California's Big-Bucks Battle Over Clean Energy

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Former President Bill Clinton speaks at a rally in support of California's Proposition 87 in Los Angeles, Friday, Oct. 13, 2006.

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About 37% of California's oil is pumped in the state, and another 21% comes from Alaska. But the rest is imported, and the campaign for the initiative has sought to draw a link between foreign oil and global terrorism. One spot features a photograph of King Abdullah of Saudi Arabia and an angry Middle Eastern mob burning American flags, as the narrator asserts: "We buy their oil, they burn our flag." Gore warns at the end of his ad that the sooner Californians pass Prop 87, "the safer we'll be."

Such scare tactics are being used on both sides. Oil companies, led by Chevron and Aera Energy, an operation of Shell and ExxonMobil affliates, have poured $73 million so far into defeating the measure, claiming that it will raise gas prices at the pump. Proponents dispute that, pointing out that crude oil prices are set globally, not locally. (What's more, the measure includes a provision barring companies from passing the tax on to consumers.) Oil companies also claim the extraction tax will put marginal operations out of business — thus reducing the supply of domestic crude and forcing California to import even more foreign oil. "Aren't gas prices high enough?" ask anti-Prop 87 flyers distributed to voters this week.

Big Oil's campaign seems to have been effective so far. Support for the initiative has dropped from a 52%-31% lead last July to a statistical dead heat at 44% to 41% in a Field survey released on Oct. 4. Several of the state's leading newspapers are urging defeat of the initiative, including the Los Angeles Times, which called the measure "an extortion tax," arguing that "high gas prices are already creating a powerful market incentive for privately funded research on alternative fuels." Moreover, a lack of enthusiasm for California's Democratic candidate for governor, Phil Angelides, lagging far behind Republican Arnold Schwarzenegger in the polls, could discourage likely Prop 87 supporters from turning out to vote.

Supporters hope that the Gore and Clinton TV spots could give new impetus to the initiative. "It comes down to: Who do you trust?" says consultant Paul Begala, a former Clinton aide who is a strategist for the Yes on 87 campaign. "Do you believe Al Gore, Bill Clinton and [Los Angeles mayor] Antonio Villaraigosa? Or do you believe the oil companies?" In a blue state such as California, that argument carries weight. But in a state where gas prices are the highest in the nation, consumers are also worried about whether taxing Big Oil for clean air and energy independence will affect own pocketbooks.

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