San Francisco Bay Area hedge fund manager Tom Steyer on Monday launched a statewide campaign, aimed at prompting action by state lawmakers, to impose a new extraction tax on oil produced in California.
Steyer said California imposes only a 14-cent per barrel fee and that, even when property, income and corporate taxes are factored in, the state collects far less per barrel that states such as Texas and Alaska – a claim that oil industry representatives disputed.
The extraction tax could produce billions of dollars in much-needed revenue for the state, Steyer said.
“It’s an obvious thing to do,’’ said Steyer, a billionaire who has been a leading campaigner against the proposed Keystone XL pipeline, designed to carry oil extracted from Canada's tar sands to refineries along the Gulf Coast.
Tupper Hull, spokesman for Western States Petroleum Assn., said an industry-supported analysis done two years ago found that oil companies already pay more than $6 billion a year in taxes to state and local governments. Hull said Steer’s assertion that the industry is under-taxed is “erroneous” and that imposing a new extraction tax would result in a decline in oil production in California and the loss of jobs.
“He supports a lot of policies that, intended or not, will make it harder and more costly to deliver petroleum energy to consumers in California and the rest of the country," Hull said.
Rock Zierman, chief executive of the California Independent Petroleum Assn., said a state oil extraction tax could also siphon away tax revenue that oil companies pay to local governments.
The oil extraction tax proposal is similar to one voters defeated at the ballot box in November 2006.
Proposition 87 would have imposed an extraction tax and used the revenue generated to fund research and development of alternative fuels. The oil industry spent just over $100 million to defeat the ballot measure. Recent legislative efforts to impose an extraction fee also have failed.
Steyer and his political committee, NextGen Climate Action, are launching a statewide media campaign to raise awareness about the issue and, hopefully, prompt the state Legislature into action, he said. The organization also will conduct public opinion research.
Steyer declined to say how much of his own money he expected to spend on the effort.
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