the provisions most anathema to the polluters lobby.

Buried in the back pages of SB 350 is a full codification of the 2030 and 2050 climate targets that the industry thought it defeated.

Which leads to the next question: Did the petroleum industry’s army of lobbyists who flooded the capitol on the last days of session simply not read the legislation or did they engage in perhaps the most spectacular instance of malpractice since the passage of AB 32 in 2006?

To be sure, at the behest of companies like Chevron and other members of the Western States Petroleum Association (WSPA), a block of pro-oil Democrats and Republicans conspired to force the petroleum reduction provisions of SB 350 overseen by the state air board to be amended out of the bill.

But the oil company partisans and their legislative allies apparently failed to read past the first five pages of the bill. Buried in the back pages of SB 350 is a full codification of the 2030 and 2050 climate targets that the industry thought it defeated, along with a powerful new set of directives to state energy agencies to meet those targets.

Add that to the apparent new resolve the Governor has to hold the oil companies accountable – along with the authority already under state and federal law to reduce pollution from oil — and the oil companies may just have lost both the battle and the war.

Here’s how. And stay with me, because it’s worth reading until the end.

Little noticed in the back provisions of SB 350 are a series of new directives that use the marketplace, competition with billion dollar utilities, and the multi-billion dollar tech innovation sector to supplant gasoline as the predominant transportation fuel in the state.

Mass deployment of electric cars, trucks, and buses will cut California’s petroleum use by itself by 18 percent in the year 2030

These “Transportation Electrification (TE)” provisions, which combined other laws and funds from the oil companies’ carbon fees, will fundamentally re-orient climate policy, both in California but internationally as well. They reduce petroleum use and pollution dramatically. And they democratize zero polluting cars and trucks for all.

Here’s how it works:

Under SB 350, within 15 years, California will generate at least 50 percent of its electricity from renewable energy and double its savings from energy efficiency gains. The bill also makes replacing oil as the dominant transportation fuel a core mission of the billion dollar electric industry. This will ramp up the ability of Californians to “fill up” at home on cleaner electricity that is the cost equivalent of dollar-a-gallon gas.

Mass deployment of electric cars, trucks, and buses will cut California’s petroleum use by itself by 18 percent in the year 2030 (four-fifths of the emissions reduced will come simply from more efficient cars).  But families in poor and working class communities need to be able to plug-in their vehicles where they work and live.

Under SB 350, the IOUs can—and will now very much want to– make this happen because for the first time they can make money at it.

It also establishes that, a “principal goal” of electric utility “resource planning and investment” is “to improve the environment and to encourage the diversity of energy resources through improvements in energy efficiency, development of renewable energy resources, and widespread transportation electrification.”

Few noticed but included in the final version of SB 350  is at least a piece of the 2030-2050 GHG targets Senator Pavley tried to get in SB 32, which the polluters thought they defeated as well.

The IOUs are multi-billion dollar corporations that make investments on a scale that could actually erode the monopoly enjoyed by Big Oil via the gas pump.  And, unlike the oil industry, the electric industry is regulated by state agencies, such as the California Public Utilities Commission (CPUC).  SB 350 directs the CPUC to order the electric utilities under its jurisdiction to:

“..file applications for programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative, and reduce emissions of greenhouse gases to 40 percent below 1990 levels by 2030 and to 80 percent below 1990 levels by 2050.

Reducing dependence on petroleum is self-explanatory, but the other goals listed in this directive deserve attention as well:

Meeting air quality standards means complying with state and federal Clean Air Act deadlines for smog and ozone pollution that chokes kids’ lungs. On the ground, this means essentially stopping burning fossil fuels in SoCal and in the Central Valley;

Achieving the goals of the SB 1275 Charge Ahead California Initiative means placing one million electric vehicles on California’s roads by 2023 and ensuring that communities historically exposed to a disproportionate share of air pollution enjoy the benefits of zero-emission vehicles.

Reducing emissions of greenhouse gases to the levels specified by SB 350 means we need to generate electricity almost exclusively from renewable resources like wind and solar and use that clean electricity to power our cars, trucks, buses, trains, forklifts, etc.

(Incidentally, few noticed but included in the final version of SB 350  is at least a piece of the 2030-2050 GHG targets Senator Pavley tried to get in SB 32, which the polluters thought they defeated as well.)

Given the scale of these goals and the imperative to act quickly to meet them, the utility “programs and investments to accelerate widespread transportation electrification” required by SB 350 cannot be small-potato pilots. They must be transformative investments that make driving on electricity cheaper and more convenient than driving on gasoline.

Utility efforts to accelerate widespread transportation electrification required by SB 350 also should lower the costs even further of meeting SB 350’s goal

The widespread adoption of electric vehicles enabled by this investment should actually pay dividends for all utility customers. Under SB 350 and other provisions of the Public Utilities Code, when electric utilities take in new revenue (in this case, money that would have gone to oil companies), they are required to return any surplus to customers in the form of lower electric rates.

The IOUs are eager to get into this business. They already are proposing a collective $1.1 billion investment in electric vehicle charging infrastructure and other market acceleration programs.

Those proposals are designed to charge cars when there is spare capacity in the electric grid and when wind and solar energy are abundant, in line with the RPS and other directives contained in SB 350:

“Deploying electric vehicles should assist in grid management, integrating generation from eligible renewable energy resources, and reducing fuel costs for vehicle drivers who charge in a manner consistent with electrical grid conditions.

In other words, utility efforts to accelerate widespread transportation electrification required by SB 350 also should lower the costs even further of meeting SB 350’s goal of generating at least half of California’s electricity from renewable resources like wind and solar.

Bottom line: the oil companies may have succeeded in removing one provision of SB 350, but missed several others that more than make up for the amendment they sought.  It appears the oil industry actually lost the battle in SB 350, just as they are losing the war to perpetuate a high polluting, dirty energy economy.
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Ed’s Note: Steven Maviglio is a Democratic strategist who has worked on a number of clean energy issues.