California Republicans Seek Fuels Cap-and-Trade Exemption

Proposed bill would permanently exempt oil and gas from program.

December 02, 2014

SACRAMENTO – Returning to an issue that has divided legislative Democrats and permeated campaigns throughout the state, yesterday California Republicans announced a pair of bills that would prevent California’s cap-and-trade program from expanding to cover oil and gas.

In a recent article, the Sacramento Bee writes that a sweeping 2006 law aimed at reducing carbon emissions launched a system requiring industries to purchase permits covering what they put into the air. Producers of transportation fuels have yet to be required to buy permits, but that will change on January 1.

With oil companies and the nonpartisan Legislative Analyst’s Office warning of a spike in gas prices, a group of Democrats last year sent a letter to the California Air Resources Board urging a delay. Now, Republican lawmakers chose the first day of the 2015-2016 legislative session to announce their bill, saying that inaction would reverse low gas prices and burden individual drivers, businesses, schools and farms. A price increase would particularly hit residents of larger, often rural districts who must drive long distances to get to school and work, lawmakers said.

The bills would go further than what Democrats backed last year. Legislation by Assemblyman Henry Perea (D-Fresno), would have delayed putting transportation fuels under the program. The Republican proposal would keep oil and gas out permanently. While Republicans are unified in their opposition to the policy and numerous centrist Democrats have objected, Democratic leaders in both the Senate and the Assembly have reaffirmed their support for staying the course and letting the cap-and-trade system proceed as planned. Gov. Jerry Brown also opposes changes.

Despite that hurdle, Republicans said they will gain traction as constituents encounter higher gas prices and start pressuring their elected representatives. The fact that 16 Democrats signed a letter criticizing cap-and-trade signals growing bipartisan discontent with the program, Patterson said.

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