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Archive for the ‘State Lands Commission’ Category



Swap Meet: Oil & Con Con Meet Gambling Cowboys

Saturday, July 18th, 2009

namlogoNew push for Con Con: Latest player to jump into the battle for a state constitutional convention is the New America Foundation, the influential non-partisan. D.C.-based think tank, which maintains a formidable intellectual presence in California.

The foundation, which is home to big brain journalists including Calbuzz contributor Mark Paul and Blockbuster Democracy blogger Joe Matthews, is sponsoring two community forums in Southern California over the weekend. On Friday, they also released a new research report recommending that convention delegates be average folks, rather than the collection of hacks, flacks and usual suspects who are no doubt lying in wait to hijack the process.

Author Steven Hill based the conclusion on evidence gleaned from case studies of the “deliberative democracy” movement, a host of ordinary people political groups that tackled projects ranging from the rebuild of the World Trade Center to the economy of Northeast Ohio and post-Katrina reconstruction in New Orleans:

“Some have wondered if average people are capable of the kind of in-depth understanding of complex issues that will be necessary for redesigning California. But the truth is, average Californians are the only ones who can lead our state out of the quagmire of special interests and partisanship that currently is paralyzing it. That’s because average Californians bring a special quality that too many incumbents and the political class in general do not have: a pragmatic desire to solve the state’s problems, regardless of ideology, partisanship or career self-interest…

“Participants often demonstrate a ready willingness to mix and match elements from differing political approaches – market-based, public sector, ‘conservative’ or ‘liberal’– as long as the result is a solution that will work for themselves and their communities.”

oil_platformOn-again off-again on-again off-again oil project on-again: Enviros around the state are scrambling yet again to block the controversial PXP oil drilling project off the Santa Barbara coast (a Calbuzz debate on the issue is here and here ), amid reports that approval for the offshore plan is part of a proposed framework in the closed door, Big Five budget negotiations.

“We heard it’s back in the budget and the governor is lobbying very aggressively for it,” said one key player in the long-running fight over the project. “They would put (the project) into a trailer bill.”

If approved, the PXP project would be penciled in for producing $1.8 billion in royalties over the next 14 years, including $100 million in the current fiscal year; foes of the plan, which was defeated earlier by the State Lands Commission but resurrected by Schwarzenegger in the budget fight, bitterly complain that California could reap much more – $2-4 billion annually – and with less risk to the environment, by enacting an oil severance tax on existing production.

California currently is the only one of 22 oil producing states that does not have such a tax., according to a drill down piece by LAT business columnist Michael Hiltzik who went deep into the weeds on the issue.

Environmental groups “started (Thursday) sending dozens of alerts to tens of thousands of coastal activists letting people know that Schwarzenegger’s Vampire was up and stumbling around yet again,” one coastal advocate told Calbuzz. “How many times do you have to kill something, anyway?”

Fox100

What happens in Vegas: Over at Fox and Hounds Daily our friend Joel Fox is trumpeting an editorial in the Las Vegas Review Journal that fiercely attacks suggestions the Prop. 13 be amended, and assails California for having high taxes and too much regulation of business.

As California teeters, Democrats are left to contemplate how this living laboratory of liberalism — with its smothering taxes, intrusive regulatory apparatus, generous social services and well-fed, heavily unionized public sector — could now find itself on the brink of collapse.

Rather than conclude the obvious — that decade after decade of high-tax, anti-business, anti-growth policymaking designed to sate an ever-expanding state is ultimately unsustainable — a handful of liberals have found their culprit: Proposition 13, a measure limiting property taxes passed by voters in 1978.

Not surprisingly, neither the editorialist nor Fox mentioned that Nevada closed its own multi-billion dollar deficit this year by raising taxes, that the state’s unemployment rate is higher than California’s or that the Silver State was ranked the #2 most dysfunctional government in the nation.

To his credit, Fox did acknowledge that “one of the reasons I’m reprinting the editorial here (is) because it quotes me.”

Golden Lone Star State: Perhaps the biggest humiliation for California to date is a takeout in The Economist that compares the Golden State unfavorably to Texas, ferhevvinsake. Noting that Chief Executive magazine has ranked California “the very worst state to do business,” compared to the top-of-list rating of Texas, the piece concludes that “Mr. Schwarzenegger’s lazy governorship could come to be seen not as the great missed opportunity but as the spur for reform.”

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Yes: A Safe $1.8B Drilling Deal, Blessed by Enviros

Tuesday, June 30th, 2009

sheehyBy Tom Sheehy
Special to Calbuzz

Since going on-line this year, Calbuzz has treated its readers  to timely reporting on the twists and turns of the Tranquillon Ridge project.  As the Legislature continues to debate the components of a budget plan to close a gap of more than $24 billion, we believe there’s still an opportunity to move forward on this project in a fiscally – and environmentally – responsible manner.

To re-cap: the product of an unprecedented agreement between an oil company (Plains Exploration and Production, or PXP) and a coalition of environmental groups, the project would allow PXP to access oil on state lands from an existing platform in nearby federal waters.  In return, the firm will give the state an immediate up-front $100 million royalty advance and about $1.8 billion over the next 14 years.  But it’s not just about the money:  once the project ends, the company will give 3,900 acres of central coast property it owns for permanent conservation and public use.  It also will stop production on four of its offshore rigs and take out all of its onshore production facilities.

Despite strong support for this project, the State Lands Commission didn’t allow the project it to move forward early in the year.  But in May, Gov. Schwarzenegger proposed an innovative approach to giving the project another opportunity for review.  The Governor has asked the Legislature to approve a bill restoring authority to the State Director of Finance for a limited window off time to reconsider certain offshore oil lease applications and determine if they’re in the best interest of the state.

The Governor maintains his strong opposition to new oil drilling off California’s coast and he continues to support the moratorium.  This project maintains the moratorium on oil drilling under the California Coastal Sanctuary Act of 1994 because it would operate from an existing oil platform in federal waters. It takes advantage of a specific exemption that allows for new leases if oil is leaking from an existing state field into an actively producing federal field — which is what’s happening in this case.  A State Lands Commission report determined that the ongoing drainage is reducing the ultimate amount of oil reserves that the state could recover by as much as 260,000 barrels a month.  That is $4 million per month in lost revenue to the state.

Or, think of it this way:  at a time when we’re being forced to pare back spending in education, health care, and virtually every area of state government, we’re essentially giving $4 million a month to the federal government.

The entire infrastructure needed to conduct this project is in place and already operating.  There will be no new platforms needed for the state to realize the project’s benefits.  Approval of the project will allow the state to capture the oil in an efficient manner while securing significant revenue.

Most importantly, this proposal doesn’t “subvert the public process” as some critics have alleged.  The Governor’s proposal builds upon five years of rigorous state and local government public environmental review by the Lands Commission and Santa Barbara County, as well as a meticulous California Environmental Quality Act (CEQA) review. If approved, the California Department of Finance would only have the authority to reconsider the project after additional public hearings. If Finance decides to move ahead, the project would still have to go through the California Coastal Commission’s public review process and also gain approval from the federal Minerals Management Service (MMS).

We are also confident that when the project ends, the state is strongly empowered to enforce the shutdown of oil operations.  PXP made a firm commitment and negotiated a binding agreement with a coalition of environmental organizations to take out its platforms, remove its onshore facilities, and provide a valuable package of environmental benefits.  There also are multi-layered enforcement tools in place:  permits for this project will be enforceable by the State Lands Commission leases and the County and Coastal Commission permits.  In addition, the terms of the agreement between PXP and the environmental coalition uniquely allow the California Attorney General the right to intervene in court to enforce the agreement.

These are difficult, challenging, and unprecedented times in California.  We believe the Tranquillon Ridge Project is a common-sense, environmentally responsible approach to leveraging the state’s own resources to help generate vital new revenues at a time of great fiscal need.

No: Arnold’s Plan is a Quick and Dirty Power Grab

Tuesday, June 30th, 2009

Garamendi PhotoBy Lt. Gov. John Garamendi
Special to Calbuzz

The Schwarzenegger Administration, through the California Department of Finance, wants to “drill baby drill” off the Golden State’s coastline, and they’re willing to undermine 70+ years of checks and balances to do it. Will we let them get away with it?

In late January, I joined California Controller John Chiang in a two-to-one vote of the California State Lands Commission (SLC) to reject what would have been the first new oil lease in California waters in more than 40 years.

As chair of the SLC, I take my responsibility as a steward of the environment very seriously, and I did not think the proposal was in the best interests of the state. Beyond the inherent environmental risks posed by all new drilling projects, I did not think assurances included in the proposal to decommission oil platforms decades down the road were enforceable.

Unfortunately, the Department of Finance is unable to take “No” for an answer. For the first time in our commission’s 70-year history, their proposal is to bypass the SLC and permit the Department of Finance to authorize the oil lease off the Santa Barbara coast. Let’s keep in mind it was 70 years ago that a major scandal (link) at the Department of Finance led to the State Lands Commission having the authority to issue leases.

What is wrong with this picture? Plenty, and at the expense of California.

The Schwarzenegger Administration refuses to tax Big Oil companies that now extract oil in California to fund critical health care services, children’s programs and education. This tax would generate $1.2 billion dollars annually.  On Monday, the Governor warned he will veto the budget bill package including an oil production tax.

Instead the administration is taking the quick and dirty way out. Big Oil has offered to California $100 million dollars to seduce the state into granting the first new oil drilling lease in California since the Santa Barbara oil spill 41 years ago, a spill that covered hundreds of miles of ocean and over 30 miles of sandy beaches with more than three million gallons of crude oil.

Learning from history means not blindly repeating the mistakes of the past.
At an open hearing of the SLC last month in Santa Monica, Controller Chiang and I again joined together to voice our opposition to this power grab, backing a resolution calling on the legislature to reject the Department of Finance’s proposal. During public comment, 12 environmentalists agreed with our position – including representatives from the Sierra Club and Environmental Defense Center – while not a single individual rose in support of the Department of Finance’s end-run around the SLC.

”We cannot get away from the fact that this is the first new offshore oil lease in 40 years, and if I sound upset, it’s because I am,” said Susan Jordan, director of the California Coastal Protection Network. “I have never seen such a blatant power grab.”

“We don’t always agree with the decisions made by this body, but we recognize and support the hard work of your staff and the public process designed to enforce the protection of our precious state lands,” added Joe Geeber, California Policy Coordinator for the Surfrider Foundation.

The science is clear; drilling for new oil now exposes our coast to the potential devastation caused by an oil spill and contributes to the greenhouse gases that chill our ability to combat global warming. As I’ve said in the past, California must focus on becoming a renewable energy leader and leave the extraction of new sources of fossil fuels to the 20th century.

But you don’t have to agree with me to appreciate the larger issues at stake.
To bypass the SLC and give the Department of Finance authority to approve this oil lease threatens the independence of the SLC, a commission designed to be an independent environmental watchdog.

More than 35 environmental organizations are opposed to the Department of Finance’s plan, including some that were initially supportive of the oil lease proposal. To allow the Department of Finance to usurp the independent commission responsible for protecting our state lands and waters means we will lose one of the most important safeguards available to California ‘s natural habitats.

How Oil Scandal Shaped State Politics

Wednesday, June 10th, 2009

crude-politicsThe current political brawl over offshore oil drilling between the State Lands Commission and Governor Arnold’s Department of Finance has historic roots in a Depression-era scandal that helped shape today’s energy politics in California.

The Commission and the Finance Department have clashed in recent weeks over the governor’s push to resurrect a proposed lease for drilling off the coast of Santa Barbara. The Commission rejected the plan in January, but the Department of Finance this week released draft legislation to overturn that decision and give authority over the disputed lease to the Schwarzenegger administration.

Ironically, the State Lands Commission was created in 1938 precisely to take away from the Department of Finance the power over oil drilling on public lands, in the wake of a bribery and kickback scandal that helped bring down the administration of Republican Frank Merriam at the hands of Democratic reformer Culbert Olson.

“Olson accused Merriam of having let the Department of Finance…become ‘the agency of private interests,” according to “Crude Politics,” a UC Press history of state oil policy by Paul Sabin. “The…scandal and the investigator’s report on legislative corruption, both in 1938, opened a window on internal administrative and legislative corruption in Sacramento.”

Among other things, the book recounts how oil companies seeking leases on state land were told to “go see Rosie,” a reference to Merriam’s chief political consultant, Joe Rosenthal, while famed lobbyist Artie Samish meanwhile doled out slush fund cash to lawmakers backing the Finance Department’s plays on behalf of Standard Oil and other companies.

The scheme unraveled in 1938, when Samish was arrested for refusing to testify at a grand jury looking into allegations that Department of Finance executives held up oil companies for stock, cash, kickbacks and nepotism, in exchange for the rights to drill on state oil tidelands and sites offshore Southern California.

“Vast Tideland Oil Fraud,” screamed the Chronicle on August 14, 1938, disclosing details of the scandal that eventually capped a decade in which oil politics dominated the Capitol and the courts.

At issue in Olson’s victory over Merriam was the charge that oil companies, not the public treasury, were receiving maximum benefit from oil drilling on state lands. Over the next decades, the politics of the issue changed dramatically, so that the central concern became conservation of beaches and tidelands, not financial exploitation of the minerals beneath them.

The current controversy over the Tranquillon Ridge project reflects that political framework – alas, it has no exciting charges of bribery and corruption, at least to date – as Lands Commission chairman and Lite Gov. John Garamendi is accusing Schwarzenegger’s Department of Finance of trading long-term environmental protection for short-term economic gain. Led by chief deputy director Tom Sheehy, the finance department insists the deal would benefit both the environment and the budget.

Fishwrap Friday: Goo-Goos Gone Wild (Not)

Friday, May 29th, 2009

Will It Be California Forward or Backward? California Forward, the good government group with name-brand backing and top-drawer credentials, will be meeting in Sacramento next week to decide whether to become irrelevant.

Okay, that’s not exactly on the agenda Wednesday. But as the Bay Area Ccafwd_logo1ouncil aggressively forges ahead toward a constitutional convention, its weak brother reform group is moving closer to beside-the-point status — despite backing from the California Endowment, the Evelyn and Walter Haas Jr. Fund, the William and Flora Hewlett Foundation, the James Irvine Foundation and the David and Lucile Packard Foundation.

The bi-partisan group, headed by former Assembly Speaker Bob Hertzberg, and Southern California Automobile Association executive Thomas McKernan, has a whole bunch of proposals for Kumbaya stuff like better representation, smarter budgeting and fiscal management.

All of which boil down to: Managing the status quo.

Unless the group resolves next week to take a clear and strong stand on something controversial – say, undoing the two-thirds vote requirement to pass a state budget — the consensus-obsessed California Forward might as well rename itself California Backward.

It’s ironic. The guy who had been heading up the group was former White House Chief of Staff Leon Panetta, until he got called on by President Obama to go to DC to run the CIA. And the group’s roster remains impressive: after Hertzberg and McKernan, it’s got Bob Balgenorth, President of the State Building and Construction Trades Council of California, AFL-CIO; Phaedra Ellis-Lamkins, Chief Executive Officer, Green For All; Bill Hauck, President, California Business Roundtable; Antonia Hernández, President and CEO of the California Community Foundation; Fred Keeley, Treasurer, Santa Cruz County; Stewart Kwoh, President and Executive Director, Asian Pacific American Legal Center of Southern California; Donna Lucas, Founder, Lucas Public Affairs Group; Sunne Wright McPeak, President and Chief Executive Officer, California Emerging Technology Fund; Bruce McPherson, Former California Secretary of State; Chuck Poochigian, Former State Senator and Assemblymember; Cruz Reynoso, Former Associate Justice, California Supreme Court and the Third District Court of Appeal; Constance Rice, Co-Director, Advancement Project and Gene Voiland, Principal, Voiland Enterprises LLC.

But by dithering and doddering about whether to take clear stands on big issues, California Forward risks squandering its stature and taking a permanent back seat to the Bay Area Council on the government reform front . . .

Inmates Push for Asylum Management: Having the Legislature seize control of the University of California from the Board of Regents “is like having the management of GM take over Microsoft.”

That was the best line making the rounds Thursday, one day after Senator Leland Yee trumpeted a whacky proposal for a constitutional amendment to exchange UC’s 141-year old practice of independent governance for an exciting new future hunkered down in the Capitol muck of petty politics.

“It’s ridiculous, silly stuff,” Board of Regents Chairman Dick Blum told Calbuzz. “The people in Sacramento are going to tell us how to run the UC?”

In an interview, Blum vigorously defended the Regents’ management, contrasting the system’s balanced budget with the state’s $25 billion deficit and its AAA bond rating with the state’s, um, ZZZ rank. He also noted UC’s ability to attract top academic and administrative talent, portraying the regents’ hiring of President Mark Yudof a year ago as a milestone in improving the system’s management. Yudof is a nationally recognized leader of the accountability movement, which stresses the use of measurable results systems for universities: “You won’t find a better, proven manager of a hugely complex, public higher education institution anywhere.”

Yee and his allies have attacked the recent approval of mid-six figure salaries for campus chancellors as just the latest outrage of out-of-control executive compensation at UC. Blum said that the average income for the top executives of the system’s 10 campuses are “35-to-40 percent below market” and that the biggest problem for the $18-billion UC is that the state keeps cutting its share of the overall budget, which now amounts to less than $3 billion.

“There is such a thing as the marketplace, there is such a thing as reality,” Blum told us.

Yee’s chief of staff, Adam Keigwin, said the senator is not seeking “day to day management” of the UC system, just more “oversight” that would give the Legislature greater authority over what he described as abuses involving pay for top university officials. Which sounds kinda like a distinction without a difference . . .

The Meg and John Show: Having captured a smashing 37 percent of the vote in California last November, Arizona Senator John McCain will give Republican wannabe governor Meg Whitman some tips on running strong in the Golden State today.

Her Megness is scheduled to appear with Joe the Plumber’s best friend at a Town Hall meeting in Orange County, followed by a “private event” (i.e. fundraiser) in Fresno, according to her campaign. For media mavens desperately seeking a rare opportunity to pose a question to the elusive eMeg, she’ll have a press avail at 2:50 pm (and that’s not 2:51 p.m., either, mister!) in the Executive Room of the Piccadilly Inn. The release on the event says it’s for “Credentialed Media Only” and that part is in BOLD CAPS, so don’t even try sneaking in if you’re some kind of low-rent blogger or something…Wait a minute, credentialed by whom? . . .

Offshore Plan Sinking Fast: Look for a whole lotta pushback on Arnold’s controversial plan to raise revenue by drilling for oil offshore of Santa Barbara, when the State Lands Commission meets Monday in Santa Monica. It’s the first meeting of the group since Governor Deltoids announced the proposal, which would end run a commission vote turning down the project last January . . .

Today’s Sign the End of Civilization is Near: Four states now prohibit drivers from smiling for the photos on their licenses, according to a USA Today report. Arkansas, Indiana, Nevada and Virginia all require you to wipe that grin off your face because it messes with their high-tech, face-recognition software. Bring on the Vulcans! . . .

Spell Check: Congratulations to Kavya Shivashankar, 13, of Olathe, Kansas, who won the National Spelling Bee Thursday by correctly spelling “laodicean” which means lukewarm or indifferent in religion or politics. Pronounced “lay-ah-di-see-an,” this is NOT what makes a good Calbuzzer.