California Field Report – September, 2015

By Olman Valverde and Mike Flores, of Luna & Glushon

On September 9, Governor Brown, with State Senator Kevin de Leon, (D-Los Angeles) the author of SB 350, stood together in the State Capital Building steps as the Governor announced the oil reduction mandate portion of SB 350 had been dropped.

The bill, known as The Clean Energy and Pollution Reduction Act of 2015, had three main components that were to be in effect by 2030:

  1. The reduction of California’s use of petroleum to 50%,
  2. Boost renewable-electricity use by 50% and
  3. Double the energy efficiency of existing buildings. The mandate for the 50% reduction of petroleum, was the center-piece of the bill.

There were also three main arguments used by those opposed to the bill, specifically the oil reduction mandate:

  1. Minority communities felt the mandate would hurt California’s economy and the working-class residents,
  2. The oil reduction mandate carried too much unknown economic costs, and
  3. The bill provided no provision that would legislate oversight of the California Air Resources Board (CARB), which currently has free rein in its oversight of SB 32, The California Global Warmings Solution Act of 2006.

The Governor indicated that the main roadblocks for moderate Democrats in the state Assembly dealt with CARB, an unelected body with broad power to set vehicle emissions and fuel standards to decide how the state will reduce oil use. The governor refused to pass the legislation if it calls for a reduction of CARB’s oversight powers.

The reaction was swift by the supporters of the bill. The Strategy and Communications Director Jamie Henn, of issued the following statement:

“Big Oil succeeded in gutting one of the most important provisions of this bill. Let’s face it: Governor Brown got his hat handed to him. Now, the clearest way he can fight back against the industry is by banning fracking in California – and that’s something he can do on his own, without the State Legislature. California has already dethroned King Coal – today’s news that the UC system will be joining the state’s pension funds in beginning to divest is a major step forward. Now, it’s time to take on Big Oil with everything we’ve got.”

On the other side, Catherine Reheis-Boyd, president of the Western States Petroleum Association, stated “Californians are best served by inclusive energy policy and by a legislative body that retains authority on issues so critically important to jobs, communities and our way of life.”

California State Assembly Elects New Speaker

Assemblyman Anthony Rendon (D-Lakewood) has been elected Speaker-Elect of the Assembly replacing Assemblymember Toni Atkins (D-San Diego). Rendon, who was elected to the Assembly in 2012, has the required 29 votes with the formal vote taking place in January 2016.

The Speaker-elect has a strong interest in the environment and served two years as head of California League of Conservation Voters. He has publicly stated his support of SB 350 and SB 32, both bills are strongly opposed by the oil & gas industry.

He is eligible to serve until 2024 and currently chairs the Assembly Utilities and Commerce committee.

Two Bills Left Standing in Final Week of Legislative Session

As the final week of the California Legislative is upon us, the number of bills attempting to impose further regulation on the oil & gas industry, fell from 30 to 2, with SB 350 and SB 32 still alive, although SB 350 (as discussed above) is a markedly different bill from what it was only this past Monday.

Senator Fran Pavley (D-Moorpark) is the author of SB 32, the bill, also known as the son of AB 32, extends the initial goals of SB 32 (2006 version) by dramatically reducing greenhouse gas emissions 80% below 1990 levels by the year 2050. Similar to what was discussed previously in SB 350, the bill also provides no oversight to CARB and open the door to the possibility of the raising taxes, fees and/or additional oversight of the industry.