Tag Archives: Tootelian & Associates

EXPOSED: Texas Big Oil Funding Petition to Kill California’s Anti-Pollution Legislation

Stealthily and without fanfare, a petition has been launched to get a measure on the November ballot suspending AB 32, California’s landmark legislation to limit greenhouse gas emissions and spur green job growth. So who is funding the signature drive? None other than San Antonio-based oil refiners Valero Energy Corp. and Tesoro Corp. — the #7 and #8 biggest polluters in California. From the LA Times:

Two Texas-based refinery giants have pledged as much as $2 million to fund signature gathering for a ballot initiative to suspend California’s landmark global warming law [AB 32], according to Sacramento sources.

The companies, Valero Energy Corp. and Tesoro Corp., own refineries in California that would be forced under the law to slash emissions of heat-trapping greenhouse gases.

But neither Valero or Tesoro is owning up to it.

A Tesoro spokesman did not respond to inquiries. But the company’s website invites visitors to lobby Congress to ensure “fair” climate legislation and fight any effort by the Environmental Protection Agency to regulate greenhouse gases under the Clean Air Act.

Bill Day, a Valero spokesman, declined to confirm or deny the company’s involvement, saying that “any contributions would come out in normal disclosures” under California’s campaign laws.

And neither is Dan Logue (R-Marysville), one of the initiative’s main sponsors. From NYTimes:

Dan Logue, the Republican assemblyman behind the suspension, also refused to discuss where funds had originated.

So forget about the astroturf groups claiming the movement to kill AB 32 is a bunch of small local businesses worried about their survival in a tough economy. The mask is off the anti-AB 32 movement, and behind it is exactly what we thought we would find: big oil, big pollution, big corporations and the corporatist Republicans who love them. That’s why Logue, Valero and Tesoro refuse to admit where the money for the ballot initiative is coming from, even if it means possibly violating California Fair Political Practices Committee regulations. The fact that Texas Big Oil is funding an initiative to keep California’s air dirty and kill its burgeoning green economy is a PR nightmare.

So let’s have no more illusions about what the move to kill AB 32 is all about.

Killing AB 32 is not about job creation or lowering unemployment. Valero and Tesoro don’t care about creating jobs or lowering unemployment in a state over 1,000 miles away from them since that won’t increase their profits. If they did care about job creation, they would be supporting AB 32 since California’s clean/green economy is creating jobs at a rate 2.5 times faster than the rest of the economy while attracting billions in venture capital investment, including an announcement this week that Kyocera will be opening a plant in San Diego to manufacture solar modules. Besides, the Varshney/Tootelian report that AB 32 opponents often cite to prove that AB 32 will kill jobs and hurt the economy has been exposed by numerous economists, the Union of Concerned Scientists and the California Budget Project as being fatally, almost cartoonishly flawed, with one pair of economists calling it “one of the worst examples of schlock science we’ve ever seen.” Even Sanjay Varshney, one of the report’s co-authors, admitted that the report is “not exhaustive” and now seems to be backing away from its conclusions.

The move to kill AB 32 is about even more astronomical profits for Big Oil, regardless of whom or what it harms. Valero and Tesoro don’t care that hundreds of Californians die every year from respiratory illnesses aggravated by pollution, or that the adverse health effects of pollution disproportionately fall on minorities. They don’t care that the top four most polluted cities in the country are in California or that Californians breath some of the dirtiest air in America, with 95% of Californians living in areas with unhealthy air.

In fact, Valero and Tesoro want California’s air to become even more dirty and dangerous because they profit from pollution. Instead of being ethical and responsible and cleaning up their own mess, they can make even more by “socializing” and externalizing the cost of pollution — making Californians pay for it in the form of taxpayer-funded environmental cleanups, increased medical bills and lost work days stemming from pollution-related illness, and premature death. Tesoro claims it wants “fair” climate legislation when the most “fair” thing they could do is to clean up their own pollution instead of making others deal with it. And while they adamantly oppose any legislation that puts a price on carbon, the truth is that Valero and Tesoro know that carbon already has a price — the extra profits they make by not cleaning up the carbon pollution they generate.

Call Valero at (210) 345-2000 and/or email Tesoro and tell them what you think of what they’re doing. They’ll try to redirect you to a PR firm, but be insistent. And if anything, tell them that you and all of your friends will never, ever buy their gas again.

We’ve already had out-of-state interests stick their nose in to tell Californians who we can marry. Let’s make sure out-of-state Big Oil doesn’t dictate what kind of air we’re forced breath.

Co-Author of Report Cited by AB 32 Opponents Backs Away From Findings

The move by republicans and polluters to suspend/kill AB 32, California’s Global Warming Solutions Act that seeks to reduce greenhouse gas emissions and spur green job growth, was dealt a devastating blow on Friday — one of the authors of the much-cited (and much-criticized) Varshney/Tootelian report (VTR), which predicts an economic catastrophe if California implements AB 32, is now backing away from the report’s claims.

Facing yet another round of criticism — this time in a report by Stanford University economist Jim Sweeney that found VTR to be “highly biased…based on poor logic and unsound economic analysis” and overstates the costs of AB 32 “by a factor of at least 10” — Sanjay Varshney has refused to defend his report’s claims. When asked by a reporter for the Sacramento Business Journal to respond to Sweeney’s criticism, Varshney, who is Dean of the Business School at California State University Sacramento, would only say, “I haven’t really kept up with the debate. It will be very difficult for me to comment.” (You need to be a subscriber to see the full article.)

Hardly what you’d call a full-throated defense, or even a boilerplate response about his confidence in both his methods and his conclusions. And Varshney should be well-prepared to address the kind of criticism found in the Stanford report since it echoes criticisms found by other economists, as well as the Union of Concerned Scientists.

The main and most obvious criticism of VTR is that it only looks at the projected costs of implementing AB 32 ($24.9 billion) while purposefully omitting any of the savings that AB 32 would generate ($40.4 billion) — a net savings of $15.5 billion.  

It is a methodology that literally makes no sense. How can you account for the cost of buying a more fuel-efficient car, then not account for the money drivers would save at the pump by driving a more fuel-efficient car? How can you include the cost of building a home so it uses no net energy, then not include the savings for a family living in that home who no longer has to pay energy bills? Yet that is exactly what VTR does, a methodology the Stanford report calls “highly biased and has no credibility.”

Virtually all of VTR’s conclusions are based on this decision to look only at costs without savings, which the Stanford report estimates causes the results of VTR to be inaccurate by a factor of ten or greater. The authors of VTR try to justify their methodology by claiming that the estimated savings generated by AB 32 are “too speculative to consider at this time,” an explanation the Stanford report says has “little credibility” since VTR has no problem citing the costs of implementing AB 32, many of which are also speculative. And, as said before, it makes no sense to include the cost of increasing energy efficiency without including the savings from using energy more efficiently. The Stanford report goes on to highlight more errors and flawed methodology used in VTR, like claiming that saving $30/month by driving a new fuel-efficient car amounts to a $30/month increase in gas costs for those who stick with their current cars. It’s no wonder economists Christopher Thornberg and Jon Haveman of Beacon Economics called VTR “one of the worst examples of schlock science we’ve ever seen.”

Yet VTR — for which Varshney and Dennis Tootelian were paid $54,000 by the California Small Business Roundtable — is virtually the only evidence that AB 32 opponents give for their doomsday predictions that AB 32 will ruin California’s economy, cost the state a whopping 1.1 million jobs (more than have been lost as a result of the current recession) and raise consumer prices. Republican Meg Whitman has mentioned its findings as a reason why she has promised to suspend AB 32 if she is elected governor, as has a representative for her republican opponent, Steve Poizner. VTR has also been cited by numerous newspapers, including the editorial board of the Wall Street Journal, who heralded its findings as proof that there would be no “free green lunch” in California if AB 32 is implemented.

The fact that candidates like Poizner and Whitman (along with anti-AB 32 groups like the AB 32 Implementation Group) would put so much stake in a fatally flawed report that makes no secret of its most glaring failure is telling. But what are AB 32 opponents to do now when even one of VTR’s principal authors won’t defend its findings? Will they spend hundreds of thousands of dollars to fund a petition drive calling for the suspension of AB 32 when their main justification for suspending it — the conclusions of the VTR report — no longer applies? And considering the numerous studies that have found that AB 32 would create jobs, position California as a leader in the growing green/clean energy economy, reduce costs for businesses and consumers, and improve the health of Californians while reducing greenhouse gas emissions, what justification can AB 32 opponents give for defending a status quo that enriches the state’s worst polluters?