Billions for T. Boone Pickens, Little for California
Prop. 10’s alternative fuels bond doesn’t help as much as it should.
Thursday, October 23, 2008
As with Prop. 7, green-and-cuddly Prop. 10 is facing opposition from the state’s biggest environmental groups, including the California League of Conservation Voters, Sierra Club California and Union of Concerned Scientists.
But while most of Prop. 7’s opponents think the proposition’s authors mean well, they describe Prop. 10 as a greedy scheme that will line the pockets of the billionaire who wrote it.
The $5 billion bond measure would dedicate $3 billion to rebates for buyers of cleaner-than-gasoline vehicles. About $1.25 billion would be earmarked for renewable electricity generation; the rest would support clean-tech job training and education.
Under the rebate plan, people buying cars that get 45 or more miles per gallon would get $2,000 back. Buyers of “dedicated clean fuel vehicles” that run on electricity, hydrogen, biomethane, propane and natural gas would get a $10,000 rebate. And buyers of big rigs that run on natural gas would get $50,000.
Opponents see Prop. 10 as a transparent money grab by T. Boone Pickens, owner of Clean Energy Fuels Corp., a Southern California-based company that supplies natural gas for vehicles and operates fueling stations throughout the state. Because it gives the biggest rebates to buyers of natural-gas-fueled big rigs– the other clean-fuel vehicles listed in the proposition are not readily available– Prop. 10 appears designed to create demand for Pickens’ product.
“It’s going to make T. Boone Pickens and his clean fuels company rich,” says Jim Metropulos of Sierra Club California. “It really is about greed, and not a green bond.”
Yes on 10 Campaign Manager Martin Wilson rebuffs. “They say it somehow favors natural gas when it really doesn’t. It’s fuel-neutral,” he says. “When you look at the market, there’s more activity on electric and hydrogen [vehicles] than natural gas. Once a rebate program like this is in place, not only will it stimulate consumer demand, it will also stimulate production.”
Prop. 10 supporters are mostly individuals, including Santa Cruz County Treasurer and former assemblyman Fred Keeley, and former California Air Resources Board chairman John Dunlap.
But Pickens’ company financed most of the campaign, contributing $3.75 million of the $4.5 million coffer.
The No on 10 campaign did not report any contributions.
Metropulos describes Prop. 10 as a boondoggle. “The economic benefit is going to go to very few people, people who are invested in natural gas,” he says. “Should we saddle the General Fund with paying back debt service [on bonds for vehicle rebates]? Bonds for roads, water projects, park and open space– that’s how you use bonds for investments. You don’t use them to buy cars.”
Wilson disagrees, saying the rebates would stimulate the economy by generating income for consumers, auto dealers and the state through vehicle registration fees. “It would do a great deal for the economy,” he says.
Metropulos sees the potential for Prop. 10 to have the opposite effect. Out-of-staters could buy qualifying cars and trucks in California, take the state rebate and split, he says. “There is nothing in the initiative that says those trucks have to stay within California.”
Wilson says that’s a baseless concern. “To get the rebate you have to be a resident of the state and register the vehicle in California,” he explains.
Regarding the environmental impacts, the pro- and anti-10 camps again come to opposite conclusions. Consultants for the pro-10 campaign released a study claiming the proposition would displace more than 700 million gallons of gasoline and diesel fuel per year, saving $3.2 billion in foreign oil costs and reducing greenhouse gas emissions by roughly 4 million metric tons per year.
“Natural gas is the cleanest fuel commonly available on the market,” Wilson says. “We’ll get a lot of old, dirty trucks off the road.”
But Metropulos isn’t convinced that Prop. 10 would do any environmental good. Some natural-gas-powered vehicles actually have higher greenhouse gas emissions than diesel-powered ones, he says. And he worries that increased demand of natural gas for cars and trucks could replace natural gas power plants with dirtier coal.
“Natural gas is one of the best fossil fuels for power production,” he says. “Why would you want to take those plants out and use that for cars?”
As we go to print, most of California’s major newspapers have strongly opposed Prop. 10. A Los Angeles Times editorial gives the prop’s biggest donor no credit: “Billionaire Texas oilman T. Boone Pickens, listed by Forbes as the 131st richest American, really, really wants your money. So much so that his natural-gas fueling company has shelled out [$3.75] million to further the reprehensible scam known as Proposition 10.”