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Fight Over Higher Oil Taxes Heats Up in California

In a recurring tug-of-war that the oil/natural gas industry has been fighting for years, shots were heard in recent days in California's annual battle over whether to increase taxes on oil production.

Tom Steyer, a billionaire hedge fund manager from San Francisco and backer of the Next Generation climate change group, is expected to try to qualify a crude-oil-extraction tax initiative for the 2016 ballot, and the Western States Petroleum Association (WSPA) and other parts of the industry are preparing for a long battle (see Shale Daily, Oct. 22).

Last Tuesday, an oil industry support group, Californians Against Higher Oil Taxes, released its reaction to a new public opinion poll from the independent Public Policy Institute of California (PPIC) showing that less than half of voters in the state survey (45%) support an oil extraction tax.

"This poll demonstrates how Californians understand that paying for higher oil taxes will ultimately come from their own wallets," said the support group's spokesperson, while noting that Steyer nevertheless is committed to pushing for a ballot initiative to try to get the tax.

The PPIC poll was a wide-ranging look at California's post-election political landscape, noting that a majority of the 1,704 adult residents surveyed support more funding for public higher education, but are against any tax increases, including an oil extraction levy.

There were differences throughout the survey between respondents identifying themselves as Democrats or Republicans, and between those likely to vote and those who indicated they might not vote.

"Likely voters are slightly less likely than adults overall to favor increasing taxes on cigarettes and alcohol, but slightly more likely to favor taxing the extraction of oil and natural gas," the PPIC survey noted. It also showed that 58% of Democrats favored more taxes on oil and natural gas, while only 34% of the Republicans feel that way.

"The likelihood that Californians will express support for taxing the extraction of oil and gas increases as education and income levels rise," PPIC said.

On climate change, which has been championed in the state on a bipartisan basis, the PPIC survey found that 76% of those surveyed view global warming as "very serious” (53%) or "somewhat serious" (23%). This result was only slightly lower (67%) among likely voters.

Respondents are less likely to think that California's aggressive efforts to reduce the impacts of climate change will have positive economic effects, such as creating more jobs. "Four in 10 adults (43%) think that California's efforts to reduce global warming will result in more jobs, while 21% say it will result in fewer jobs, and 29% say it will not affect job numbers," PPIC said.

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