NEXTGEN CLIMATE FOUNDER & PRESIDENT TOM STEYER CALLS FOR ANSWERS FROM BIG OIL ON GAS PRICE SPIKE IN CALIFORNIA
Steyer Says If Oil Company Executives Won’t Answer Questions They Should Face Subpoena
May 5, 2015 3:53 PM
SAN FRANCISCO—NextGen Climate Founder and President Tom Steyer today spoke at a Chevron gas station about the recent gas price spike in California and called on the State Senate to subpoena oil company executives if they refuse to provide answers to basic questions about their pricing and oil refining practices.
“As everyone knows, the oil companies have been charging Californians up to $1 billion per month more for gasoline than if we paid the national average,” Steyer said. “It’s time to put an end to the Big Oil giveaway, and start giving Californians a fair shake.”
Steyer also highlighted recent comments made by Chevron during its first quarter earnings call with investors last week. Chevron’s general manager of investor relations, Jeff Gustavson, noted that refining margins “increased earnings by $435 million driven by unplanned industry downtime and tight product supply on the U.S. West Coast.”
As Steyer noted, Chevron is saying for the oil industry, “their problems were good for their profits.” Steyer also highlighted the problem with the lack of transparency into the oil industry’s business practices, saying “we don’t have the facts we need in order to know if we’re paying fair prices based on the market, or if oil companies are deliberately taking actions which lower supplies and drive profits higher.”
Oil company executives had the opportunity to show up for a Senate hearing in March, to answer questions and allow Californians to judge whether they are being unfairly gouged at the pump. But industry executives refused to show up, instead sending a paid economist who then claimed he didn’t speak for the oil companies. If these executives continue refusing to answer for their business practices, the State Senate should subpoena these executives to force them to answer to Californians. Once Big Oil answers this call, we can begin to fix California’s rigged gasoline market and give Californians the fair shake they deserve.
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NextGen Climate is focused on bringing climate change to the forefront of American politics. Founded by Tom Steyer in 2013, NextGen Climate acts politically to prevent climate disaster and promote prosperity for all Americans.
Valero Energy Corp. on Tuesday reported a record high first quarter based on strong performance from its refining segment.
Valero’s net income from continuing operations rose 16 percent, to $964 million, or $1.87 a share, compared to $829 million, or $1.54 a share, for the same period a year ago.
The results handily beat analysts’ estimates that the San Antonio-based refiner would earn $1.72 a share.
“Our team’s solid performance and favorable margins helped us deliver impressive results during a heavy planned-maintenance period in the first quarter,” CEO Joe Gorder said in a statement.
Valero’s refineries processed more crude oil in the quarter, handling 2.7 million barrels a day, an increase of 9,000 barrels a day in the first quarter of 2014.
North America’s Oil And Gas Industry Has Taken Over 7 Million Acres Of Land Since 2000
By Katie Valentine, April 24, 2015 at 12:28 pm
Millions of acres of land across the U.S. and Canada has been taken over by oil and gas development in the last 12 years, according to a new study.
The study, published Friday in Science, tallied up the amount of land that’s been developed to house drilling well pads, roads, and other oil and gas infrastructure in 11 U.S. states and three Canadian provinces. It found that between 2000 and 2012, about 3 million hectares (7.4 million acres) have been turned over to oil and gas development, a stretch of land that, combined, is equal to three Yellowstone National Parks.
This land takeover can have ecological consequences, according to the report.
“Although small in comparison with the total land area of the continent, this important land use is not accounted for and creates additional pressures for conserving rangelands and their ecosystem functions,” the report states. “The distribution of this land area has negative impacts: increasing fragmentation that can sever migratory pathways, alter wildlife behavior and mortality, and increase susceptibility to ecologically disruptive invasive species.”
Most of the land converted into drilling operations was cropland and rangeland — a term that encompasses prairies, grassland, shrubland, and other ecosystem types — and roughly 10 percent was woodland. Wetlands, according to the report, were mostly spared by oil and gas developers, though a very small amount have been converted into oil and gas sites.
CREDIT: Science/AAAS
Land takeover due to oil and gas development can have a number of negative consequences, the report states. It removes vegetation that’s important for food, habitat, and carbon storage, and it also fragments ecosystems in such a way that can disrupt the natural behavior of wildlife.
According to the report, oil and gas development reduced the study area’s net primary production (NPP) — the rate at which an ecosystem produces plant biomass, which the report calls “a fundamental measure of a region’s ability to provide ecosystem services” — by 4.5 teragrams (9,920,801,798 pounds). The amount of vegetation lost from rangelands amounts to about five million animal unit months (the amount of vegetable forage required to feed an animal for one month), which “is more than half of annual available grazing on public lands managed by the U.S. Bureau of Land Management.”
“The loss of NPP is likely long-lasting and potentially permanent, as recovery or reclamation of previously drilled land has not kept pace with accelerated drilling,” the report states.
Steve Running, co-author of the study and ecology professor at the University of Montana, told Midwest Energy News that the upward trend of oil and gas development is concerning in terms of land use, especially if serious efforts to reclaim land aren’t taken.
“The point we’re trying to make with this paper is not so much that some huge fraction of current land area has been de-vegetated, as much as the trajectory of drilling, (consuming) a half-million acres per year,” he said. “If we continue that to 2050, you get to some seriously big amounts of land.”
CREDIT: Science/AAAS
Right now, there’s not much known about to what extent oil and gas areas in the U.S. are being reclaimed after they’ve been developed, said Samuel D. Fuhlendorf, another co-author of the report from Oklahoma State University. And, he said, there isn’t much work at the federal or state level to regulate or enforce this reclamation. Some states — including Pennsylvania, Ohio, North Dakota, and West Virginia — do require oil and gas companies to submit plans for reclaiming land after they’re done drilling. But others, like Colorado, don’t require these plans.
“You’d expect there would be both state- and federal-level policy,” Running told Midwest Energy News. “But we’re not aware of a clear policy on this. We don’t see any active discussion or regulatory planning of how that’s going to be done, who will do it and when it will be done. Beyond policy, is there actual enforcement. We are not aware that any state or federal policies are actively following this.”
By Tom Hayden, April 24, 2015 4:32pm
LOST HILLS, CA – MARCH 24: The sun rises over an oil field over the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is on the verge of a boom on March 24, 2014 near Lost Hills, California. Critics of fracking in California cite concerns over water usage and possible chemical pollution of ground water sources as California farmers are forced to leave unprecedented expanses of fields fallow in one of the worst droughts in California history. Concerns also include the possibility of earthquakes triggered by the fracking process which injects water, sand and various chemicals under high pressure into the ground to break the rock to release oil and gas for extraction though a well. The 800-mile-long San Andreas Fault runs north and south on the western side of the Monterey Formation in the Central Valley and is thought to be the most dangerous fault in the nation. Proponents of the fracking boom saying that the expansion of petroleum extraction is good for the economy and security by developing more domestic energy sources and increasing gas and oil exports. (Photo by David McNew/Getty Images)
Jerry Brown perhaps should put his DOGGR to sleep. Not his family dog, Sutter, but DOGGR — the Division of Oil, Gas and Geothermal Resources — the 100-year-old agency that’s been handing out permits for drilling in the Central Valley without records, oversight or enforcement of 21st century environmental laws.
The agency was created prior to Upton Sinclair’s 1927 novel, “Oil!,” on which Daniel Day-Lewis’ 2007 film, “There Will Be Blood,” was based. Oil was to California what cotton was to Mississippi, a booming industry based on subsistence labor, migration, racism, vigilantism, and government officials looking the other way.
Oil wells in the Midway-Sunset oil field in Fellows (Kern County). Monterey Shale, largely untouched territory near Midway-Sunset, could represent the future of California’s oil industry and a potential arena for conflict between drillers and the state’s powerful environmental interests. Photo: Jim Wilson, New York Times
Times change but slowly. Current Kern County Sheriff Donny Youngblood, who says Kern ought to be a county in Arizona, opposes President Obama’s immigrant-rights policy. There are an estimated 66,000 undocumented immigrants in Kern County, whose population is majority Latino. More than 22 percent of its people live below the poverty line, 69 percent of them within one mile of an oil well.
The barren place is a bit like Mississippi in the ’60s, powerful enough to defy progressive norms or laws on the national level. The federal government in 1982 transferred its power to California to monitor and regulate the 42,000 injection wells that dump toxic waste fluids into groundwater. That monitoring didn’t happen, a lapse that the feds say is shocking. The human carcinogen benzene has been detected in fracking wastewater at levels 700 times over federal safety standards. Health impact studies are inadequate, but Kern community hospital managers say the county has one of the highest cancer rates in the country, which is expected to double in 10 years.
How did it happen that the Obama Environmental Protection Agency is pushing the Jerry Brown EPA to comply with modern environmental law? The same Gov. Jerry Brown signed that 1982 agreement, giving Big Oil an opportunity to oversee itself. Those were the days when President Ronald Reagan’s Anne Gorsuch ran the federal EPA, perhaps convincing California that it could do a better job.
As a result of the 1982 transfer, the feds say California has failed at oversight and record-keeping. With the feds watching, the state has two years to implement a meaningful monitoring plan.
Brown has tried to fix the problem, which undercuts his claim that drilling and controversial fracking can be addressed by beefed up regulations instead of a moratorium on fracking that most environmentalists want. He has added more professional staff to DOGGR and installed a new director, Steve Bohlen, who promises to clean up the place. Since last summer, the agency has shut down 23 injection wells out of 2,500.
The preference of one experienced state official is to peel back DOGGR, move it to Cal EPA and turning it into a real regulatory agency instead of a lapdog for the oil industry. But Brown officials prefer the uphill task of reforming DOGGR from within, and have signaled they will veto any bill that brings the agency under state EPA jurisdiction. The Legislature is going along with his incremental approach, so far.
The task will be daunting. The DOGGR mandate has been to drill, baby, drill, says state Sen. Hannah-Beth Jackson, D-Santa Barbara. DOGGR’s legal mandate calls for “increasing the ultimate recovery of underground hydrocarbons,” not determining whether drilling or fracking are sustainable and safe for aquifers or human health. Her SB545 is still a work in progress, however. It stops the archaic custom of drilling permits being obtained and accepted without any written approvals or findings, which upsets the feds and shuts out the public. Until recently, an oil company simply gave notice of its intent to drill and was entitled to proceed unless the agency said no in writing within 10 days. Under Jackson’s bill, an application to drill will require written approval, and the paperwork will be posted on the DOGGR website. In addition, the bill will limit the Kern custom of keeping records about chemicals and water impacts confidential, even when a well has gone into production.
However, the bill’s language makes oversight optional by saying that DOGGR “may” require an operator to implement a monitoring plan. Decision-making power is devolved to the division district deputy in Kern, which is like expecting a Mississippi sheriff to carry out federal law in 1964 — or the present Kern sheriff to enforce immigration law today. Nor does the bill give the state EPA or health experts any shared authority in the permitting process.
Well derricks crowd the Kern River oil field in Bakersfield in 1912. Photo: Chevron, SFC
At the heart of the scandal is the historic power of Big Oil against the emergence of California’s clean-energy economy with its priorities of renewable resources and efficiency. The Democratic majority in Sacramento is hobbled by a pro-drilling contingent, led by Republicans with a number of Central Valley Democrats. The oil lobby spent $9 million in 2014 in a failed attempt to exempt themselves from the state’s cap-and-trade law. The effort was led by Assemblyman Henry Perea, D-Fresno, along with 16 Democratic legislators. In a more striking example, state Sen. Michael Rubio, D-Bakersfield, left his seat in 2013 to begin lobbying for Chevron, one of the major firms along with Occidental Petroleum operating in Kern’s oil fields. The oil lobby is spending large sums to cultivate friendly Democratic candidates and underwrite advertising campaigns warning of a “hidden gas tax” if their privileges are threatened.
Many Sacramento insiders believe that Brown has made concessions to Big Oil in order to protect his considerable progress toward clean-energy goals while not confronting the industry the way he took on the nuclear lobby in the ’70s. That’s understandable, if it works. Now, however, his regulatory reputation needs rebuilding. What if his DOGGR won’t hunt? What if it’s beyond reform? What will the governor and Legislature do if facing open defiance from the powers that be in Kern on a range of issues from clean air and water to the protection of children’s health to environmental justice? With the drought on everyone’s mind, can he allow the state’s aquifers to be threatened by the carcinogenic wastewater of oil production?
The DOGGR scandal drills deeply into the foundations on which state politics are built.
Tom Hayden writes, speaks and consults on climate politics and serves on the editorial board of the Nation. His latest book is “Listen Yankee!: Why Cuba Matters.” (Seven Stories Press, 2015).
