There is an issue that could bring California Republicans back in 2014 and it is called energy, specifically the extraction of oil and gas from the Monterey Shale that runs from Orange to Santa Barbara Counties, along the coast and includes Kern County and much of the Central Valley. No one knows how much oil is there but it could be in the billions of barrels. That could fuel the economic boom Californians are waiting for.
Except for one thing, the political elite that now controls California is dead set against more oil and gas extraction because that undercuts their green energy ethos. That’s why Sacramento Democrats are moving bills to halt hydraulic fracturing, the process known as fracking, which involves pumping chemicals and water deep underground to extract oil and gas. Fracking has been in use for 60 years, mostly in uninhabited area, with no environmental damage, but it makes oil drilling too easy for the anti-oil crowd.
States like Texas and North Dakota are experiencing an oil and gas boom using these modern extraction methods. Interestingly this boom has occurred during the Obama Administration, which has been careful not to oppose fracking or other new extraction methods that promise America will soon be energy independent. Global warming has receded as an issue as America shifted from coal fire power plants to natural gas plants; we’ve seen both an increase in domestic energy production and a decrease in greenhouse gas emissions.
The new energy boom is creating jobs and lowering energy costs everywhere it seems, but California. Since the Schwarzenegger Administration, California policy makers have put all their eggs into the green energy basket. We enacted a Rube Goldberg contraption called cap and trade to fight global warming but, alas, while it is great for bureaucrats it has shown few positive results. Green jobs, touted by Gov. Jerry Brown? Well, they really don’t exist. According to the Bureau of Labor Statistics, green jobs account for only 2.5 percent of the state’s labor force, and they are not growing.
What about pouring more money into green energy investments, a favorite counter to more oil and gas production? In 2007, CALPERS invested $460 million in a fund devoted to clean energy technology that now has an annualized rate of return of minus 9.7 percent. “We have almost $900 million in investment expressly aimed at clean tech. Our experience is this has been a noble way to lose money. And we’re not here to lose money,” says Joseph A. Dear. He should know; he’s the chief investment officer for CALPERS.
Legislative policy makers, dominated largely by coastal liberals, have no interest in curbing their devotion to all things green, and absolutely no interest in using California’s potential oil and gas boom as a job creator. In fact, their latest cause is an oil severance tax, and old idea that was turned down by the voters in 2006.
But Californians, especially working Californians, see the relationship between energy and job development. The California Business Roundtable in conjunction with Pepperdine University released a poll May 1 that showed by a 51 to 28 percent margin, Californians would be willing to ease environmental regulations to allow for more oil and gas extraction and refining if it reduced the price of gasoline and increased the number of jobs. Interestingly, 54 percent of Latinos support this. The survey also showed that by 46 to 30 percent, Californians favor tapping into the oil reserves in the Monterey Shale, again with Latinos who see the job implications strongly in favor.
Interestingly, support for the oil severance tax was not particularly high. The poll showed only 48 percent leaning or voting yes on the tax while the rest were undecided or voting no. The last time this tax was on the ballot it lost by 45 to 55 percent
But by a 49 to 29 percent Californians do want to gain more revenue from oil exploration especially if the money is spent on education, safety and social service programs. That may be the biggest argument for exploring the Monterey Shale, more oil extraction in California can lead to more state revenues.
Republicans failed with their blindly anti-tax arguments in 2012, as they did when some of their candidates immigrant bashed in 2010. Maybe for a change they should stop being on the wrong side of so many California issues and get where the people are.
Republicans should champion Monterey Shale exploration with modern methods, including fracking. While the state does not need an oil severance tax, perhaps some sort of fracking fee would put more money into the state treasury while enhancing jobs growth, economic expansion and lower gasoline prices.
Several states with Republican governors and legislatures are taking advantage of the oil and gas boom and seeing new revenues flow into their state coffers. California Republicans should see how they are doing this and make that their state policy.
If Republicans are serious about competing in California in 2014, championing state energy independence, the economic boom that Monterey Shale oil promises, and the increased revenues it can produce is a road back to relevancy. Let’s see if they are smart enough to take it.