Archive for the ‘State Lands Commission’ Category



Grabbag: Big Ideas, Bad Ideas, Burton Ideas

Wednesday, May 19th, 2010

One of the coolest new campaign tools we’ve ever seen was developed recently by 32-year-old Crystal Martin, a marketing consultant in Yuba City, who thought up and produced an audio mailer for Democrat Jim Reed of Redding, who is running against U.S. Rep. Wally Herger (R-Chico).

It’s an audio mailer — like those greeting cards you can get with recorded songs and voices — that recounts how Herger said “Amen, God bless you, now that’s a great American,” after a man stood up at one of his town hall meetings in Redding and declared himself a “proud right-wing terrorist.”

You can see the mailer here and listen to the pitch — mostly in Reed’s voice. But the mailer also includes a recording of  Keith Olbermann of MSNBC’s “Countdown,” who labeled Herger the “Worst Person in the World.”

Having raised very little money, Reed’s initial mailing was just 2,500. But the mailers generated attention, in the Redding Record Searchlight and on Daily Kos, after a writer for the blog got one in the mail and immediately wrote it up.

Martin, a graduate of UC Davis, said she came up with the idea at her daughter Lorelai’s fourth birthday party when the little girl threw away other birthday cards and was only interested in the one that had audio. “I had an epiphany,” Martin said. If she could do that for clients, people might actually listen to what they had to say.

So she searched until she found a company that could produce the voice chip in bulk and made it happen — for about $1.50 per mailer. The idea was so hot, she’s already picked up jobs from AARP and from a big conservation group.

Martin’s consulting business is Smart Marketing and her new venture is Mailpow, which also now has a system for recording individual voices which can then be sent to legislators, voters or whomever. Calbuzz is impressed.

Keeping score: We have great respect for Joel Fox, keeper of the Prop. 13 flame, even if we often disagree with him on policy matters, but his attempt to trumpet a third-rate poll, purportedly showing Meg Whitman 17 points ahead of Steve Poizner in the GOP primary, is utterly lame.

The survey is sponsored by Fox’s own Small Business Action Committee, and with him and his Howard Jarvis Taxpayers Association cronies strongly backing eMeg, the poll has zero credibility.

Its fanfare release was no doubt aimed at changing the campaign narrative showing Poizner closing fast on Whitman, but if the new PPIC poll, scheduled to be made public tonight, confirms that the GOP race is close, Fox’s move will look just plain silly.

As the outfit most afflicted with OCD about public opinion research methodology, Calbuzz is pleased to see that no one in and around the Rough and Tumble orbit bit on the Fox poll, except for radio talk show host and blogger Eric Hogue, who’s in the tank for Whitman anyway.

On the other hand, we totally agree with Hogue’s argument that Poizner’s dumb attack on eMeg over pornography is beyond the pale.

Putting aside the constitutional issues, the move not only looks desperate but also is likely to backfire: Whitman’s connection to porn being peddled on eBay is tangential at best, and raising the subject three weeks out from the election makes Poizner, not her, the one who seems sleazy.

As for Whitman’s new big idea, convening a statewide “grand jury” to investigate alleged waste, fraud and abuse in government spending: Really?  Brother Lucas over at California’s Capitol reported out this dog with fleas, and said most of what needed to be said to put it to rest.

Except for one item: As far as Calbuzz can tell, the governor doesn’t have the power to convene a grand jury. We asked Whitman’s campaign to tell us what authority would allow it and spokesman Tucker Bounds told us: “Meg would pursue legislation to create the Statewide Grand Jury on Fraud, Waste and Abuse.” Oh. So she wouldn’t have the power to do what she’s proposing unless the Democrats gave it to her? Right.

Shooting at lifeboats: Although Governor Schwarzmuscle’s abrupt withdrawal of support for the Tranquillon Ridge oil project off  Santa Barbara effectively killed the project, a just released analysis by the State Lands Commission suggests the proposal probably wouldn’t have won approval in any case.

The study, sent by Executive Officer Paul Thayer to the three members of the commission Tuesday, concludes that a revised agreement between the PXP oil company and Santa Barbara’s Environmental Defense Center did not allay several environmental and legal concerns that led to the project’s defeat last year.

After the commission, on a 2-to-1 vote, turned down the first PXP-EDC agreement in 2009, the oil company and the enviros reworked their previously-secret agreement and released a new version last month,  hoping the changes would overcome opposition by commissioner and state Controller John Chiang, or win the support of recently appointed Lieutenant Governor Abel Maldonado; the third member of the commission represents the governor, who strongly backed the T-Ridge proposal until his recent flip flop.

But a review by the staff of the commission concluded that promises by PXP to stop drilling in federal waters, in exchange for a new lease to drill into state waters from an existing platform, might not be legally enforceable, because authority for the federal leases would rest with U.S. Mineral Management Service, regardless of the terms of the PXP-EDC agreement.

The staff also said that a new state lease could encourage oil industry efforts to gain more leases for drilling in federal waters, by breaking a 40-year precedent of not allowing new drilling in waters controlled by California, up to three miles from shore.

“Further, the new agreement does not address the Commission’s concern over the increased risk of oil spills created by oil and gas development at Tranquillon Ridge,” the report said. “This risk and its consequences have been demonstrated in the past off Santa Barbara and are now affirmed by the huge spill in the Gulf of Mexico following the explosion and loss of the Deepwater Horizon platform.”

The Burton correction goes national: Check out NPR’s “Wait Wait… Don’t Tell Me!”. Go to the 00:49 mark in the “Lightning Fill in the Blank” portion of the show to hear John Burton and his “Go bleep yourself” correction on Calbuzz as an answer in the national news quiz.

Also, Jason Linkins at Huffington Post took note in his Eat the Press column.

If that’s not enough, check out Craig Silverman’s “Regret the Error” column in Columbia Journalism Review, in which the whole back story is spelled out and the “correction” is analyzed in terms of who wanted (and got) what out of the deal.

Why Arnold’s Pick for Lite Gov Actually Matters

Monday, November 23rd, 2009

platformnewUpdate 5:15 p.m. The governor’s pick for Lieutenant Governor is state Senator Abel Maldonado, R-Santa Maria, who voted against the controversial Tranquillon Ridge oil drilling project off the coast of Santa Barbara. If Maldonado remains consistent with that position as lieutenant governor, sponsors of the project would fall short in an effort to overturn an earlier decision against it at the State Lands Commission, where former Lite Gov.  John Garamendi cast the key vote rejecting the proposal.

Of course, given his political  history, putting “Maldonado” and “consistent” in the same sentence is pretty much an oxymoron.

“He was a ‘no’ note in the Senate, and I’m glad he did that,” said Assemblyman Pedro Nava, D-Santa Barbara, who has led the fight against the T-Ridge project in the Legislature. “But while he demonstrated good judgment one time, we’re going to need to know a lot more about his positions on ocean protection, state lands and other public trust issues. This is not a simple position.”

Nava’s comments reflect just one of many political cross-currents and conflicts that will confront Maldonado and Schwarzenegger as the nomination moves through the Legislature.

BTW, our sources say Democrats John Laird, and his successor Assemblyman Bill Monning both are likely to run for Maldo’s open seat. Here’s a piece on why the Lite Gov appointment matters, posted before  Arnold’s announcement.

By David Ferry
Special to Calbuzz

While pundits and journalists have been contemplating how many buckets of warm spit* can fit in the Lieutenant Governor’s office, California environmentalists have anxiously awaited Governor Schwarrzenegger’s appointment with more substantive concerns.

Amid the speculation following the election to Congress of former Lt. Gov. John Garamendi, a number of students of state government say the governor’s pick matters not a whit. Ted Anagnoson, a professor emeritus at CSU Los Angeles, told Calbuzz, essentially, “who cares?”

“We still basically have no real need for a Lt. Gov…I think the office is a total waste of money. We would survive just as well if the governor’s job went to the head of either the Assembly or the Senate if the governor were indisposed, or to one of the other statewide officials.”

However, there is at least one key policy area where Arnold’s selection could make a big difference. The governor remains a strong proponent of Plain Exploration and Production Co.’s proposal to drill in state waters off the coast of Santa Barbara County, and many environmental groups fear the appointee could help fulfill the lingering calls from the 2008 Republican National Convention to “Drill Baby, Drill.”

The lite gov is, of course, a de facto member of the State Lands Commission, and Garamendi — a former Department of Interior official and anti-offshore environmentalist — cast the deciding vote to scuttle the PXP deal in January.

However, as Timm Herdt reported, the proposal is far from dead. Paul Thayer, executive director of the commission, said that PXP could “absolutely” resubmit its application whenever it wants for a lease in state waters at Tranquillion Ridge; the process could move quickly because the original paperwork is still good. PXP CEO James Flores said in a conference call two weeks ago that the company is just waiting to see who Schwarzenegger will choose as Garamendi’s replacement.

A new push by PXP would instantly restart a bitter intramural conflict between state environmentalists. A number of Central Coast groups and local officials – who typically oppose offshore drilling – including one formed in response to the 1969 spill that started the movement – have signed on to the deal. But plenty of other conservationists aren’t buying it, even though the plan was brokered by the respected Environmental Defense Center, which has been in the center of previous offshore battles.

As Calbuzzers know, Assemblyman and anti-oil crusader Pedro Nava has been fighting the PXP proposal since the beginning. He says that he won’t be surprised if Schwarzenegger makes T-Ridge a “litmus test” for picking his appointee.

Susan-Jordan-File2_t150Susan Jordan, a Santa Barbara County environmentalist who’s married to Nava and running for his termed-out seat in 2010, went a step further. She said in an email that any new pro-PXP Lt. Governor “is also likely to be pro-oil, pro once-through cooling, pro-desalination, etc. That is the real danger. A vote beholding to the Governor has far greater implications then just this project.”

EDC and other supporters back the PXP proposal because it calls for the company to end all drilling in the area – including its current operations in federal waters – by 2022. The company also has agreed to donate thousands of acres of Central Coast land for protection. However, when the Lands Commission voted the project down in January, it said these agreements between PXP and the EDC did not appear to be binding.

Linda Krop, chief counsel for the Santa Barbara based Environmental Defense Center, lamented how politicized the process has become, when Calbuzz asked about the deal and the prospect of a new Lieutenant Governor. She said the EDC worked out the agreement solely for its environmental benefits, and maintained that the project would actually safeguard the coast. Although she said she hopes the governor won’t use a T-Ridge Test in his pick, she would like a second chance before the Lands Commission: “We do believe that we can address the concerns raised by the SLC,” she said.

The family drama may not matter much if Schwarzenegger fills the post with someone opposed to the project. Of frequently floated names, Republican state Senators Abel Maldonado voted against the plan while Dave Cogdill voted in favor on this summer’s attempt to push the deal through the legislature as part of the budget. Former Assembly Speaker Bob Hertzberg has founded three alternative energy businesses since retiring. GOP Assemblyman Mike Villines, on the other hand, punched ‘Yea’ in the infamous expunged vote this summer and freshmen San Diego Assemblyman Nathan Fletcher was one of two Republicans who abstained.

Of course, the governor’s pick is subject to approval by the legislature, which could theoretically strike down anyone in favor of drilling. But more important criteria for confirmation seem to be the concerns of legislators already lining up to run for the job and the fact the new lite gov would have a leg up on a future race for a big statewide office. Never mind that, according to Tim Hodson, Professor and Director for the Center for California Studies at CSU Sacramento, only three Lite Govs have gone on to become Governor or U.S. Senator.

Professor Hodson suggested that Arnold could render all the speculation moot: “With Gov Schwarzenegger it’s always possible that he go for the theatrical and leave it vacant.”

*The late Texas Senator John Nance Garnet famously referred to the job of be4587_732572791127_3626475_42588334_5742619_ning vice president as “not worth a warm bucket of spit,” and the post of California lieutenant governor presumably would be worth even less. Over the years there has been some dispute about the noun Garner used in his formulation; many sources make it “a warm bucket of piss” and the Senator reportedly once called a reporter who employed the spit substitution “a pantywaist.”

Calbuzz Bay Area Correspondent David Ferry works for the Climate Watch desk of KQED-FM’s “California Report.”

Slimy Parsky Oil Play and a Yorba Linda Lecher

Thursday, September 10th, 2009

waynepunchAs we first reported late Wednesday, tax reform commission Chairman Gerald Parsky sucker-punched at least some members of his panel by sending them an unexpected, last-minute recommendation to generate “tens of billions of dollars” of new revenue by vastly expanding offshore oil drilling in state waters.

Also in the last-minute materials was the final proposal for a nearly-flat (two-tier) personal income tax  that would give a massive tax cut to the richest California taxpayers and a teensy-weensy slice to the poorest taxpayers. Coupled with the knuckle-dragging business net receipts tax, the Parsky proposals are about as regressive as musclebound Gov. Schwarzblunder and his diminutive, cigar-sucking sidekick Susan Kennedy could ask for.

But at least commissioners and the public knew that was coming.  The revival of Schwarzenegger’s proposal (which we understand was the brainchild of his economics guru David Crane) to gain approval of the twice-defeated Tranquillon Ridge offshore oil project as a tax-revenue scheme — now that was a nasty surprise.

“There are several economic reasons for permitting new oil leases,” reads the oil-drilling recommendation, to be considered by the commission today, when it meets to craft a final proposal to send to the governor and Legislature. “Unlike all other revenue sources, the oil companies, which would make these new royalty payments, have requested the ability to do so. Revenues from this source would create no economic distortions, and the economic activity being taxes could not migrate elsewhere.”

The recommendation came as a shock, not only because the offshore issue was only casually discussed during the commission’s months of hearings, but also because it deepened the atmosphere of secrecy and sleight-of-hand in which Parsky assembled the agenda for the panel’s final, crucial meeting. As a political matter, such an expansion of offshore drilling would also directly conflict with decades of state policy, in which environmental protection of coastal waters and beaches have trumped economic issues, resulting in a long-held moratorium on new leases.

The proposal for more offshore drilling seems to have worked its way onto the commission’s plate at least in part at the request of conservative Hoover Institution economist Michael Boskin, who also sits on the board of Exxon Mobil.

The commission’s analysis cites a State Lands Commission study estimating that there are 1.635 billion barrels of “recoverable oil on state lands that are not currently under lease.” The U.S. Minerals Management Services, which controls leasing and drilling on federal lands beyond three miles from shore, projects an additional 10.1 billion barrels that remain “undiscovered but is technically recoverable.”

Current royalties paid by oil companies on a small number of existing, small state leases vary from 16.7 percent to 55 percent of the revenues they generate, which altogether yield about $400 million for the state.

“If the ban (on new leases) were lifted,” the recommendation says, “it could make available the 1.63 billion barrels (and) California would receive a share of revenue from new leases on federal lands off of the state’s coast.”

“Over time, the state could receive as much as $34 billion in royalty revenues from new leases in California waters, assuming oil trades on average $70 per barrel and the average royalty rate is 30 percent.”

The recommendation, sure to draw the ire of environmentalists and coastal legislators, pointedly does not suggest imposing a new severance tax on oil companies. California is the only oil-producing state that does not have such a tax, which is being pushed in the legislature by several members of the Assembly, including Assemblymen Pedro Nava, D-Santa Barbara, and Alberto Torrico, D-Fremont.

BTW: There’s no frigging way the agenda and agenda packet was ready early enough for the public to have legal notice. Not that Parsky seems to give a rat’s butt.

duvall

Eternal Filthiness of the Adulterous  Mind: To be honest, Calbuzz had never heard of (now) ex-Assemblyman Mike Duvall, a Republican from Yorba Linda, until Wednesday morning. But after this and this , and his resignation a few hours later, it’s hard to imagine there’s anyone left on the planet who hasn’t heard of him now. Seriously, you just know that in, oh say, Guinea Bissau or the Republic of Nauru or on Chuuk Island, guys were walking up to their friends all day and saying, “Mike Duvall,” and then both of them would fall down in the street and laugh uncontrollably.

We’ll leave it to others to draw the great moral lessons implicit in the NFW tale of a dumbass holy roller, family values, fat lying tub of goo who brags over an open mike about cheating with kinky sex, not only on his wife but also on his mistress, in favor of noting that no matter what he does or where he goes the rest of his life, Mike Duvall will be a walking double entendre:

Take for example, this lede on a recent Capitol Weekly piece about him:

“If you want to know what issues are important to Assemblyman Mike Duvall, R-Brea, just look at what he did the other weekend.”

Or this from his soon-to-be shut down web site:

“In February 2009 Assemblyman Duvall was named “Legislator of the Year for 2008″ by the California Attractions and Parks Association for his opposition to Governor Schwarzenegger’s proposed ‘fun tax.’”

You also gotta wonder whether Chapman University wants its plaque back:

“Chapman University awarded Duvall the Ethics in America Award in 2000 for his ‘demonstration of the highest standards of ethical integrity.’”

And finally this: The hearing room where Duvall let his potty mouth run wild is festooned with a large color portrait of the late, great Jesse Unruh, a man of great appetites who famously said of lobbyists, “If you can’t take their money, drink their liquor, fuck their women, and then come in here the next day and vote against them, you don’t belong here.”

Of course, that was in the days before women were lobbyists.

PS: Get this, from Duvall’s web site:  “I want to make it clear that my decision to resign is in no way an admission that I had an affair or affairs. My offense was engaging in inappropriate story-telling and I regret my language and choice of words. The resulting media coverage was proving to be an unneeded distraction to my colleagues and I resigned in the hope that my decision would allow them to return to the business of the state.”

Got it.

Swap Meet: Greasy Poll, eMeg Patrol, GOPer Trolls

Saturday, September 5th, 2009

oilrigMargin of error: The oil company based in Houston that is trying to win a lease for drilling in state waters off the coast of Santa Barbara is e-blasting an alleged summary of poll results about the controversial project, providing a case study of how scientific public opinion surveys can be manipulated for political purposes.

Days after Calbuzz examined the misuse of polling data, both on our site and in the L.A. Times, Plains Exploration & Production Co. (PXP) is circulating a memo titled “Highlights from Statewide Poll,” which claims – surprise, surprise — that two-thirds of California votpxpers favor their proposed Tranquillon Ridge project. The sheet consists of a series of bullet points, all of them purporting to show statewide support for the project among some genus or species of Californian.

PXP said the survey was done by Fairbank, Maslin, Maullin & Associates — a polling firm for which we have high regard but which does a lot of work for advocates and candidates with clear-cut agendas. Our request for the oil company to send us the actual survey results, questions and cross-tabs was unsuccessful, as were those of Assemblyman Pedro Nava, D-Santa Barbara, Pedro-Navawho’s led the legislative fight to defeat the project last month.

Nava is putting out a daily press release demanding PXP cough up the data, and sarcastically asking if they asked a series of slanted questions that would favor the anti-drilling position: “I intend to ask a question every day until I get some answers,” Nava told us. “It’s obvious they don’t intend to release it – they intend to continue to mislead us.” Calbuzz sez: Free the Secret PXP Poll – and All Political Prisoners!

blakesless

Oleaginous update: The proposal to authorize the T-Ridge lease, which was earlier rejected by the State Lands Commission, has been resurrected by Assembly minority leader Sam Blakeslee, R-San Luis Obispo, Nava told us, using a “gut and amend” maneuver to dump the substance of an energy bill and insert the PXP project language previously voted down in the Assembly.

Lots of subplots on this one, including the fact that fingers were pointed at Blakeslee  last month when Capitol Weekly disclosed that the Assembly vote on the PXP measure had been expunged from the record. Blakeslee, who denied it, nonetheless sure had a motive: he represents a coastal area but voted in favor of the lease. If he, as expected, goes after the Senate seat now held by Abel Maldonado, who opposed the offshore project, he’d represent even more coastal constituents.

Calbuzz has a hunch that the endgame of all of this will be a PXP-sponsored ballot initiative seeking to circumvent the Legislature and win voter approval for T-Ridge. The strategy would run some risk, however, as it could also trigger support for proposals to impose a severance tax on companies extracting oil in California, the only state that doesn’t have such a levy.

megyoutubeSteve (doesn’t) Heart eMeg: Insurance Commissioner Steve Poizner, whose team rolls out an average of 316 press releases a day bashing GOP guv rival Meg Whitman, may finally have gained some traction with one of his attacks.  It’s a You Tube spoof of the “Love Boat” which skewers Her Megness for some gushy comments she made about Van Jones, the former Oakland lefty who’s become Obama’s green jobs adviser – and is now in the free-fire zone over at Fox News.

If you haven’t seen the video, it’s pretty damn funny and you can watch it here. Chronicler Joe Garofoli has the play-by-play of the Stevie Wonder-eMeg exchange on the issue here, including Team Whitman’s Friday statement, which tries to make the whole thing go away. The defensive tone, the length and detail of it, however, shows that Poizner has stung her by highlighting associations with lefties for the edification of conservative GOP voters. Only 276 days until the primary!

More on eMeg: Whitman’s 493-second encounter with reporters in Santa Barbara Tuesday  smoked out some interesting new nuggets (block that metaphor!) about her views on key issues, demonstrating why it actually matters that All Right-Thinking Journos in California keep pressing her campaign for interviews, avails and accessibility.  Examples:

1-When Calbuzz asked her about offshore oil drilling, she disclosed that she’s changed her position since the beginning of the campaign:

“I would say that when I started this process, I was against offshore oil drilling and then I began to understand deeply the new technology that is available to extract oil from existing wells – slant drilling and other things and I think we ought to look at this very carefully because there’s no question that the resources off the coast of California and other parts of the country can help us reduce our dependence on foreign oil…I don’t think it’s sending a bad (environmental) signal. You have to look at the situation in which we find ourselves…We have to say times have changed and we’ve got to look at this again.”

2-When Susan Rose, Calbuzz correspondent on women’s issues, asked her about abortion rights, eMeg filled in some blanks, both on her position and on her perspective of how it may affect her among pro-life GOP voters:

“I am pro choice…I’m not for late term abortion or partial birth abortion and I did vote ‘yes’ on the parental notification proposition that went on the ballot. And I don’t want to take choice away from women…(Her position) will help in some sectors and it will not be helpful in others… (P)eople will know my positions on the social issues and if they are single issue voters and I don’t agree, they won’t be for me but hopefully they will put the whole package together and say ‘got it.’”

3-When Mark Mason (CB handle: “Planet Santa Barbara”) asked why voters would think she’d do a better job than Arnold Schwarzenegger, who made similar promises, she expounded on the differences between them:

“The governor has done a number of good things. Workman’s compensation…I’m a fan of Proposition 11, the redistricting (measure) but I will say that the results – unemployment, infrastructure, the health of the economy, are not good and the governor has to be accountable for the results…The biggest difference …is my business experience.”

McCain_Meg_art_400_20080610122428

eMeg fun factoids: She’s a Leo and the youngest of three kids (which explains a lot, as all astrological students of birth order know); her mother served four years with the Red Cross in New Guinea during WWII (“she knew where the need was greatest”); she was a high school jock (tennis, swimming, soccer); Princeton ’73 (fourth class in history with women in it); came to California when her neurosurgeon husband had to choose between Harvard and UCSF for a residency (“your mother lives in Boston, we should go to California”); her favorite Hasbro toy while working there was Mr. Potato Head (NOT  Barney or Teletubbies, she pointed out).

But what about the little guy? In recent months Jerry Brown has been putting on a clinic on how to align his public duties as Attorney General with his political aspiration to be governor again, getting his fingerprints on  high-profile cases from Anna Nicole to Michael, all the while attacking international drug rings, sleazy investment firms and consumer scams of every persuasion –- not to mention pushing to include climate-change impact statements as a requirement for new developments.

govjerrybrownNow Brown is taking aim at the mother lode of populist outrage, launching an investigation of Health Management Organizations, in which he promises to probe how HMOs “review and pay insurance claims submitted by doctors, hospitals and other medical providers” amid reports that the state’s top five insurance provides are denying nearly 40 percent of claims.

“These high denial rates suggest a system that is dysfunctional (ed. note – ya think?),” Brown said in statement put out by the AG’s press office, “and the public is entitled to know whether wrongful business practices are involved.” Cue it up, Omar: “In-DEED.”

Three-dot Republicanism: Here’s how Whitman is playing among right-wingersTonyStricklandBball

Latest sign that the quixotic crusade to ban independent, decline-to-state voters from GOP primaries is in trouble comes from Sen. Tony Strickland, R-Moorpark. Taliban Tony is the real, hardcore deal, a drown-it-in-the-bathtub movement conservative who made his bones playing Ronald Reagan in his 4th grade class debate in 1980  and came up through the ranks serving as squire to Skinflint Tom McClintock;  Timm Herdt reports that Strickland turned thumbs down on the no-indies rule, which can’t be good news foken-khachigian-copyr Flashreporter Jon Fleischman, sponsor of the plan…

Hell freezes over: Ken Khachigian, the squish-squishing senior statesman of California Republicanism, caught giving advice to Barack Obama.

Have a great weekend.

Key Democrats Plan New Push for Oil Severance Tax

Thursday, August 6th, 2009

johngaramendiGov Lite John Garamendi and Assemblyman Pedro Nava tell Calbuzz they are preparing a new political offensive to push aggressively for a 9.9 percent per barrel severance tax on oil producers in California.

Having led the charge to defeat the governor’s proposal for a lease authorizing oil drilling in state waters off the coast of Santa Barbara, the two are seeking to harness the momentum built by the statewide coalition of environmental groups that quickly mobilized in that fight.nava

“The taxpayers have been giving their oil free to the oil companies for 100 years, and it’s time for the oil companies to start paying it back,” Garamendi, who’s running for congress, told us. “The environmental community, having rallied to defeat (Schwarzenegger’s offshore leasing plan) is very engaged on this.”

Nava, who’s seeking the Democratic nomination for attorney general, said in an interview that he is also working with environmental groups “invested in opposition to offshore drilling” as he puts together legislation for a severance tax to raise $1-1.5 billion a year.

“Do the math,” Nava told us. “The governor was willing to sell of the coast for $100 million – this would raise over $1 billion a year.”

Torrico-AlbertoA proposal to impose such a tax and earmark the money for higher education, by Assemblyman Alberto Torrico – who’s also running for attorney general – is pending in the Legislature. Nava said his bill would not restrict the use of new revenue within state government: “Earmarking the money divides people,” he said.

Because California is the only oil-producing state that does not impose a severance tax, such a proposal could gain political traction, at a time when Democrats insist they will not support further education and social welfare cuts after joining in passing a red-ink budget that slashed many programs.

Passing a tax increase would be an uphill fight because it requires a two-thirds vote in both houses. However, the public unpopularity of oil companies offers Democrats perhaps their best opportunity to pressure Republicans on a revenue-raising measure. Schwarzenegger at one point suggested an oil tax, but dropped the idea in the face of opposition by GOP lawmakers.

John Doherty, a legislative aide to Torrico, told us the assemblyman did not have the votes to get his proposal out of the Assembly Revenue and Taxation Committee earlier this year; Torrico plans to use the rest of the current legislative session to build support for passing it in 2010, he addedm a wide-open election year in which many legislators will be seeking statewide offices.

A 9.9 percent severance tax would generate about $1.4 billion a year with oil at $70 a barrel, according to the lieutenant governor. A barrel of crude oil was priced at $71.97 on Wednesday.

In the interview with Calbuzz, Garamendi also addressed three related issues, saying he:

-Expects the governor, having “set the stage for a new re-run,” to try again to push through the controversial Tranquillon Ridge project defeated in the Assembly after passing the Senate by one vote, perhaps when the Legislature reconvenes later this month.

-Plans at next week’s meeting of the State Lands Commission to hold a risk-assessment hearing to weigh the relative merits of drilling in state waters from offshore and onshore facilities: “Intuitively, drilling from the land, you’re not likely to spill in the ocean (while) drilling from the sea you’re likely to spill in the ocean,” he said, “We want a data base to determine the facts.” The issue is timely because Venoco Oil Co. is proposing an onshore slant drilling project in state waters off Santa Barbara, not far from the Tranquillon Ridge project.

-Dismisses speculation that if he (Garamendi) wins his congressional race, Schwarzenegger will be able to hand-pick a successor as lieutenant governor who would swing the balance of power on the lands commission in favor of authorizing an offshore lease. The governor’s nominee would have to be confirmed by the Democrat-dominated Legislature, three of whose members are already running for the post, he noted.

“There’s a lot of foolishness about this,” he said of speculation in Sacramento about such a scenario.