Category Archives: California oil industry

Big Oil, California oil industry, Carbon emissions, Climate Change, Western States Petroleum Association (WSPA)

‘We Can’t Improve What We Don’t Measure’ – Oil giants like Valero are spending big to avoid sharing crucial climate data

[Note from BenIndy Contributor Nathalie Christian: This post shares how Big Oil (and gas) lobbyists are using a frighteningly successful two-pronged strategy to stall climate progress here in California: (1) ‘Delay is the new denial,’ and I’d include both the oil industry’s hyper-focus on carbon offsets as panacea and widespread corporate greenwashing as two major delaying tactics, and (2) ‘We can’t improve what we don’t measure.’ With luck and careful implementation, these proposed bills could poke a few holes in the lobby-dam that is blocking essential climate progress. If you can, take a few minutes to write in to your representatives to express support for SB 253 and AB 1305. To find your CA reps, click here; most reps have contact forms on their sites that can help you connect. I’ll keep an eye open for any petitions or upcoming actions in support of those two bills and share them out as I can.]

Oil and Gas Lobbying Threatens California’s Game-Changing Climate Bills

Valero’s Benicia Refinery. Valero is one of several Western States Petroleum Association members fighting new legislation pushing for increased transparency in emissions and offsets. | Image uncredited.

New legislation aims to shine a light on corporate climate pollution and carbon offsets, but Big Oil giants like Valero say it will ‘disfavor the oil industry.’ 

Capital & Main, by Aaron Cantú, June 26, 2023

Two transparency bills in the California Legislature would require corporations to disclose more information about their emissions and their efforts to fight the climate crisis. The oil and gas industry is spending millions to kill them.

The bills would force big companies that do business in California to report all of their emissions and require firms that buy or sell carbon offsets — which are credits that represent a reduction in greenhouse gas emissions — to disclose more information in an effort to crack down on bogus climate claims. Both SB 253 and AB 1305 have momentum but could be blocked by moderate Democrats historically aligned with corporate interests.

Since the legislation would make new information available beyond California, the two bills could represent a watershed moment for holding big polluters accountable when they claim climate bonafides, supporters say.

Reporting requirements for corporate emissions are currently fragmented, and SB 253 would be a landmark law pinning down the climate impacts of some of the world’s largest companies. And as more companies market themselves as partners in the climate fight, greater oversight over voluntary carbon trading markets could help verify their claims. Challenges range from a lack of information on who is buying and selling credits to credits handed out for emissions reductions that never actually happened. AB 1305 requires this information to be reported publicly.

The bills are opposed by the Western States Petroleum Association, which has already spent $2.38 million on lobbying and advocacy groups this year. While some oil and gas companies in California have expressed their support for rolling back climate change, industry opposition fits into an agenda of delaying action, said Ryan Schleeter, communications director at the Climate Center.

“Delay is the new denial,” said Schleeter. “Climate denial won’t fly in this state, and companies are smart enough to figure that out, so they delay as long as possible and squeeze out as much profit as they can.” [Emph. added.]

“We Can’t Improve What We Don’t Measure”

Lawmakers are evaluating the bills as the climate crisis intensifies around the world. Halfway into 2023, smoke from extreme wildfires blanketed Canada and the U.S. Record-breaking temperatures have struck Texas, Mexico, Ireland, Britain, Puerto Rico, Europe, Northern Africa and Asia.

In California, WSPA insists that it wants to be part of the “climate conversation,” according to Kevin Slagle, the association’s vice president of strategic communications.

WSPA’s opposition to the transparency bills “is based not so much on not wanting to progress, as it is how we get to those places,” he continued, noting areas where the oil and gas industry is promoting solutions like hydrogen and biofuels. “Is it that we are often pushing too far, too fast?”

But industry warnings about pace and ambition contrast with the U.N.’s insistence that deep, rapid and sustained reductions are needed now. And the bills are in line with recommendations from a group of experts convened by the United Nations, which concluded that companies should annually report their emissions and reliance on carbon offsets as early steps to eventually ending fossil fuel production.

When pressed on the matter, Slagle deflected, offering his view that the oil and gas industry has been unfairly painted as “evil” due to its frequent opposition to climate accountability measures. In public comments and written testimony, WSPA representatives have said little about why they oppose reporting requirements proposed under SB 253. The California Chamber of Commerce, which has spoken for a broader opposition coalition that includes WSPA and other business associations, cites compliance costs.

Companies that participate in California’s cap and trade system already report emissions information to the state, including Scope 3 emissions, which account for the vast majority. These are from burning oil and gas sold by fossil fuel companies. Scope 1 and 2 refer to emissions from a business’s day-to-day activities and electricity usage.

SB 253, authored by Sen. Scott Wiener (D-San Francisco), expands reporting requirements to all companies generating revenues of more than $1 billion a year. It’s more expansive than a rule currently under consideration by the U.S. Securities and Exchange Commission, and the disclosures have the potential to affect climate action worldwide, said Mary Creasman, CEO of California Environmental Voters.

“This would be pretty monumental,” said Creasman, whose organization is sponsoring the legislation. “There is a movement to say we can’t improve what we don’t measure, full stop.”

Sometimes companies claim to reduce their climate pollution by buying offset credits, which can be used by a company or a country to offset their own emissions.

But offsets have dubious track records across industries and regions. One study into offsets for cooking stoves found that only one in seven represented actual reductions.

Another study found 93% of Chevron’s offsets over the last two years were likely junk. The company, a WSPA member, opposes AB 1305 and spent $1.27 million on lobbying this spring, the most of any oil company. It plans to use offsets while continuing to produce oil and gas.

In a legislative filing, WSPA called the bill’s reporting requirements unclear and redundant, pointing to the SEC’s rulemaking process.

For Assemblymember Jesse Gabriel (D-Woodland Hills), who authored AB 1305, the argument holds little water. Financial filings by one WSPA member company, the refining giant Valero, warned that disclosure rules could “be used to advance agendas that disfavor the fossil fuel industry.” [Emph. added.]

“If these companies want to get the benefit of showing they are on the right side of history, [AB 1305] will encourage them to show that they are purchasing offsets that will actually make a difference,” Gabriel said.

Moderate Democrats Will Decide Bills’ Fate 

A nearly identical version of SB 253 failed last year by one vote in the Assembly. It’s now headed to committees in that chamber that must approve it before a floor vote.

Democrats dominate the chamber, 62 to 18 Republicans. This supermajority means opponents are focusing on swaying moderate Democrats, who are historically more likely to oppose regulations on businesses than progressive lawmakers.

In addition to all Assembly Republicans, one Democrat who is still in the Assembly — Sharon Quirk-Silva (Buena Park) — voted against climate disclosures last year. Fifteen others who registered “no vote recorded” in 2022 will have an opportunity to vote if the bill reaches the floor this year.

Combined, these legislators have received millions from the California Chamber of Commerce, as well as the oil and gas industry and other corporate interests.

“It’ll be a tough bill to pass in the Assembly,” said Creasman. “We’re hopeful this year, because it’s part of a strong package of other corporate leadership and accountability bills.”

Meanwhile, AB 1305 passed by a large majority in the Assembly and is now moving through the Senate. Gabriel is hopeful about its chances.

“I actually think the bills would fit together nicely in terms of creating a regulatory architecture that’s going to really just provide more accountability and transparency,” Gabriel told Capital & Main.

As scrutiny of the fossil fuel industry has grown, companies have cloaked themselves as climate warriors, said Melissa Aronczyk, an associate professor of media studies at Rutgers University who studies the history of the industry’s public relations strategies.

The public has caught on to squishy climate claims in recent years, but oil majors still often announce actions or aspirations that are impossible to measure.

“These are efforts to sidestep real rules, regulation or other frameworks, to actually hold these companies accountable,” Aronczyk said. “The irony is that it is a very simple need that we have, which is to phase out fossil fuels. It’s straightforward.”

Aera Energy, Big Oil, California Governor Gavin Newsom, California Independent Petroleum Association (CIPA), California oil industry, Californians Against Fracking, Common Ground Alliance, ExxonMobil, Fracking, Western States Petroleum Association (WSPA)

Gavin Newsom Hands Out Fracking Permits to Connected Driller

While California was convulsed by COVID-19 and George Floyd’s death, the governor gave Big Oil a big gift.

Capital and Main, by Steve Horn,  June 19, 2020

On June 1, in the midst of the turmoil created by the coronavirus pandemic and the death of George Floyd in Minneapolis, California Gov. Gavin Newsom’s administration quietly issued 12 fracking permits to Aera Energy, a joint venture owned by ExxonMobil and Shell.

Oil drilling in California has faced criticism for its disproportionately negative health impacts on Latino communities and other people of color. The 12 new permits will be for fracking in the Lost Hills Oil Field. The Kern County town of Lost Hills is more than 97 percent Latino, according to 2010 U.S. Census data.

The fracking permits are the latest example of California’s oil industry benefiting from regulatory or deregulatory action during the COVID-19 pandemic and came just months after the Newsom administration said it supported taking actions to “manage the decline of oil production and consumption in the state.” Aera, which also received 24 permits from the California Geologic Energy Management Division (CalGEM) on April 3 during the early days of COVID-19, has well-connected lobbyists in its corner who work for the firm Axiom Advisors.

One of them, Jason Kinney, headed up Newsom’s 2018 transition team and formerly served as a senior advisor to Newsom while he was lieutenant governor. He is also a senior advisor to California’s Senate Democrats. The other, Kevin Schmidt, previously served as policy director for Newsom when the latter was lieutenant governor. Aera paid Axiom $110,000 for its lobbying work in 2019 and, so far in 2020, has paid $30,000, lobbying reports reveal.

Axiom’s lobbying disclosure records show both Kinney and Schmidt listed as lobbyists and Aera as one of the firm’s clients. Kinney’s wife, Mary Gonsalvez Kinney, was also the stylist for Newsom’s wife–Jennifer Siebel Newsom–dating back to their time spent living in the San Francisco Bay Area. Kinney and Schmidt did not respond to repeated requests for comment for this article.

Calling the situation “unseemly,” Jamie Court, president for the Los Angeles-based group Consumer Watchdog, wrote via email that “Aera should not be able to buy the influence it apparently has over state oil and gas policy.” Last November, prior to the 24 permits issued in April, Newsom had declared a statewide fracking permit moratorium in response to a scandal involving a regulator for the California Division of Oil, Gas, and Geothermal Resources (DOGGR). The regulator, who had been tasked with heading oversight issues on issuing permits, was revealed to have stock investments valued up to $100,000 in Aera Energy’s parent company, ExxonMobil. Newsom fired the head of DOGGR at the time, Ken Harris, and eventually renamed the agency CalGEM.

Kinney and Schmidt are not the only two with Newsom ties. Aera CEO Christina Sistrunk sits on the governor’s Task Force on Business and Jobs Recovery, created to craft an economic recovery plan in response to the ongoing COVID-19 economic fallout.

Aera is one of the state’s top drillers and accounts for nearly 25 percent of California’s production, its website claims. Aera landed 490 drilling permits from CalGEM in the first quarter of 2020, according to data collected by FracTracker, and 651 permits in 2019.

Lost Hills

The town of Lost Hills has a population of about 2,500 people and its field ranks sixth in oil produced in the state. The field sits in close proximity to a residential neighborhood just west of Interstate Highway 5, close to both a middle school and public park.

Infrared camera footage from 2014, taken by the advocacy group Earthworks and the Clear Water Fund for a 2015 report they published, showed that the Lost Hills field emits prolific amounts of toxic chemicals into the air, including methane, acetone, dichlorodifluoromethane and acetaldehydes. High levels of isoprene and acetaldehydes can cause cancer, while the other substances can result in serious health damage, including heartbeat irregularities, headaches, nausea, vomiting, throat irritation, coughing and wheezing.

In a survey done for that same report of Lost Hills residents, respondents reported having “thyroid problems (7 percent), diabetes (7 percent), asthma (11 percent) and sinus infections (19 percent).”

“Of all respondents, 92.3 percent reported identifying odors in their homes and community,” it further detailed. “Odors were described as petroleum, burning oil, rotten eggs, chemicals, chlorine or bleach, a sweet smell, sewage, and ammonia. Participants reported that when odors were detected in the air, symptoms included headache (63 percent), nausea/dizziness (37 percent), burning or watery eyes (37 percent), and throat and nose irritation (18.5 percent).”

Methane is a climate change-causing greenhouse gas 84 times more potent than carbon dioxide during its first 20 years in the atmosphere, according to the Intergovernmental Panel on Climate Change. A 20-year window falls within the 2030 deadline established by IPCC climate scientists in a 2018 report that concluded that, if bold action is not taken steadily until then, the world could face some of the most severe and irreversible impacts of climate change.

Setbacks

The new Lost Hills permits came as CalGEM completed its pre-rulemaking public hearings, on June 2, for regulations pertaining to distancing setbacks of oil wells from homes, schools, health clinics and public parks.

The rulemaking process also came as a direct result of the Newsom administration’s November fracking moratorium announcement, found within that same directive.

Last January, two months after the directive, new CalGEM head Uduak-Joe Ntuk, Newsom’s legislative affairs secretary Anthony Williams and Department of Conservation director David Shabazian all attended and spoke at a pro-industry hearing convened by the Kern County Board of Supervisors. They held the hearing in direct response to Newsom’s November announcement. Aera CEO Sistrunk spoke at that hearing and the company promoted it on its website.

The lobbying disclosure records also show Kinney and Schmidt’s firm represents Marathon Petroleum, which advocated against legislation that would mandate CalGEM to implement a setbacks rule by July 1, 2022. That bill, AB 345, had previously mandated that a setback rule be put into place by 2020.

But after receiving lobbying pressure from the Common Ground Alliance— which has united major labor groups with the oil industry, and which was incorporated by an attorney whose clients include Chevron, ExxonMobil, BP America and Western States Petroleum Association—Assembly Appropriations Chairwoman Lorena Gonzalez (D-San Diego) made it a two-year bill during the 2019 legislative session. The “two-year” option for state legislators extends the lifeline of a bill for potential amendments and passage into the second year of every two-year legislative session. Gonzalez told Capital & Main the bill received two-year status due to its high implementation cost.

Aera’s parent company, ExxonMobil, has given Gonzalez $5,500 in campaign contributions since her first run for the Assembly in 2013. Aera also gave a $35,000 contribution to the California Latino Legislative Caucus Foundation during the first quarter of 2020, its lobbying disclosure form shows. Gonzalez is the chairwoman of the California Legislative Latino Caucus and the foundation is its nonprofit wing. And both Aera and the Common Ground Alliance share the same attorney, Steven Lucas, incorporation documents and disclosure forms show.

“The Governor has been clear about the need to strengthen oversight of oil and gas extraction in California and to update regulations to protect public health and safety for communities near oil and gas operations,” Vicky Waters, Newsom’s press secretary, told Capital & Main in an emailed statement. “CalGEM has launched a rulemaking process to develop stronger regulations and will consider the best available science and data to inform new protective requirements.”

Waters did not respond to questions about Axiom Advisors and its personnel ties to Gov. Newsom.

“An Afterthought”

The permits handed to Aera coincide with the Newsom administration granting the industry a suite of regulatory relaxation measures during the COVID-19 era. These include a delay in implementing management plans for idle oil wells and cutting the hiring of 128 analysts, engineers and geologists to bolster the state’s regulatory efforts on oil wells—even though the industry was legally obligated to pay for it.

These measures came after San Francisco public radio station KQED reported that the oil industry’s top trade associations, the Western States Petroleum Association (WSPA) and California Independent Petroleum Association (CIPA), requested that CalGEM take such actions.

Aera’s general counsel, Lynne Carrithers, sits on the board for CIPA, while the company is also a WSPA dues-paying member.

In response to a question about the cancellation of hiring of 128 regulators, Teresa Schilling, a spokeswoman for the Department of Conservation—which oversees CalGEM—said by email that the “Administration had to revisit many proposals in the January budget as a result of the COVID-19 pandemic and the fiscal challenges it created.”

“Significantly expanding a fee-based program in this time of belt-tightening would not be appropriate,” Schilling continued, speaking to the oil industry’s current financial travails. “However, CalGEM is committed to continuing its critical core enforcement and regulatory work with its current resources. Furthermore, all regulations remain in effect and operators are still accountable for meeting them.”

Schilling added that, with regards to the connections with Axiom Advisors, the administration works with “a variety of stakeholders on policy issues and budget decisions,” calling the latest budget proposal “consistent with Administration priorities.”

But Cesar Aguirre, a community organizer with the Central California Environmental Justice Network who lives near Lost Hills in Bakersfield, sees the situation differently.

“The Lost Hills community is already surrounded by extraction and the Newsom administration and CalGEM continue to show that they intend to put the environment and frontline communities as an afterthought,” he said, advocating for the passage of AB 345. “These actions show us that Californians can’t depend on empty political promises to protect public health.”

California Assembly, California Division of Oil Gas and Geothermal Resources (DOGGR), California oil industry, Keeping Watch on Earth News

Grayson is on the fence on AB 1440 – Critical vote could happen today

A critical vote could take place today or early Tuesday.  It would be great if you could make a constituent phone call today.

leginfo.legislature.ca.gov

AB 1440 is proposed legislation that reforms the agency that regulates the oil and gas industry in CA – called the Division of Oil, Gas, and Geothermal Resources (DOGGR.)

The Western States Petroleum Association (WSPA) and associated parties are fighting hard against this bill, which is sorely needed.

The language regulating DOGGR still puts oil and gas interests above human health and community safety.  AB 1440 would change that.

Please call Tim Grayson, as we know WSPA is in his ear today.

Tim Grayson, 14th California Assembly District

Capitol Office
State Capitol
P.O. Box 942849
Sacramento, CA 94249-0014
Tel: (916) 319-2014
Fax: (916) 319-2114

District Office:
420 Virginia Street, Suite 1C
Vallejo, CA 94590
Tel: (707) 642-0314

Thanks!

California oil industry, California Regulation, Greenhouse gas emissions, Oil and gas industry

Oil and gas production in California – Extraordinary?

Repost from Legal Planet

Guest Bloggers Deborah Gordon and Frances Reuland: Is California Extraordinary? Its Oil Resources Certainly Are

Facts About California’s Oil and Greenhouse Gas Emissions

Despite ongoing federal rollbacks to environmental regulations, California has the right to set its own clean air standards because it is truly extraordinary. Truth be told, the compelling circumstances that first set in motion California’s vehicle emissions standards remain entirely valid. And there are four recent conditions, related to California’s oil supply, production, and refining, that bolster California’s case against the Administration’s threat to strip California of its clean car clout.

In 1967, then governor Ronald Reagan adopted statewide vehicle emissions regulations to address California’s severe air pollution. Shortly thereafter, when the federal Clean Air Act was adopted, California was granted a waiver to set its own tougher vehicle emissions standards. Over the decades, California has repeatedly ratcheted up these regulations to also include greenhouse gas (GHG) emissions. In order to maintain its waiver, California’s emissions standards must be deemed necessary to meet “compelling and extraordinary conditions.” Historically, these referred to the state’s unique meteorology, geography, population, and air pollution levels.

All of these still hold true: the sun shines strong, the weather is warm, mountains wall in emissions from cars and other sources, one in eight American drivers reside here, and the air is still very dirty.

But there are four more extraordinary circumstances, all relating to California’s oil resources, that need to be factored into the case for preserving and strengthening California’s clean car program.

These circumstances are bolstered by the fact that California’s gasoline and diesel markets are geographically isolated from other locations in the United States that produce refined products. As such, California is essentially self-sufficient, refining its own transport fuels. Little, if any, gasoline and diesel are obtained from outside the state to balance out supply with demand.

All of the oil California produces ends up in its own refineries, and this is not an environmentally-friendly affair, especially in a state that has taken the lead on clean air and climate change. According to the Oil Climate Index (OCI)—an open source tool (developed by Gordon and her partners at Stanford and the University of Calgary) that compares the climate impacts of global oils—extracting and refining oil in California is dirtier than anywhere else in the United States. Weakening California’s vehicle emissions standards will force Californians to consume more of the state’s dirty oil longer into the future. This will increase pollution levels and elevate risks to public welfare in the state with the nation’s worst air pollution—69 percent of counties had unhealthy air on 33 days last year.

California’s oil resources are extraordinarily strained

As Texas, North Dakota, New Mexico, and overall U.S. oil production rises, California production is in decline. Since 1985, California’s crude oil production has dropped steadily: the state now produces under 500,000 barrels per day, less than half of its output 30 years ago. California’s aging oil fields, unstable seismic geology, and tight environmental rules all work to limit oil production. Successfully running its oil refineries at their current capacity of 2 million barrels a day to meet Californians’ gasoline and diesel demands requires the state to feed the entirety of its domestic oil into its refineries and then import 70 percent more oil. If realized, Trump’s plan to weaken the state’s clean car standards would increase gasoline and diesel demand, exacerbating the state’s already-strained oil resources and further pressuring security of its energy supplies.

California’s oil resources are extraordinarily dirty

California’s oils have some of the largest carbon footprints worldwide. Producing, refining, and consuming a barrel of California oil emits more GHGs than other global barrels. For example, the state’s largest oilfield, Midway Sunset, is estimated to be more carbon intensive than Canada’s oil sands. California’s South Belridge and Wilmington fields are also among the highest-emitting in the nation. Trump’s plan would increase California’s GHG footprint, countering the state’s climate goals.

California’s oils are extraordinarily energy intensive

Aging oils in California require significant amounts of energy to extract and refine, much more than newer resources in North Dakota, the Gulf of Mexico, and elsewhere. Fossil fuels, like natural gas and diesel, provide these extra energy inputs. A barrel of California’s Midway Sunset oil, for example, uses one-third of its total energy just to extract and refine it into petroleum products like gasoline and jet fuel. Likewise, California’s complex refineries consume nearly five times more energy to turn the state’s oil into marketable products than simpler refineries. Much more manpower and money are spent bringing California oil to market than elsewhere in the country.

California’s oils are extraordinarily undocumented

Unlike other states and countries, California does not document its oil quality. The problem is that California’s oil resources are more dangerous to handle than most global oils. In 2011, for example, a California oil field worker was buried alive when the ground gave way as steam was being cycled through the oil field. California’s complex oil was documented long ago by the federal government, but recommendations for oil data transparency have gone unheeded for over a century. These large information gaps introduce new environmental risks for California.

California’s 30 million motor vehicles that far outnumber any other state are a major source of air pollution. Clean car rollbacks are a threat to the state’s environmental progress—and energy security. The state needs to fight hard to preserve its pioneering vehicle emissions standards on behalf of itself and several U.S. states and international provinces that have already adopted them. Beyond preserving the standards in place, state policymakers should also consider tightening their emissions standards if they are going to make real headway addressing climate change. In this historic fight, California can draw on its extraordinary status—namely its exceedingly dirty, depleting oils that are unusually energy intensive and fundamentally unknown.

Deborah Gordon is the director of the Energy and Climate Program at the Carnegie Endowment for International Peace and a senior fellow at the Watson Institute for International & Public Affairs at Brown University. Frances Reuland is Carnegie’s James C. Gaither Junior Fellow in the Energy and Climate Program.