Should California set U.S. energy policies?

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Californians see themselves as paragons of environmental virtue, and standard bearers for Pennsylvania and America on policy — even though Gov. Jerry Brown says the day our 30 million vehicles “can get around without using any gasoline” will be “the time for no more oil drilling” and notes that the state is blessed with onshore and offshore petroleum.

But oil production is falling steadily and California now produces just 38 percent of its needs, while importing 12 percent of its oil from Alaska and another 50 percent from foreign nations, especially Canada, energy consultant Tom Tanton points out.

Meanwhile, Citigroup’s Energy 2020: North America report says the continent could be almost energy independent in six years, by tapping vast oil and natural gas reserves. That would further lower energy and consumer prices, insulate North America from blackmailing foreign suppliers, and spur job creation based on reliable, affordable energy.

Driving this revolution is horizontal drilling and hydraulic fracturing, which California legislators, regulators and eco-activists want to ban. According to Citigroup, IHS Global Insights and the U.S. Energy Information Administration, “fracking” technology contributed 2.1 million jobs and $285 billion to the U.S. economy in 2013, plus $62 billion to local, state and federal treasuries. Pennsylvania has seen significant job and revenue gains.

Fracking also slashed America’s oil imports from 60 percent of total needs in 2005 to just 28 percent in 2013. It slashed our import bill by almost $100 billion annually.

The only thing standing in the way of an employment, economic and industrial boom, says Citigroup, is politics: oppressive anti-hydrocarbon regulations, like those prevailing in California.

The state imports 29 percent of its total electricity from the Palo Verde nuclear power plant in Phoenix, coal-fired generators in the Four Corners area, and hydroelectric dams in the Southwest and Pacific Northwest, Mr. Tanton says.

The state generates another 50 percent of its electricity using natural gas imported via pipelines from the Rockies, American Southwest and Canada, while blockading its own deposits. Gas-fired generators also back up bird-killing wind turbines, which are manufactured using rare earth metals produced in environmentally destructive ways in China.

All together, California depends on neighbors for 62 percent of its gasoline and 79 percent of its electricity. It lets others do the heavy lifting, chastises them for emitting greenhouse gases and claims the Golden State is “clean and green.”

These foreign fuels power the state’s profitable Silicon Valley and entertainment industries – as well as heavily subsidized electric and hybrid vehicles that wealthy drivers prize for their exaggerated ecological bragging rights, $7,500 tax credits, and automatic entry into fast-moving HOV lanes.

California’s poor white and minority families pay $4.23 per gallon for regular gasoline, the second highest price in America. They pay 16.2 cents per kWh for residential electricity, double that in most states.

Now state regulators want to apply costly carbon dioxide cap-and-trade regulations to gasoline and diesel fuels. The rules have already impacted large industrial facilities and driven thousands of jobs out of the state.

On Jan. 1, 2015, they will add at least 12 cents more per gallon of gasoline, with the price escalating in subsequent years. If there are insufficient “carbon allowances” — or if traders buy large quantities of allowances, and then withhold them from the market — the resultant volatility could cause price spikes of $1 or more per gallon, experts warn.

State Sen. Darrell Steinberg (D-Sacramento) wants to replace cap-and-trade with a carbon tax, claiming it would be more transparent and predictable. He still wants gasoline prices to soar. “Higher prices discourage demand,” he says. “If carbon pricing doesn’t sting, we won’t change our habits.”

He and wealthy Californians won’t have to worry. But should they be allowed to impose more regulations that kill jobs, drive middle class families onto welfare rolls, impair their health and welfare, and force them to abandon their dreams  — for no real health or environmental benefits?

And should their views determine policies for the rest of America?

Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT/org) and author of Eco-Imperialism: Green power - Black death.

To contribute to PowerSource Voice, a regular feature offering insight and opinion on energy subjects, contact Associate Business Editor Teresa F. Lindeman at tlindeman@post-gazette.com


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