A better idea for big oil
Hello from Virgin America flight 23, winging its way from New York City back to San Francisco! I’m happy to be leaving the arctic cold of the East Coast and also to get back home in time for tonight’s Citizen’s Climate Lobby panel on “Pricing Carbon: Can Conservatives and Progressives Agree?” Stop by, and say hello if you’re in downtown SF.
While we’re debating whether the folks in Washington can agree on a carbon price, our friends in Sacramento are actually getting things done. Last week the legislature introduced a whole slew of climate bills to extend the cap and trade program beyond 2020, invest in renewable and efficient energy, and cut gasoline use in half. Here’s a roundup (though there’s an even better one here):
- SB 350 (President Pro Tem Kevin de León, D-Los Angeles, and Sen. Mark Leno, D-San Francisco): This is the so-called 50/50/50 bill, because it requires a 50 percent renewable energy standard, 50 percent increase in energy efficiency in new and existing buildings, and a 50 percent cut in petroleum use in cars and trucks – all by 2030.
- SB 185 (de Leon again) mandates CalPERS and CalSTRS, the state’s largest pension funds, to divest from companies with 50 percent or more of their revenues in coal mining or coal burning.
- SB 32 (Sen. Fran Pavley, D-Agoura Hills): This bill would extend AB32 (hmm, what a coincidence that the bill numbers match!), California's landmark climate law, beyond 2020 all the way to 2050, which was former Gov. Arnold Schwarzenegger's original stated intent.
- SB 189 (Sen. Ben Hueso, D-San Diego) establishes a seven-member expert committee, “solely of persons with expertise in economic, financial, and policy aspects of clean energy economic growth and job creation,” to advise the Legislature on policies that both advance the clean energy transition and create jobs for Californians.
As readers surely know by now, I’m a fan of all these measures but particularly the 50 percent off petroleum piece of SB 350. The constant fluctuation of gas prices, the up-and-down economy of those California counties dependent on oil production for their tax and employment base, and the near-weekly explosions on rail cars and at refineries (including this week’s terrible fire at the Exxon refinery in Torrance, CA) – all underscore the inherent volatility of oil.
Shockingly, the oil industry doesn’t agree with me on this one. A coalition of oil companies have labeled the 50 percent reduction goal as a “radical” attack on their industry and stand ready to fight it tooth and nail. I have a better idea: maybe those same well-financed companies should invest in some renewable energy and electric vehicle shares to hedge their bets as we move toward a more advanced energy future. After all, they’re victims of oil price volatility as well. CNN Money reports that Haliburton is cutting 1000 jobs this week, BP is laying off workers as part of a $1 billion restructuring plan, and Conoco Philips is cutting spending in 2015 in a move its CEO claims is “prudent given the current environment.” These are real workers losing real, but ultimately unstable, jobs. I’m sure they’d welcome some diversification in their industry.
Meanwhile, a plug for those companies that actually ARE investing in renewable energy, not only because it’s clean but because it’s cheap:
- Apple just spent $850 million to build a new 1300-acre solar power plant in Monterey, CA that will power its California facilities.
- Google, not to be outdone, signed a long-term power purchase agreement with NextEra Energy Resources to buy wind power from the Altamont Pass for its North Bayshore campus in Mountain View. (Note that Google has invested $1.5 billion in clean energy projects overall, including some very cool transmission lines for offshore wind.)
- Kaiser Permanente is also buying Altamont wind, as well as power from a Southern California solar plant and more than 100 smaller rooftop solar arrays to be installed at Kaiser’s hospitals, parking garages, and medical offices. All this will reduce Kaiser’s carbon emissions by 30 percent – and, incidentally, make these hospitals far less sensitive to electricity disruptions and other risks from long-term climate change.
Speaking of climate risks, stay tuned for the next Risky Business Project report, focused on our own state of California, and due out in late March! One thing we’ll look at is the relationship between climate change and drought, which continues to be a major issue in our state (and shows no signs of improvement). A recent NASA study found that if we stay on our current emissions path, we’ll see an increased risk of decades-long “megadroughts” in the United States. These could last 30-35 years, which is longer than any drought seen in the past 1000 years (typically droughts last around 10 years). Using data from 17 climate models, scientists projected that the risk of megadrought is most severe in the Southwest, including California, and the Central Plains.
As usual, it’s all about oil and water out here in the West. There’s more to say on both subjects, but my computer is about to run out of juice and my charger is in the overhead bin 10 rows behind me. Ah, modern travel. Stay cool if you’re in CA and warm if you’re on the East Coast, and I’ll see you in a couple weeks.