Moratorium on emissions credits leaves 65,000 jobs in limbo

Unemployment has reached record levels in California.

The situation is unacceptable and so it is imperative that my fellow members of the Legislature join me in supporting a bill that will restart 65,000 jobs without costing the state a dime.

Those jobs have been put on hold because of a lawsuit-forced moratorium on emissions credits for essential services and small businesses in the South Coast Air Quality Management District (SCAQMD).

Those credits are used by hospitals, police and fire stations, dry cleaners, water districts, recycling centers and others to acquire the required air permits at no cost.

Buying the permits on the open market would cost about $5 billion.

Without the permits these organizations cannot use new generators and other equipment that often would make a tremendous reduction in air pollution. In other cases, new construction can't be completed or sits idle because equipment can't be installed.

SB 696 will solve the concerns that brought about the moratorium and SCAQMD officials say they are prepared to begin issuing the permits immediately upon the bill's passage.

Without it, taxpayer dollars are being wasted and small businesses built with a lifetime of hard work are being destroyed in just a few months.

Perhaps worst of all, jobs that are sitting there just waiting to be filled, go wanting.

More than 1,000 permits were stopped by the moratorium and another 3,000 may be affected.

Examples are everywhere in the four-county district, adding to our severe unemployment problems.

In Whittier, a new $35 million police headquarters cannot be completed or occupied without permits for the building's generators.

In Pomona, the owner of a furniture finishing company invested in modernized spray equipment that greatly reduces emissions. He can't use it because he can't get permits. The new environmentally-friendly spray booths sit idle, employees have been laid off and the owner told a local newspaper he's trying to hold on financially until the end of the year.

In Orange County, a company that sells equipment used in environmental clean-up operations can't makes sales because customers can't get permits for the machines. The company has laid off 70% of its workforce.

In Riverside County, a water district has spent $500,000 on an emissions reduction project, but may have to pull the plug on it. If forced to purchase emissions credits for air permits, the water district estimates the cost would run more than a million dollars or twice as much as the project itself!

Therein lays the problem and the reason the emissions credit bank exists in the first place. Buying the credits on the open market is so expensive that it's a non-starter for essential services and small businesses.

According to the SCAQMD, buying the credits necessary for a gas station would cost an estimated $234,000. For a tortilla fryer the estimate is $1.6 million. And to buy the credits required for a project converting landfill gas to energy would cost an estimated $115 million.

Those who forced the moratorium have been critical of the use of emissions credits to build critically needed small power plants. It is important to note that under SB 696, any new power plants would have to be authorized by the California Energy Commission and would be subject to the state's strict environmental regulations. It is not true that any power plant would be authorized by the passage of SB 696.

Meanwhile 65,000 jobs are being destroyed by the ongoing moratorium. This should be unthinkable, especially in this toughest of job markets.

SB 696 is urgently needed to help get California's economy moving again. It will allow for the immediate reestablishment of the SCAQMD ‘s emissions credit bank. That will give public services and small businesses access to the district's priority reserve of credits and allow them to participate in the district's strict permitting program that protects public health while allowing essential services and job-creating facilities to be built.