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Capitol Watchdog | Big Oil Slick Captures Capitol

The power of California’s oil refiners is always felt but rarely visible in Sacramento.  It was on full display at Wednesday’s press conference when the Governor, State Senate leader and Assembly Speaker acknowledged that California's effort to lead the world by cutting petroleum use in half was dead for the year due to oil company lobbying and advertising.

The most powerful leaders of the state could not budge the junior members of their own party in the Assembly, who stubbornly clung to the oil industry’s bogus claims about rising costs for consumers in the district.  In fact, as Consumer Watchdog has shown, and even oil traders acknowledge, cutting petroleum usage will drive down fuel prices.

The balance of power in the Capitol of the state that has pioneered so much progress showed itself to be of the Chevrons, by the Shells, for the Exxons. 

To their credit, Senate Pro Tem Kevin de Leon and Gov. Brown vowed to forge on with determination and go to the ballot if necessary.  And renewable standards for utilities and other energy generation will be increased under already worked-out deals. But legislation to cut petroleum came off the table for the year, which took away its potentially revolutionary impact on upcoming UN talks in Paris that could have spurred a new global standard.

How the fossil fuel purveyors could capture such landmark legislation in a Democrat-dominated institution comes down to some old problems with Sacramento politics that need to be remedied if Big Oil is to be made smaller.

It should be hardball, not softball.  On big ticket reforms like this, opposed by a hated industry with deep pockets, the inside game rarely works. But the arm on the shoulder and persuasive words in the back room is how the good guys like to play.

It’s hard to imagine a cadre of Democrat Assembly members holding out on votes if it was made clear that their contributions from big oil companies would be on display for their constituents to see, particularly when they are up for election every two years. Such hardball tactics, though, are traditionally the province of the oil companies and their ilk.  

No matter what the debate, reformers are almost always decried in the Capitol as pariahs for even mentioning a politician’s campaign contributions. The oil companies keep it simple, talk directly to the public, and say what they want, even if it’s lies. You have to have a strong outside game and speak frankly about following the money if you want to make changes in the building.  

This was a big bill. The bigger the bill, the greater the tendency to play it safe. Safe doesn’t work when you’re fighting the most dangerous and deceitful industry in the world.

It’s all about money.   Not just the campaign contributions to the holdouts, or the campaign dollars the oil industry held over their heads. To most voters, it’s about how much money will go in or come out of their own pockets. Yet there was little engagement on what proved to be the key issue: what will consumers pay.

That’s a tragedy. Because as Consumer Watchdog has been charting all spring, oil companies have been charging Californians a buck more for their gasoline all year and raking in record profits from their refining business as a result.  It’s all because four oil refiners, who control 78% of the market, keep us on perennially low inventories of gasoline. Ask any economist, or oil trader, and he will tell you that SB 350 would cut demand for petroleum, increase its supply and drive down price.

The legislature and the Governor failed to make a move on the Golden State gouge, promote the role of SB 350 in lowering fuel costs, or require more simple transparency and accountability for oil refiners this year, despite repeated pleas.  Such reforms to lower pump prices would remind voters and holdout legislators that it is the oil companies ripping us off, and they are not to be trusted.  The public hates oil companies and knows it's being gouged.  If the legislature wants the public’s trust, it needs to deal with consumers’ financial problems and get the high ground over the oil industry.

The battle can still be won through a ballot measure, a special session, or next year. It’s heartening to see the Governor and state legislators so engaged against oil companies on such critical issues for the planet.  But they need to take the gloves off and start dealing with the public’s biggest gripes with Big Oil, gouging at the pump, if they want to win round 2.