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Oil, NatGas Supports California Cap-Trade Extension; Enviros Balk

While political leaders are hailing it as a bipartisan accomplishment, environmental groups are critical of California's recent extension to 2030 of the state's precedent-setting cap-and-trade program, which the oil/natural gas industry has supported.

Since Gov. Jerry Brown signed AB 398 into law last month, oil and natural gas industry representatives have backed the measure, but that has emboldened some environmental groups, who contend the industry got too much in the bargaining process.

While groups like Climate Hawks Vote are skeptical about the industry's influence in the drafting of AB 398, Western States Petroleum Association (WSPA) representatives and industry executives have praised the measure, which they hope will be a cost-effective means of addressing climate change without shutting down the fossil fuel sector.

"The bipartisan cap-and trade package passed is the best, most balanced way for California to comply with state law requiring reduction of greenhouse gas (GHG) emissions, " said Catherine Reheis-Boyd, WSPA president. R. L. Miller, president of Climate Hawks has called cap-and-trade legislation "a WSPA wish list."

California Resources Corp. CEO Todd Stevens, CEO recently praised the state's cap-and-trade as providing a needed "market-based solution that is much more predictable and stable than other alternatives."

Cap-and-trade was not the only proposed mechanism that could have been imposed to ensure California's compliance with the law, Reheis-Boyd said. "Much more expensive 'command and control' programs were also on the table, and these draconian programs would have forced businesses to make drastic changes, imposing strict regulations without any flexibility in implementation," she said. 

According to WSPA's analysis, alternatives would have meant "skyrocketing prices for consumers, a stifled economy, and California jobs lost."

Originally established to run through 2020 in California's landmark 2006 Global Warming Solutions Act, cap-and-trade is now set to run until 2030, aiming to continue decreasing carbon emissions, cutting the use of out-of-state carbon offsets, and keeping the California Air Resources Board (CARB) as the lead state agency in administering the program and allocating its proceeds.

On Tuesday another quarterly cap-and-trade auction was held by CARB, the results of which will be made public Aug. 22. Earlier this year some $9.5 million of cap-and-trade proceeds supported 10 zero-emission electric buses and supportive infrastructure in Porterville, CA. Funding came from cap-trade support California Climate Investments.

A CARB-sponsored report in June found that fighting climate change can be good for economic growth. "The data shows once again that California's groundbreaking greenhouse gas emission-reduction programs are working as designed," said Mary Nichols, CARB chairman.

In signing the cap-trade extension, Brown referred to California as a "nation-state" that is having an impact beyond its borders related stopping climate change, "turning around a carbonized world into a decarbonized, sustainable future."

Miller countered Brown by contending that more than 65 environmental justice, climate, and progressive groups strongly opposed the cap-trade extension legislation. He criticized the governor for labeling opposition to AB 398 as "political terrorism."

"We are people who agree with him that climate change, caused by oil companies and other fossil fuel interests, is an existential threat to organized human existence," Miller said. 

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