Proposition Outcome to Shape State’s Future Energy Usage

A ballot measure to fund alternative energy development through a tax on oil companies has stoked a heated debate on California’s energy future.

Supporters of Proposition 87 say it would help the state achieve independence from foreign oil and lead the nation in preventing global warming.

Opponents counter that the tax on oil producers would lead to more oil being imported from outside the state, driving up prices and hurting the economy.

The two sides’ combined war chests total $121 million, making the initiative the costliest in California history.

The measure would provide $4 billion in incentives for the use and research of alternative energy in addition to job training programs at state colleges. Proposition 87 aims to reduce oil consumption by 25 percent relative to 2005 levels by 2017.

If passed, the initiative could provide Berkeley and Alameda county funds to continue adding biofuel vehicles to city and bus fleets, said Neal De Snoo, energy officer at the city’s Office of Energy and Sustainable Development.

A provision in the initiative prohibits oil companies from passing the tax’s cost on to consumers, which will be enforced by the State Board of Equalization.

Proponents, including the Sierra Club, the American Lung Association and the League of Conservation Voters, say the creation of clean energy production in the state will create a more self-sufficient California, less vulnerable to oil price changes.

But opponents at the California Taxpayers’ Association, the California Chamber of Commerce and other business and consumer groups argue the tax would drive oil firms to import from outside the state to avoid the tax—thereby increasing oil prices.

“As prices get higher and higher, it affects everyone—businesses large and small—and that gets passed along to the consumer,” said Daniel Cunningham, president of the California Small Business Alliance.

Proponents say action must be taken immediately to fight climate change, prevent fossil fuel pollution and reduce related human illnesses, such as asthma.

“We're not just talking about air pollution, we're talking about lives,” said Rico Mastrodonato, the Northern California director of the California League of Conservation Voters.

Texas and Alaska, the only two states with greater oil production than California, already levy similar taxes, according to the nonpartisan Legislative Analyst’s Office.

Opponents counter that with current taxes, California already ranks fifth among the top ten oil-producing states in total oil taxes, according to a campaign commissioned report.

The $47 million funding for the Yes on 87 campaign comes mainly from individuals, including more than $40 million in donations from film producer Stephen Bing.

Prominent proponents of the bill include former vice president Al Gore, who spoke at a Yes on 87 rally in Berkeley last Monday, and former president Bill Clinton, who will be in San Francisco to speak tomorrow.

The No on 87 campaign’s $75 million funding is largely from oil companies, with Chevron and Aerea Energy, a Shell Oil and ExxonMobil partnership, giving more than $60 million.

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