The Big Three – Governor Newsom, Senator Pro Tem McGuire and Assembly Speaker Robert Rivas — celebrated their end of the session deal for “Landmark Clean Energy, Climate and Affordability Solutions” with a headline that declared, “California is delivering real and lasting energy savings for families, workers and businesses.”
It’s a load of horse poop. The truth is 90% of the “solutions” will drive up costs for gasoline and electricity.
The reauthorization of cap and trade without a ceiling on the price of carbon credits could add 60 cents to a gallon of gasoline. The replenishing of the state’s wildfire fund to protect negligent utilities with $9 billion will come right out of ratepayers’ pockets. The move to a Western regional grid will give regional power traders the power to increase electricity prices free of state control and anti-price gouging laws. Other regional markets, East Coast grid PJM and New England grid NISO, have experienced such huge increases in the price of electricity that a bi-partisan group of 9 governors are in open revolt.
Rather than delivering clean energy and climate solutions, the package will open Kern County up to indiscriminate oil drilling, divorced from any needs of pipelines there to feed crude oil into Northern California refineries. That hurts Kern County communities that had hoped for a future free from poisonous oil drilling, which is what Governor Newsom promised them less than a year ago. The deal also requires the Governor to remove the summer-time gasoline blend that has kept smog down in Los Angeles if it is estimated that it will increase gas prices.
The package mandates a study of an insane idea to allow oil refiners to use the dirtiest gasoline if they pay a 25 cents per gallon tax. Don’t you think refiners will pass that on to consumers and Californians will pay more for dirty air with higher gas prices? And the deal includes study of a Western-wide gasoline blending standard to replace California’s clean burning fuel. That could work if the standard is as high as California’s or it could go to the lowest common denominator if it is a lower standard. In the hands of the California Energy Commission, I would bet on the lowest common denominator.
The Commission recently froze development of a gasoline price gouging penalty for five years despite the Governor calling a special legislative session in 2023 to have it enacted. Bottom line, California’s Democratic leaders led by Governor Newsom have embraced deregulation that will lead to higher prices and environmental degradation. This is the new state of Sacramento. It happened in response to Trump, who is making Democrats reevaluate their values, like regulation, that have worked well for the state, consumers and the environment, in favor of an Ezra Klein-inspired Abundance theory that holds regulation is antithetical to progress.
On issues of environment, oil drilling, climate change and gasoline prices, there can be little question in the eyes of a reasonable observer that California needs more regulation, not less.
Nonetheless, Democrats, like Newsom, who extolled the virtue of limits on oil drilling and restrictions on oil refiners as recently as six months ago, are trying to make a name for themselves by dumping regulation of all types. Pro Tem McGuire and Speaker Rivas are going along for the ride. It’s disgusting and dangerous for consumers and the environment.
Shame on Newsom, McGuire and Rivas. Voters know BS when they hear it.
This deal displays their hypocrisy and their weakness as they try to convince voters to trust them with a redistricting gerrymander in Prop 50. This deal will not engage the base. It does more damage to their cause than the millions than they are going to raise for Prop 50 from the beneficiaries of the deal: utility workers’ and oil refiner workers’ unions, utilities, oil drillers and their workers, energy traders, and cap and invest investors.
If they lose Prop 50, they have no one to blame but themselves.
What’s clear is those of us who care about cleaner air, cheaper fuel, lower electricity rates and fighting climate change need to find a new paradigm and new leaders. The Big Three Deal is ivory tower liberalism at its worst, benefiting capital-rich cap and invest investors, utilities, energy traders, and oil drillers in a twisted Orwellian rationalization at the expense of working people, their communities and their economic interests.
A strategy memo by pollster Geoff Garin and Brian Fallon that circulated on Capitol Hill in the fall found that voters see corporate/billionaire power as a bigger barrier to prosperity than red tape and regulation — by a margin of roughly 2 to 1. “A populist economic approach better solves for Democrats’ challenges with working-class voters.”
The Abundance theory argues our biggest problem is “scarcity politics” — too much red tape blocking housing, infrastructure, clean energy. The Garin memo argues back that while abundance appeals to elites and policy thinkers, it is less effective politically than confronting concentrated wealth and power.
Of course, fighting concentrated wealth and power is hard work. It takes more than three guys cutting a deal in the middle of the night that will help the entrenched interests represented in the Capitol. That’s the easy way, since the monied interests are all bought off, few people will object when it is railroaded through in a matter of hours before the end of session without opportunity for adequate review, comment or amendment.
Populism requires fealty to principles, people, democratic process and not being afraid to piss off the powerful. As Garin et al write, “A populist economic message that is laser-focused on bringing down prices and confronts the outsized power of corporations and billionaires directly aligns with voters’ most pressing concerns and resonates across both Democratic and Independent constituencies.” By this standard, the Big Three Deal is A Big Fail.
