Climate change road trip for Jerry Brown and Ed Lee
Editorial, The San Francisco Chronicle, July 21, 2015 5:16pm
California is taking its climate change ambitions on a pilgrimage to Rome. The mission amplifies the major steps that have put this state out front in reshaping energy use and also taps into a sweeping papal message on reining in environmental damage.
Leading the tour is Gov. Jerry Brown, joined by San Francisco Mayor Ed Lee among some 60 global mayors. The Vatican gathering, which will also touch on human trafficking, intends to build on Pope Francis’ encyclical denouncing the toll from climate change and puts pressure on world leaders to take action at a U.N. summit in Paris in December.
Former Jesuit seminarian Brown put himself in tune with Francis by talking up the “moral dimension” of human-caused problems such as erratic weather, rising seas and dirty air. But he also struck a more earthly note, lashing out at “troglodyte” skeptics who deny the science behind rising temperatures and shifting climates.
California is already a leader in reducing tailpipe emissions, cutting fossil fuel use and increasing energy efficiency, going well beyond national standards. In the next 15 years, Brown wants to kick up the pace: Half of California’s electricity will come from renewables such as solar, wind or biofuels, and gas pump use will drop by half as well.
He told his audience of clerics and politicians that such goals sound “unimaginable” but are needed. Brown lashed out at “fierce opposition and blind inertia” from doubtful lawmakers and dug-in business interests. Brown himself is no stranger to these pressures, giving his blessing to fracking for oil and gas, widely opposed by environmentalists. In his encyclical, Francis also criticized cap-and-trade regulations as too lax, though the carbon-tax mechanism is a bedrock feature of the governor’s energy plans.
The gathering is also chance for other leaders to showcase policies. Lee unwrapped a plan to phase out petroleum in favor of renewable diesel fuels for the municipal fleet by the end of the year. It’s a another step in clearing the air of damaging greenhouse gases that contribute to climate change.
Why U.S. oil companies clash with EU peers on global warming
By David R. Baker, Sunday, June 7, 2015 11:37 am
John Watson, CEO of the Chevron Corporation, speaks during an energy summit in Washington, D.C., in 2011. Photo: Saul Loeb, AFP/Getty Images
The fight against climate change has opened a trans-Atlantic rift in an industry often seen as a monolith — Big Oil.
Unwilling to sit on the sidelines of climate negotiations, Europe’s largest oil companies last month issued a joint statement calling for a worldwide price on the greenhouse gas emissions that come from burning their products. Such a price, they said, would help the global economy transition to cleaner sources of energy.
The CEOs of BP, Eni, Royal Dutch Shell, Statoil and Total all signed the statement.
None of their American counterparts did.
Chevron Corp. CEO John Watson argued that his European colleagues are pushing a policy that consumers would never embrace. Focus instead on developing nuclear plants and natural gas reserves to fight global warming, he said.
“It’s not a policy that is going to be effective, because customers want affordable energy,” Watson said last week, at an OPEC seminar in Vienna. “They want low energy prices, not high energy prices.”
The split, analysts say, reflects the stark divide between climate politics in Europe and the United States.
Europe already has a cap-and-trade system for setting a price on greenhouse gas emissions. Public debate over global warming revolves around how best to fight it, not whether it exists.
In the United States, many conservatives still insist that warming is either a natural phenomenon or an outright hoax perpetrated by scientists, environmentalists and their political allies. Pricing carbon is a nonstarter for most Republicans in Washington, who are trying to block President Obama’s climate regulations. An effort to create a nationwide cap-and-trade system died in 2010, in part due to opposition from oil- and coal-producing states.
“The domestic politics for the U.S. companies is different from what it is for the Europeans,” said Raymond Kopp, a senior fellow with the Resources for the Future think tank. “Right now, this is a difficult conversation for them to have domestically.”
And that’s assuming they want to have it all.
Exxon CEO Rex Tillerson has expressed support for a tax on greenhouse gas emissions but hasn’t pushed for it. The company formerly supported groups that questioned the scientific consensus on warming. Billionaires Charles and David Koch, whose wealth comes largely from oil and gas, have poured money into the campaigns of political candidates who oppose action on climate change. The Koch brothers have announced plans to spend $889 million during the 2016 election cycle.
California policies
And while Chevron’s home base lies in the only U.S. state with a full-scale cap-and-trade program — California — the company has often criticized the state’s climate-change policies, warning they could push energy prices higher.
Last month’s statement from the European oil CEOs, in contrast, brands climate change “a critical challenge for our world” that must be tackled immediately. The executives urge governments that haven’t already done so to start putting a price on carbon.
The statement, issued as an open letter to two top international climate negotiators, is notably silent on whether the companies prefer a tax on greenhouse gas emissions or a cap-and-trade system. Such systems — including California’s, which began in 2012 — force businesses to buy credits for each ton of carbon dioxide they emit.
The CEOs make clear, however, that they eventually want a worldwide price.
“Pricing carbon obviously adds a cost to our production and our products,” they write. “But carbon pricing policy frameworks will contribute to provide our businesses and their many stakeholders with a clear roadmap for future investment, a level playing field for all energy sources across geographies and a clear role in securing a more sustainable future.”
Natural gas strategy
The CEOs also hint at how their companies could thrive in such a future, by producing more natural gas and investing in renewable technology. Indeed, the companies already have extensive natural gas holdings, analysts noted.
“If you’re on the board of directors of an oil company, you have to be asking yourself, ‘What’s our future in a low-carbon world?’ And with this letter, I think you see these companies trying to figure it out,” said Ralph Cavanagh, energy program co-director for the Natural Resources Defense Council environmental group.
Chevron and Exxon have also invested heavily in natural gas, which when burned in power plants produces roughly half the greenhouse gas emissions of coal. Regulations limiting emissions, including the Obama administration’s effort to cut emissions from power plants, could help them.
“I can’t imagine that Exxon or Chevron, which are companies that would benefit from a shift to natural gas, would be privately opposed to the Clean Power Plan,” said Amy Myers Jaffe, director of the energy and sustainability program at UC Davis.
By David R. Baker, 4 May 2015, 7:23 pm
The ExxonMobil refinery is seen after an explosion in a gasoline processing unit at the facility, in Torrance, Calif., on Wednesday, Feb. 18, 2015. Two workers suffered minor injuries and a small fire at the unit was quickly put out. The incident triggered a safety flare to burn off flammable substances. The facility about 20 miles south of downtown Los Angeles covers 750 acres, employs over a thousand people, and processes an average of 155,000 barrels of crude oil per day, according to the company. (AP Photo/Nick Ut) Photo: Nick Ut, Associated Press
California’s gasoline prices jumped 31 cents in the last week, pushed higher by rising crude oil costs and problems at several state refineries.
It’s the second time this year that California drivers have faced such a steep price spike. And it has some oil company critics livid at a state gasoline market they say is designed to fail.
“This is a problem that only benefits them, to the expense of California consumers,” said Tom Steyer, the billionaire environmental activist who has pushed to raise the oil industry’s taxes in the state. “When you look at an oligopoly, is there anyone there with an incentive to solve this problem? I would say no.”
The average cost of a gallon of regular in California hit $ 3.71 on Monday, according to GasBuddy.com. Less than a month ago, in mid- April, regular was selling for less than $ 3.10.
And while gas prices have been moving higher nationwide, California has by far the nation’s priciest fuel. Even Hawaii currently pays less, with an average of $ 3.20. The national average stands at $ 2.63, according to GasBuddy.com.
Part of the problem lies in crude oil prices, which have risen 34 percent since mid-March. But California’s sudden price surge also reflects unique aspects of the state’s gasoline market that have frustrated drivers for more than a decade.
California uses its own pollution-fighting fuel blends not found in other states. As a result, most of California’s gasoline is made by 14 refineries located within the state’s borders. The state also has some of the country’s highest gasoline taxes — almost 66 cents per gallon. And starting in January, California’s cap-and-trade system for reining in greenhouse gas emissions added 10 cents to the overall cost, according to estimates.
Since only a limited number of refineries make California grade gasoline, any hiccup in production can move prices. In February, Tesoro temporarily shut down its Martinez refinery in response to a labor strike, and an explosion hobbled Exxon Mobil’s refinery in Torrance ( Los Angeles County). Prices soared for four weeks.
Analysts blame the current spike on production glitches at the Tesoro refinery in Martinez and the Chevron refinery in Richmond, which suffered a flaring incident on April 21.
In addition, the Oil Price Information Service reported last week that Chevron took down a key unit at its El Segundo ( Los Angeles County) refinery for maintenance, prompting the company to buy up extra gasoline supplies on the wholesale “spot” market to fulfill its contracts to fuel distributors. A Chevron spokesman declined to comment on the El Segundo refinery.
The price spike may be easing, with the statewide average rising just 1 cent overnight from Sunday to Monday. Wholesale prices are already started to fall.
Consumer advocates have long argued that the oil companies benefit from keeping gasoline supplies tight in California, with too little fuel held in storage for when the next refinery breakdown strikes.
A new report from the nonprofit group Consumer Watchdog argues that refinery profit margins in the state rise during price spikes — even when a company has to buy extra wholesale gasoline to make up for refinery downtime. Soaring retail prices more than make up for the added expense of buying extra supplies, said Jamie Court, the group’s president.
“The oil companies know that even if it’s their refinery that’s knocked out, the higher prices will more than compensate them,” he said.
Court wants the state to require oil companies to maintain a specific amount of fuel in storage, to prevent or at least lessen future price spikes.
The U. S. Department of Energy is studying the idea of a fuel “reserve” on the West Coast — similar to the nation’s Strategic Petroleum Reserve — but has framed it as a way to prevent supply disruptions after natural disasters, such as earthquakes or tsunamis. Tupper Hull, spokesman for the Western States Petroleum Association, said California officials have considered the idea before — and rejected it as unworkable.
“Intuitively, setting aside large volumes of fuel from the market is not going to help,” Hull said.
California governor orders aggressive greenhouse gas cuts by 2030
By Rory Carroll, Apr 29, 2015 11:28pm IST
California Governor Jerry Brown looks on during a news conference at the State Capitol in Sacramento, California March 19, 2015. REUTERS/Max Whittaker
(Reuters) – California Governor Jerry Brown issued an executive order on Wednesday to cut greenhouse gas emissions 40 percent by 2030, a move he said was necessary to combat the growing threat of climate change.
The targeted reduction was tied to 1990 levels and is “the most aggressive benchmark enacted by any government in North America to reduce dangerous carbon emissions,” Brown said in a statement.
California operates the nation’s largest carbon cap and trade system. The state sets an overall limit on carbon emissions and allows businesses to hand in tradeable permits to meet their obligations.
Achieving the new target will require reductions from sectors including industry, agriculture, energy and state and local governments, Brown said.
“I’ve set a very high bar, but it’s a bar we must meet,” Brown told a carbon market conference in downtown Los Angeles on Wednesday.
Brown said the new target will position California as a leader in combating climate change in the United States and internationally.
Brown said he has spoken to leaders in Oregon, Washington and Northeastern states about collaborating with California to cut their output of heat-trapping greenhouse gases. Those states could potentially link to California’s carbon market in future years.
He said he has had similar discussions with leaders in the Canadian provinces of Quebec, British Columbia and Ontario, as well as in Germany, China and Mexico.
Quebec is already linked to the California market. Leaders in Ontario this month signaled their intention to join the program.
“This will be a local policy but it will be globally focused,” Brown told reporters on the sidelines of the conference.
United Nations Secretary-General Ban Ki-moon welcomed the news and encouraged other states and cities around the world to also take action, U.N. spokesman Farhan Haq said.
“California’s bold commitment to tackling climate change is a strong example to states and regions all over the world that they can join their national governments in taking ownership of this critical issue and in showing leadership,” Haq said.
The plan for how California will achieve the 2030 target will be hammered out over the next year by the California Air Resources Board (ARB), which oversees the cap-and-trade program.
“With this bold action by the governor, California extends its leadership role and joins the community of states and nations that are committed to slash carbon pollution through 2030 and beyond,” said Mary Nichols, chair of the ARB.
(Reporting by Rory Carroll in Los Angeles and Laila Kearney in New York; Editing by Susan Heavey and David Gregorio)
