California Oil Industry Trying to Evade the Cap-and-Trade System

I started hating the oil industry when I was five-years old. My parents weren't hippy environmentalists but we were living in Wilmington, a majority Latino community near the Port of Los Angeles with the highest concentration of oil refineries in the state. Growing up with asthma, missing lots of school days, and not being able to play outside was considered normal in our community.  

Twenty plus years later progressive California policy is forcing polluters to pay to clean up their toxic pollution. This year, a new law went into effect that mandates that a quarter of revenues from California’s cap-and-trade system be used for investments in places like Wilmington and other environmentally burdened communities. But now the oil industry is lobbying for legislation that would exempt it from that requirement—and that would be a very bad idea. 

California has been a leader in combating global warming with its landmark legislation AB-32 passed in 2006, which requires the state to reduce greenhouse gas emissions to 1990 levels by 2020. To reach this goal, the state set up a cap-and-trade fund which caps the amount of toxic emissions a company is allowed to produce. Those that pollute less than their allotted amount can sell or trade their allowances, and those that pollute more can buy these “offsets”. The cap that is set on emissions will decline more each year, which motivates polluters to clean up, as the offsets will become more and more expensive.

While the cap-and-trade system is designed to reduce emissions statewide, environmental justice advocates were concerned that emissions would continue to be high in the most polluted communities because polluters could purchase offsets in other locations. Environmental justice advocates fought for SB 535 to correct this problem, requiring 25% of all cap-and-trade revenues to be invested in the state's most environmentally burdened communities. The law went into effect this year allocating $277 million towards supporting renewable energy, affordable housing, low-carbon transportation, and urban greening in places like Wilmington, West Oakland, and Richmond. This pot of money will increase year after year as the revenue from the cap-and-trade program increases. Our communities are finally being given deep investments to counter the history of dumping that has occurred.

For the fiscal year 2015-2016 the cap has expanded to include motor fuels, making distributors of gasoline and diesel required to submit allowances for all California state sales. The California Air and Resources Board (CARB) estimates that including motor fuels in the cap will generate up to $2 billion dollars in the cap-and-trade fund next year, of which 25% would be allocated to disadvantaged communities.

The oil industry is obviously not happy with the expansion of the cap and has spent millions of dollars to try and stop it. Their lobbying arm the Western States Petroleum Association, the state's top lobbying group, spent $8.9 million on lobbying in 2014, double what it spent the previous year to evade California's progressive environmental legislation.

Every time the oil industry wants to thwart California’s progressive environmental policy changes it tries to scare consumers by arguing that gas prices will go up if they have to follow strict environmental regulations. However, we know that changes in gas prices are more influenced by global factors rather than state policies. In 2010, the oil industry-sponsored ballot initiative Proposition 23, which would have suspended AB 32, used the same "pay-at-the-pump" argument. Fortunately, the proposition was defeated in the polls.

This past year the petroleum association lobbied CARB to change its cap regulations and pushed for legislation to exclude motor fuels from the cap. The oil industry used their "hired" state representatives, notably my state senator Isadore Hall (D-South Bay Los Angeles) to introduce a new bill, AB 69, to exclude the oil industry from the cap-and-trade requirements. Senator Hall notably has received over $80,000 in campaign contributions from the oil industry. The bill was framed as a measure to keep gas prices down for consumers. Senator Hall argued that AB 69 was necessary to protect his constituents, mostly low-income people of color because they would be particularly hurt by higher gas prices.

I would like to give the oil industry and Senator Hall a reality check on what is really hurting us. Our lungs. 

A study done by researchers at UCLA found that children in Wilmington suffer from asthma at a rate greater than twice that of the national average, with only half of those children with asthma getting medication, due to the high rate of uninsured and impoverished families. These conditions have short and long-term consequences. Communities with high rates of asthma have higher school absent rates, creating educational barriers and causing schools to lose per-pupil funding.

Do you know what Wilmington residents spend more money on than gas? Healthcare.

Residents of Wilmington are 99 percent of Latino origin with 24 percent of people living below the federal poverty line and a high undocumented immigrant population. Latinos are less likely to own cars and more likely to rely on public transportation. Even with the Affordable Care Act, the undocumented population still lacks assess to healthcare.

We want justice. This implies the oil industry doing its fair share to invest in our communities. The oil industry can’t give me back strong lungs. They can’t undo my memories as a child hearing refineries explode and being so afraid for my family's safety. They can’t give me back the nights I spent in the emergency room on breathing machines as a child. But they should pay for the violence they have committed to our community.

California is moving in the right direction by charging polluters. Although they are continuing to fight, the oil industry, the Petroleum Association, and Senator Hall are not going win at escaping these progressive policies.