The Economy Behind California’s Green Curtain

Published September 18, 2018 at CFact.org  http://www.cfact.org/2018/09/18/the-economy-behind-californias-green-curtain/

California’s role as a supposedly global climate leader took center stage during the Global Climate Action Summit hosted by Governor Jerry Brown in San Francisco in October 2018. The Governor, however, was silent on letting the world know that California is our nation’s housing crisis, homelessness, and poverty leader.

In California, the emissions crusade goals (and costs) to reduce California’s one percent contribution to greenhouse gases have already increased the costs of electricity and transportation fuels to be among the highest in the nation and may be very contributory to California having the largest percentage of homelessness and poverty in the nation.

California households are already paying about 40 percent more than the national average for electricity according to 2016 data from the U.S. Energy Information Administration. Continuation of that emissions crusade at the expense of our 40 million citizens, and continued funding for the High Speed train, will further fuel the growth of our homelessness and poverty populations.

In addition, Californians continue to pay almost $1.00 more per gallon of fuel than the rest of the country due to a) the state sales tax per gallon which are some of the highest in the country; b) refinery reformatting costs per gallon; c) cap and trade program compliance costs per gallon; d) low-carbon fuel standard program compliance costs per gallon; and e) renewable fuels standard program compliance costs per gallon. More costs onto fuels are projected by 2030 from cap and trade and the low-carbon fuel standard that may add ANOTHER $1.00 to $2.00 per gallon to fuel.

With California energy and fuel costs among the highest in the nation, the State is leading the nation in the numbers of homeless and those on poverty:

California is trying to influence elected officials nationwide to focus on those subsidized low-power density renewables of wind and solar intermittent electricity for their economies, but the world economies are driven by 24/7 power, not intermittent power, and the two prime movers that have done more for the cause of globalization: the diesel engine and the jet turbine. Both movers get their fuels from oil and without this fuel, and the 6,000 products that come from oil and petroleum products, transportation and commerce would return to the pre-Industrial revolution age.

For the first time since 1973, the United States is now the world’s largest producer of crude oil, according to preliminary estimates published by the Energy Department. The feat demonstrates how the US shale oil boom has reshaped the global energy landscape. American oil output has more than doubled over the past decade.

The production achievement underscores the profound impact of rapid technological advances in drilling. Fracking unlocked vast sums of oil and natural gas that had been trapped underground. Drilling costs declined dramatically.

This oil boom is beneficial to 49 states, but not to California. California is an “energy island” to its almost 40 million citizens, bordered between the Pacific Ocean and the Sierra Nevada Mountains. The State has no pipelines over those mountains to access the oil, thus any excess oil needs to go through the Panama Canal to reach California.

Even though California is sitting on one of the largest shale reserves and ocean crude oil reserves in the country in the Monterrey Shale and Pacific Ocean, California increased crude oil imports from foreign countries from 5% in 1992 to 56% in 2017.   The shale boom has important security implications. Today, the United States is less reliant on foreign oil, including from the turbulent Middle East, except for California, which now relies for the majority of its oil from nine major foreign sources for California’s crude oil.

In pursuit of the emissions crusade that California wants the world to join, the Governor, has demonstrated a lack of understanding of basic math, toward 100% renewables and “zero-carbon” sources in electricity by 2045. The future economic viability of the any economy will be dependent on citizens electing representatives that have an understanding of basic math.

Ronald Stein, P.E.

PTS ADVANCE

Founder and Ambassador for Energy & Infrastructure

Ron.Stein@PTSADVANCE.com

949-268-4023

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