The ever-escalating prices for energy in California contribute to the high cost of doing business in the state. For that reason, the column below, written by Ronald Stein, is being republished here.
The crusade to obliterate the oil industry in California would not only damage the state economy, but increase our costs of imported energy sources to supply the state with the energy it needs.
The California economy would be more dependent on importing our energy via trucks, rail and ships from other states and jurisdictions with less stringent environmental regulations, resulting in an increase in greenhouse gases as well as a rise in costs for our transportation fuels, energy and every product that is the basis of our standard of living in California.
California remains one of the largest economies in the world even though the Golden State’s 38 million citizens live on an “energy island” with the Pacific Ocean on one side and the Rocky Mountains on the other. In the past 40 years, California’s population has doubled, but the air is cleaner today than it was in the 1970s.
The state economy is dependent on the continued mobility of its 30 million registered vehicles and the fuel supply to maintain its growing fleet. With our unique mandates on transportation fuels in California, the state is subjected to gas prices that are constantly higher than the national average.
California’s 100,000 electric vehicles are the most any state has. However, the other 97 percent of California’s 30 million vehicles that do not run on electricity or other alternative fuels consume more than 40 million gallons of transportation fuels daily. This equates to just over one gallon of gasoline or diesel a day per vehicle. Additionally, trucks transporting cargo containers shipped into the state’s ports, and planes flying in and out of private and commercial California airports rely heavily on transportation and aviation fuels from in-state manufacturers.
California is the third-largest producer of oil in the United States, supporting hundreds of thousands of jobs and billions in state and local tax revenues that fund public safety, schools and other valued services. The more oil we produce in state, the less we have to rely on foreign and out-of-state oil to meet our energy needs. However, California has the most aggressive climate change and energy regulatory standards in the country.
The state produces less than 40 percent of its crude oil in state, and augments its needs with foreign imports and importing decreasing amounts from Alaska, via tankers into our ports, and some by rail from other states to support the in-state manufacturers of our transportation fuels.
California’s flagship climate change policy, Assembly Bill 32, was signed into law in 2006, at a time when the state was contributing a minuscule 1 percent to the world’s greenhouse gases. AB32 has dramatically changed the state’s transportation fuels and shifted our energy sources away from oil to renewables..
Transportation technologies and fuel standards developed over the years have resulted in improved transportation efficiencies. Nearly a decade later, California still contributes a miniscule 1 percent and has had little to no impact on the reduction of global greenhouse gas emissions. Yet, the state is on a go-it-alone crusade that generates millions of dollars for the government at the expense of businesses and the financially challenged.
Just last month, Gov. Jerry Brown proposed an ambitious 40 percent reduction target in greenhouse gases by 2030. Brown has also made it his goal to increase the state’s renewables to 50 percent by 2030 – up from the current 33 percent renewable portfolio standard by 2020 – and to cut petroleum use by 50 percent.
These policies present a major challenge because much of the technology has yet to be developed, and there will be massive infrastructure investments required to make these additions. Biofuels are not yet available at the commercial scale needed for widespread adoption, and electric vehicles remain costly and out of reach for most California drivers.
Many of the state’s industries and much of its infrastructure depend on energy from oil and gas – sewage treatment, water purification systems, irrigation, agricultural productivity, air conditioning, central power stations and communication systems, to name a few. Oil and gas have industrialized the world around us and power our economy, which drives new technologies and developments.
California needs a balance in its energy sources, not the elimination of an energy source that has supplied the state with dependable and affordable energy since the late 19th century.
Ronald Stein is founder of PTS Staffing Solutions, a technical staffing agency headquartered in Irvine. His column, RON STEIN: Don’t forget oil’s role, first appeared in the Press Enterprise in Riverside, Calif., and in the Los Angeles Business Journal. Reprinted with Ron Stein’s permission.
Joe Vranich of Spectrum Location Solutions helps companies find great locations in which to grow. Joe also is a keynote speaker on the challenges and benefits of businesses relocating out of high-cost, high-tax, over-regulated states. More information is available at Biography and Speaking Availability.