Ukraine-Russia war may undermine California’s climate change legislation
The shock to the global financial system of the war between Russia and Ukraine is not only increasing the cost of gasoline in the US. as well as state efforts to reduce oil and gas production.
Although the US is banning Russian energy imports, California does not depend on Russia for oil or gas. However, the industry is already aggressively pushing the Newsom administration to approve more than 1,000 permits for new production to help “reduce the need to increase imports from foreign sources, such as Russia,” he said. Western States Oil Association in a statement. Experts tell Capital & Main that this will do nothing to stop rising gas prices in the short term.
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As legislation begins to address the committees of the California Assembly and Senate, three bills seeking to limit the power of the oil and gas industry in the state could feel the impact of this rapidly changing political environment. One would divest billions in state pension funds from fossil fuel assets, while another would shut down three offshore oil rigs. A third would promote greater transparency in the way companies that sell gasoline in California determine prices at the pump.
Senate Bill 1173
California oversees the largest public pension fund and the largest retirement fund for teachers in the country. Investments in fossil fuels for CalPERS and CalSTRS total more than $ 9 billion, including direct stakes and as part of larger funds, according to California free of fossilssponsoring a divestment invoice presented by Senator Lena González (D-Long Beach).
Since last year, both funds have held millions of shares in companies such as Chevron, ConocoPhillips, Marathon and Exxon. The bill would ban fund managers from investing in fossil fuels and require a full divestment by 2027.
“The two largest pension funds for state employees use enormous investment power to fund companies that drive climate change,” Gonzalez said at a news conference in February. The California State Building and Construction Trades Council, which commonly votes in tune with the oil industry, he later sent a letter to the Legislature in opposition to the bill.
Both CalPERS and CalSTRS own millions of shares in Gazprom, the Russian state oil company, whose revenues accounted for more than a third of the government’s total budget in 2021. Last October, those stocks peaked at nearly $ 11, but have now plummeted. $ 1.10. In addition to Gazprom, CalPERS e CalSTRS they also invest in state-owned oil companies in Saudi Arabia, Canada, Hungary, China and throughout Europe.
In an emailed statement, CalSTRS did not say whether it would release its stakes in Gazprom, but said it opposed the divestment bill. CalPERS had investments in Gazprom through stock indices they already have Russian values fellsaid a representative, and was in contact with Gonzalez’s office about the divestment bill.
Fossil Free California has published a report In the early months of the pandemic, it discovered that CalSTRS had lost more than $ 1 billion when oil prices fell in the first half of 2020. Today’s story is different: with rising stock prices, including record Chevron levels, oil companies non-Russians could be attractive for short-term benefits.
Proponents of her case have been working to make the actual transcript of this statement available online.
“To address climate change, we need to phase out the use of fossil fuels, and that means that in the long run the actions of fossil fuel companies are expected to be lower-performing and financially risky,” said Emily Kaufman, who works. in divestment. campaign with Fossil Free California.
Senate Bill 1322
Russian oil accounted for small amount of California oil consumptionbut state refineries were among those in the US largest recipients of Russian crude imported last year. The average cost of a gallon of gasoline in the state is now over $ 5.50.
A invoice written by Senator Ben Allen (D-West Los Angeles) would force companies to publicly disclose each month the difference between what it cost them to buy a barrel of oil and turn it into gasoline and the price they sold it at the pump.
The industry is using high gas prices to double the demand for more oil production in the state, but it won’t make much of a difference soon, he says. Mark Brownsteinsenior vice president of the Environmental Defense Fund studying the energy transition from fossil fuels.
“Increasing domestic oil production, even if you thought it was right, takes months, if not years, to scale. It would take years to affect domestic supply or affect global prices,” Brownstein said.
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Companies that sell gasoline in California have a history of charging excessive prices compared to the rest of the country, simply because they could.
A 2019 Report by the California Energy Commission found that Californians paid about 30 cents more per gallon for gasoline sold by Chevron, Shell and 76 (owned by Phillips 66) compared to the national average. Companies earned an additional $ 11.6 billion in California customer revenue between 2013 and 2018 compared to their domestic retail margins.
After the report was released, the California Department of Justice filed charges against a handful of companies importing gasoline into California, including Vitol Inc., SK Energy Americas and SK Trading, for allegedly manipulating prices at the pump after an explosion at a Torrance refinery in 2015 disrupted state supplies. The California Department of Justice told Capital & Main that it could not comment on whether it was also considering charges against Shell, Chevron or Phillips 66. Those companies denied the allegations.
According to a press release from Allen’s office, five oil refineries control 96% of gasoline produced in the state and still receive 30 to 40 cents more per gallon compared to smaller brands that sell gas in places like Costco and United Oil . The surcharge also began after the refinery exploded.
At a news conference for the bill, Consumer Watchdog President Jamie Court, whose organization supports the bill, said the additional costs per gallon in California could not be explained by surcharges associated with environmental policies such as limit and low trade in carbon. Fuel Standard, which only adds an additional 55 cents compared to the national retail margin. It is currently $ 1.09 higher in California.
The court said the oil and gas industry did not formally declare opposition to the bill, but blamed environmental regulations on the price difference.
WSPSA spokesman Kevin Slagle said its members are still reviewing the bill and may have more specific objections next week. “But what I can tell you now is that any scrutiny of pump costs should start by looking at California’s regulatory and tax environment. The first $ 1.27 per gallon we pay at the pump is now for taxes and regulatory programs.
Senate Bill 953
The only bill presented this session which proposes to limit oil and gas production in California would take offline three oil and gas platforms under state jurisdiction.
Offshore drilling in non-federal waters accounted for only 5% and 2% of state oil and gas production in 2019, respectively. The amount coming specifically from the three platforms, excluding other offshore production as in the THUMS Islands overseen by the city of Long Beach, is even smaller.
But the platforms still have the potential to cause catastrophic damage to marine life, according to the text of the bill written by Sen. Dave Min (D-Orange County). In fact, one of the platforms is currently offline after a pipe to which it was connected he poured oil into the sea.
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“The truth of the matter for both Europe and the United States is that we need to move away quickly from fossil fuels and gas prices; . Miyoko Sakashita, director of oceans at the Center for Biological Diversity.
You will probably see the rejection of a coalition of 21 lawmakers, including Republicans and some Democrats, who sent a letter to Governor Newsom urging his administration to expand oil and gas production.
In one statement published online, WSPA President Catherine Reheis-Boyd acknowledged the plight of Ukrainians before claiming that “energy leadership and independence” in California would improve domestic and global security.
But instead of serving as a reason to expand oil production, Brownstein says the crisis should speed up the transition to clean energy sources.
“This is the fifth global oil price shock I’ve seen in my life linked to world events, so how often do you have to experience this before you decide to do something different?”
Ukraine-Russia war may undermine California’s climate change legislation Source link Ukraine-Russia war may undermine California’s climate change legislation
