Chevron and Proposition 26

Is Chevron backing a ‘bait-and-switch’ policy with Californians on ballot propositions?  CAP’s Araceli Ruano has the answer.

As readers of this blog know, Tesoro and Valero have been slammed for sticking their nose – and their money – into California’s business.  The two Texas oil companies are responsible for putting Proposition 23 on the ballot.  Prop 23 would suspend California’s Global Warming Solutions Act until an arbitrary and unrelated unemployment number is reached and has spawned a national discussion on climate change.

Some in the environmental community have lauded the oil companies that stayed out of Prop 23 and refrained from giving money to support it.  Shell, for instance, has come out against Prop 23, and Chevron has remained “neutral” on Prop 23 (saying that “We’ll let the voters decide because it’s their call” – of course, right?  But when isn’t a proposition the voters’ call?).  The fact that oil companies stayed out of sabotaging California’s climate change work was impressive and worth noting.  It seemed like a few of them had seen the writing on the wall and decided this would not be their battle.

However, the truth has shown to be much uglier.  It appears that Chevron, Shell and ConocoPhillips were staying out of the 23 battle because they had set their sights on 26 insteadProp 26 raises the voting requirement from a majority to 2/3 for the legislature to authorize a fee.  While this sounds good (voters thinking of car registration fees, or parking fees), really it is simply a way to make it harder to assess fees for pollution.  While minor fees would be harder to assess, the main driver of 26 is the large-scale high-dollar fees for releasing toxic waste, spilling oil or any other social danger.

Prop 26 is dangerous because it shifts the burden to pay for pollution from the offending company to the general public.  So not only is it harder to assess these fees, what happens once these fees are no longer enough to cover the cost of clean-up?  The taxpayer has to pay.  Put simply, Prop 26 forces the tax payer to pay for pollution by making it harder to charge the responsible party.

And the cost of clean up is not small – the non-partisan Legislative Analyst’s Office estimated it at $1 billion a year this decade, growing to multi-billion dollar cost in coming years.

So while Prop 23 started to decline in the polls as Election Day nears, Chevron is privately celebrating that they may still pull a fast one on voters.  While they stayed “neutral” on 23, they poured almost $4 million into Prop 26.  This is the ultimate misdirection and hide-the-ball trick.  California voters appear to have tackled Prop 23, only to see Prop 26 with the ball, running a reverse to the opposite field.

While we have again and again questioned why two Texas oil companies would donate over $8 million to the Yes on 23 side, we also question why Chevron would spend $4 million on 26.  If it is harder to assess fees for pollution, it is going to be much easier for Chevron to duck their responsibility for their mess.  So this might be the best $4 million Chevron ever spent.

The ugliest part of this whole caper is that it comes as Chevron is dumping money into advertising to bolster their image.  They just launched their “We Agree” campaign, aimed at presenting an image of corporate responsibility – stating that they think oil companies should be a part of their communities and should develop renewable sources.  But this kind of thing just doesn’t work anymore.  Chevron can’t put out an image of responsibility, while simultaneously funding a measure that would allow them to duck the cost of their clean up.  The irony in this has not been entirely lost.

The question here is whether they “agree” that oil companies should pay for their own messes.  $4 million supporting Prop 26 shows that Chevron does not.  They’re not so “neutral” on this one, and that makes us wonder why.

— Guest blogger Araceli Ruano is CAP’s Senior Vice President and Director of California.   Andrew Fitzgerald Adams also contributed.


3 Responses to Chevron and Proposition 26

  1. Peter Bellin says:

    Great discussion. This is exactly what I have been noticing, living in California. There has been very little discussion of Prop 26, that I have seen. There is heavy radio advertising in support of Prop 26, much of which is clearly misleading in nature.

    Chevron’s ‘we agree’ campaign does not address climate change in any significant way (although perhaps I tuned those print ads out after a while).

    I fear that Prop 26 will pass, doing significant additional damage to California’s ability to both balance the budget and take action to protect the environment.

  2. Mimikatz says:

    Won’t the administrative agencies just have to assess more civil penalties for violations, both administrative and court-imposed, to help pay for their programs and for clean-up costs? Rarely are the maximum penalties asked for. I assume that would change.

  3. Jeff Huggins says:

    Thanks for the helpful post and the great efforts in California, CAP and Araceli (and Andrew).

    I only have a thought or two to add.

    Long, long ago, I worked for Chevron — from 1981 to 1984 — at Chevron Research and in the Corporate Engineering Department. (During most or all of that time, George Keller was Chevron’s Chairman — the father of The New York Times’ Bill Keller, by the way.) Although I tend to think less harshly about Chevron than I do about ExxonMobil (the worst by far), BP, and Shell, and I understand that some part of this feeling on my part may be due to familiarity or “bias”, nevertheless, I don’t think we can trust or expect ANY of the oil companies to act responsibly or genuinely with respect to climate change. The phrase “trust but verify” doesn’t even do justice to the problem. “Don’t trust!” is the way that I’d put it, unfortunately, with respect to how we should approach the oil companies at this point.

    How many of them have put immense efforts into campaigns that try to make them seem environmentally friendly, responsible, and humane? In contrast, how many are actually working diligently towards a transition to renewable and cleaner energy sources? How much are they actually spending in R&D, really, in that direction, relative to revenues or to what they spend on conventional oil and gas R&D? How many actually tried to help craft and PASS a cap or tax on carbon?

    In some ways, it’s actually easier to set the stage for dealing with ExxonMobil because they are so darn bad — and obviously so — that they practically make the case against themselves, to anyone with sense. And of course BP has had light shined on it. But Royal Dutch Shell, and Chevron, may actually be presenting a different dimension of the problem, because they can seem “nice” or at least “not quite so bad”.

    In any case, it seems to me (as a former Chem Eng, a former employee of the oil industry, a person who is quite familiar with business, and so forth) that it makes very little sense to be congratulating or celebrating any oil companies at this point, until one of them makes HUGE changes in approach and discovers honesty and responsibility.

    I’d be happy to help “address” the oil industry and share observations and ideas, if anyone is interested. Indeed, if either of you find yourselves in the Bay Area, please do let me know.

    Keeping my fingers crossed for tomorrow!


    Jeff Huggins
    Los Gatos, CA