Oil companies split on bid to suspend global warming law


Is Big Oil really backing Proposition 23?

Maybe not. Among California’s major oil refiners, Shell Oil opposes the November ballot initiative to suspend the state’s global warming law. Chevron Corp. is officially neutral. ExxonMobil and BP have decided not to get involved. ConocoPhillips has yet to contribute.

On Tuesday, Charles Drevna, president of the National Petrochemical and Refiners Assn., issued an urgent appeal for funds to back the measure. “I am pleading with each of you — for our nation’s best interest and for your company’s own self-interest,” he wrote in a confidential e-mail to the industry group’s 416 members.

“The money raised so far,” he wrote, “is not enough to win the fight against environmental zealots led by Gov. Arnold Schwarzenegger, who seems hell-bent on becoming the real-life Terminator of our industry.”

Three independent refiners — Valero Energy Corp., Tesoro Corp. and Koch Industries — have contributed most of the $8.2 million behind the measure. Backers would need to raise far more to make a dent in the state’s expensive and saturated media markets in the seven weeks remaining before the election.

The state’s top business groups are also divided. The California Manufacturers and Technology Assn. supports Proposition 23, but the state Chamber of Commerce decided to remain neutral. Silicon Valley, which is heavily invested in alternative energy technology, strongly opposes the initiative.

So far, opponents have raised $6.1 million, with the largest contribution, $2.5 million, coming from San Francisco hedge fund manager Thomas F. Steyer.

The initiative would suspend the 2006 law until the state’s unemployment rate, now over 12%, dropped to 5.5% for a year, which it has done only three times in the last four decades. The law, known as the Global Warming Solutions Act, or AB 32, aims to slash carbon dioxide and other planet-heating pollutants from industry and transportation to 1990 levels by the end of the decade, a drop of about 15% below today’s emissions.

In his e-mail, Drevna said the initiative could “mean the difference between life and death for our industry in this century.... AB32 would give the California Air Resources Board (CARB) powers any dictator would envy.... For all practical purposes, AB32 would have the effect of outlawing petroleum-based fuels in California in the second half of this century.”

Laura Dixon, a Schwarzenegger spokeswoman, called the letter “a sad and pathetic attempt by Big Oil to keep California in the dark ages of energy efficiency and clean air.”

Divisions among oil companies may reflect the fact that firms such as Chevron, which have upgraded their facilities, may have to spend less than their competitors to comply with future rules to cap refinery emissions.

Companies may have decided they have more to gain by lobbying state officials who are developing greenhouse gas regulations.

“At this time we are working closely with the California Air Resources Board to develop a reasonable program that … allows for California’s economy to grow and remain competitive,” a statement from Chevron said.

BP, which operates the state’s largest refinery, in Carson, said it has not taken a position on the initiative. “We are focusing our resources on advocating for a well-designed AB 32 program that delivers on the emission reductions goal in a way that minimizes impacts on California consumers and businesses,” spokesman Steve Rinehart said.