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Shocking news: Oil industry touts study backing continued oil dependence

Recently, an oil industry trade group released a study that ran cherry-picked data through an untested economic model to calculate the costs of California’s clean energy standards. Not surprisingly, it concluded that continued dependence on oil is far better than transitioning to a clean, efficient economy. Contrary to the numerous other economic analyses performed on the state’s landmark law – AB 32 – this paper ignores the economic benefits in order to draw the worst possible conclusions.

These conclusions form the foundation of an opinion piece published last month by another oil industry trade group (On state’s climate change policy, regulators courting disaster, July 10, 2012) that concluded clean, homegrown, renewable energy is just too expensive for Californians.

Actually, the true expense—the one we can’t afford—is doing nothing to grab hold of the emerging, multi-billion dollar clean-tech industry. As an organization that believes whole-heartedly in the clean energy businesses of California, we make investments in people and projects that will shape our clean energy future—not those that jeopardize that future by doubling down on the polluting technologies of the past.

We are not alone. Our fellow investors are not looking for the next great typewriter, the new and improved rotary phone, or the bigger and better horse-drawn carriage. Californians know we need real technological transformation, and are not afraid to face that future.

In the second fiscal quarter of 2012, California captured the top worldwide clean tech venture capital deals in solar, transportation and energy efficiency. Those deals – to SunRun, NanoSolar, Fisker Automotive, Coulomb Technologies, SmartDRive Systems and Soladigm – represent nearly $390 million in investment into our state. These dollars support real jobs and real families in California. The National Venture Capital Association estimates $100 million in venture capital funding helps create 2,700 jobs and $500 million in annual revenues for two decades.

These types of investments do not occur in a vacuum. Ensuring that there will be a market for these technologies goes a long way toward building investor confidence that these technologies will pay off when they make it from the laboratory to the hands of the American consumer. The very policies that are under attack from Western States Petroleum Association, like California’s Low Carbon Fuel Standard and AB 32, create market certainty for the state’s clean technology businesses. These standards give investors confidence that our state’s clean energy economy will continue to grow and that investing in clean tech businesses in California today will produce a healthy return tomorrow.

Given the power of California’s clean energy policy landscape to support the development of a successful clean fuels market in California, it is no surprise that WSPA and other opponents of AB 32 are spreading misinformation about both policies. WSPA has a big incentive to stop both policies in their tracks because a successful clean energy economy in California will undercut big oil profits. Ironically, these same oil companies could become economic partners in the inevitable transition to clean energy – instead of obscuring the truth and missing an opportunity to profit.

Oil companies like to tell us we can’t afford clean energy. I’d like to point out that most Californians can’t afford volatile gas prices that can shoot up to $5 per gallon in the blink of an eye. When gas prices do invariably skyrocket, policies like AB 32 and the LCFS will ensure that Californians have choices at the pump.

These policies also encourage investors like CalCEF to continue to inject dollars into our local economy for the benefit of jobs and California families. We need that more than ever, and we need a policy debate based on facts and transparent analysis.

Ed’s Note:  Dan Adler is President of the California Clean Energy Fund (CalCEF), a nonprofit, evergreen fund of funds created to accelerate investment in California’s clean energy economy.


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