Last July, California Gov. Jerry Brown announced a “Climate Action Summit” meeting to be held in San Francisco in September 2018, with the direct goal of supporting the Paris climate agreement recently abandoned by President Trump. “No nation or state is doing what they should be doing,” Brown said at the time. “You can’t do too much to sound the alarm because so far the response is not adequate to the challenge.”
California’s own record during Brown's tenure is muddled, as I’ve previously noted, but the state could start to change that, according to a new report called “The Sky’s Limit California,” from Oil Change International in collaboration with a broad coalition of environmental justice and consumer groups. California can do this by matching its existing policies to reduce fossil fuel consumption with new policies for “a managed decline of oil extraction” — an approach described in a recent paper as “cutting with both arms of the scissors” — and by providing for a "just transition" for workers and communities who would otherwise suffer, a major moral and political challenge that’s been neglected far too long.
Even without such planning, California’s oil and gas extraction jobs are plummeting, even as new, dirtier wells proliferate. There were 22,800 such jobs in 2012, the report notes, and fewer than 14,500 in the third quarter of 2017, a drop of 36 percent with no provision to take care of the displaced workers. It was even worse in Kern County — the heart of California’s oil and gas extraction industry — where employment plummeted by almost 40 percent just between 2014 and 2017.
The report builds on the analytical foundation of an earlier Oil Change International report from September 2016, and cites a combination of factors that make California the ideal political entity to put this combination of policies in place as a potential global model. It would need to be rapidly adopted by others as well, in order to meet the goals of the Paris accords, but if the economy of our most populous state can adapt that quickly, it's an enormous validation for the model.
The earlier report concluded that potential carbon emissions from currently operating oil, gas and coal fields and mines would take us beyond 2 degrees Celsius of warming, and that oil and gas alone would take the world beyond 1.5 degrees. But with a decline in production, “clean energy can be scaled up at a corresponding pace, expanding the total number of energy jobs.” Hence, strategically reducing carbon energy production makes sense both economically and environmentally. In other words, a livable future is possible, but it’s up to government leaders to make that possibility real. This new report offers a blueprint for how it can be done within one American state that, considered on its own, would have the world's sixth-largest economy.
“The lack of action on the production side is a major hole in California’s existing policies,” the report’s main author, Kelly Trout, told Salon. “Staying within safe climate limits will require a managed decline of fossil fuel production.”
At the same time, this move away from a fossil fuel economy "will have profound effects on people on its front lines, and so active dialogue with, investment in, and support for these workers and communities is essential,” Trout said. “We show that California has the resources at hand to invest deeply in supporting workers through this transition. If proactive planning begins now, then it is far more likely that the transition to a clean energy economy goes hand-in-hand with building a more fair and just economy."
There are various reasons why California can play a lead role, as Brown and other state politicians have promised. “In the context of global equity, it is important for relatively wealthy countries and states like California to lead in charting a managed decline of fossil fuels, because they have the resources and ability to move first and fastest,” Trout said. “While California is a major producer of oil and gas, its economy and job market is no longer dependent on drilling.”
Oil and gas extraction, along with other forms of mining, now account for less than 0.3 percent of California’s gross domestic product, according to the report. On the other hand, California still ranks among the 15 "countries and U.S. states that have extracted the most oil over the past century," and among that group "has the second-highest GDP per capita, trailing only Norway.”
That's why “California can set a global example of what a just transition away from fossil fuel extraction can look like," Trout said, "and it has the resources to do so.”
The main elements of the proposed plan are as follows:
- Cease issuing permits to drill new oil and gas wells. This would prevent a projected 55 percent increase in future emissions due to California oil production over the next 12 years.
- Begin rapid phase-out of production from 8,500 active wells within a 2,500-foot health buffer zone around homes, schools and hospitals, as the first step in the managed decline of existing extraction. This would reduce production by 12 percent.
- Establish a Just Transition Fee on oil production (from 5 to 10 percent), exclusively dedicated to funding support for workers and communities through the transition to clean energy.
- Establish a Just Transition Task Force to develop and implement a comprehensive, inclusive statewide transition plan.
Crucially, the supply reductions involved would be greater than California’s currently projected demand reductions. Halting new wells and phasing out wells inside the health buffer areas could total a reduction of "660 million barrels from 2019 through 2030,” whereas meeting Brown’s goal of reducing oil use in cars and trucks by 50 percent by 2030 would save about 430 million barrels of oil over that same period. So the irony implicit in Brown's plan is that if California fails to limit its own oil production, "it could add a greater amount of new oil supply to the market, undermining the effectiveness of demand-side measures.”
This has been the state’s great failing in the past, as I noted in a Salon story last year:
“Gov. Brown talks a very good game on climate,” said R.L. Miller, founder of the Climate Hawks Vote super PAC and chair of the California Democratic Party’s environmental caucus. “However, he's proven himself completely unwilling to turn off California' oil spigot -- the state is still one of the nation's top producers of oil."
Reasons for that are largely rooted in the money power of the oil lobby, amplified by the peculiarities of state politics, including the "top-two" primary election system, as described in a report from the Center for Public Integrity, “Big Oil’s grip on California.” With sharply increased grassroots activism and the state’s continued shift to the left, that grip could be about to break — and these proposals could help do that.
The reasoning behind the proposals is straightforward, according to Trout. By ceasing the permits, “California would stop enabling new oil and gas production, which undermines the state’s commitment to climate leadership and the Paris goals.” Implementing health buffer zones “would initiate a managed phase-out of existing wells in California in a way that puts priority on protecting people’s health and advancing environmental justice.” she said. Managed decline and the just transition plan and task force are matters of basic government responsibility, given the inevitable end of the fossil fuel era.
“In responding to the Trump administration’s push for new offshore oil drilling, California’s State Lands Commission, including the lieutenant governor, declared that ‘the fossil fuel era is ending,’" Trout said. "Climate leadership means planning for the end of the fossil fuel era. The oil sector as a whole is California's largest climate polluter, every part of it is linked, and winding down supply, demand and infrastructure together is the most effective way to reduce emissions at the pace that's needed.”
As for the step regarding the health buffer zone, Trout explained that “the greatest exposure to toxic air pollution likely occurs within one-half mile, or approximately 2,500 feet, of active oil and gas wells. These wells are disproportionately located in some of the state’s most polluted communities, which are more likely to be low-income and communities of color.” The majority of shale-gas producing states, for example, already have similar buffer zones in place.
As for a "just transition" away from fossil fuel production, that must include "providing social protection, job training and career support to affected workers," Trout said. “It’s only fair that the oil industry share in the responsibility. Placing a fee on oil production could raise adequate funds to cover basic social protection costs for workers like wage replacement and college tuition.” For decades, the oil industry has blocked all efforts to establish a state oil extraction fee — something that the report notes has already been imposed by almost every other oil-producing state or nation. Finally imposing one now would allow its revenue to be used for just transition costs.
The importance of California as a global leader in creating a post-carbon future can be seen through the lens of five key principles laid out in a forthcoming paper on supply-side equity, again authored by Oil Change International and various partners. These are:
- Curb extraction at a pace consistent with climate protection.
- Ensure a just transition that affords fossil fuel-dependent workers and their communities a viable, positive future.
- Respect human rights and safeguard local environment: Prioritize closure of activities that violate human rights and local environmental protections, especially in poor or marginalized communities.
- Transition fastest where it's least socially and economically disruptive, particularly in wealthier, less extraction-dependent countries.
- Share transition costs fairly: Ensure that poorer countries whose economies depend on extraction receive support for an effective and just transition.
“Applying this equity lens, California rises to the top as a region that should move first and fastest in sharply curbing future extraction,” the report says.
“If California were a country, it would rank as one of the wealthiest, most historically prolific oil producers,” but as noted, its economy now is very diverse and no longer extraction-dependent.” So the state is clearly one of the oil producers "with the greatest capacity to reduce its extraction quickly while minimizing social and economic disruption.” It also has the political and economic clout -- and perhaps the political will -- to apply the equity principles of a just transition, while respecting human rights and local environmental concerns.
In the past, Brown has resisted calls to limit California’s fossil fuel production, arguing that it would only mean importing dirtier (more carbon-intensive) oil from elsewhere. But the report offers two compelling reasons to reject this argument once and for all. First, California’s recent oil production is itself increasingly dirty, and will only get more so in the future. Second, reducing both consumption and supply has synergistic effects, while allowing supply to keep increasing undermines the benefits of reducing consumption.
Regarding California’s oil production, the report notes:
Carbon emissions from the oil extraction process remained steady in California from 2000 to 2015, even as overall oil production fell by 30 percent over that same period, meaning the carbon intensity of production has increased. ...
The majority of oil produced in California is heavy oil, which requires a large amount of energy to extract and process. Much of the state’s production now depends on energy- and water-intensive “enhanced oil recovery” (EOR) techniques, including waterflooding, steamflooding, and cyclic-steam injection, to loosen and push oil toward extraction wells. Hydraulic fracturing, or fracking, and acidizing is also used to ‘stimulate,’ or enable production from a significant proportion of wells.
In short, California’s oil is hardly a “cleaner” alternative to oil from elsewhere. Which brings us to the second argument — that because supply and demand are linked, it’s much more effective to cut with "both arms of the scissors":
For example, meeting the state’s goals to reduce oil consumption in transportation would cause some decrease in global oil prices, in turn encouraging greater consumption in other states or countries. However, simultaneously reducing California’s production of oil would have the opposite price effect and encourage less consumption, thus reinforcing the benefits of demand-side measures.
Similarly, if California succeeds in rapidly reducing its oil use and production, it will also need to refine less oil. It follows that the state should also stop permitting the expansion of new refining and other fossil fuel infrastructure, which could enable greater production in other regions by increasing fuel exports from the state’s refineries.
These wider market effects underscore how California’s actions have global significance, while advancing the state's self-defined goals:
By establishing complementary oil supply and demand transition measures, California can show global leadership while reducing its own oil imports over the long-term. If the state meets its goal of cutting oil use in vehicles by 50 percent by 2030 and enacts the policies described in this report to limit production, California can significantly reduce its imports of oil by 2030 as well.
As for the idea of a "just transition," it's been around for a long time and can arguably be traced back to the post-World War II GI Bill. But it's only floated around the fringes of policy thought in recent years. Now it’s "absolutely essential,” in Trout's words.
Everyone has a right to both a healthy environment and decent work that provides family-sustaining wages and benefits. The labor movement and the climate movement face a lot of the same obstacles -- including, at the national level, a political system hijacked by a wealthy elite and geared toward enriching the few at the expense of the rest of us.
California is looked to by other states and other jurisdictions around the world as a laboratory for forward-looking environmental policies. By investing in a just transition, California can set an example of how tackling the climate crisis can go hand-in-hand with building a more democratic, inclusive and equitable economy.
The report has a wealth of supporting details, which are especially important for California residents, activists and policymakers to consider. But its broad arguments are what matter to the rest of the world: We have reached the point where the logic of fighting climate change with "both arms of the scissors" -- and building a better future by any means necessary -- makes sense on a global scale.
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