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How Big Oil wins in green California

A person in a bear costume wearing punching cloves stands in front of prop oil derricks with signs against oil drilling.
Miguel Gutierrez Jr.
A protest against "Big Oil" outside of the Democratic Party convention at the SAFE Credit Union Convention Center in Sacramento on Nov. 17, 2023.

Sen. Lena Gonzalez represents an industrial district that includes Long Beach, where poor neighborhoods suffer from pollution. She has a 100% rating from environmental groups that praise her for taking on the Big Oil lobby in Sacramento.

It was surprising for her, though, when the state’s powerful building and construction trades unions allied this year with the oil lobby to kill three of her bills aimed in part at protecting the health of vulnerable communities.

“A lot of folks said to me, ‘Sorry, but I made my promise to the building trades that I wouldn’t vote for another environmental bill,’ ” Gonzalez said. “And so straight out of the horse’s mouth, that’s what I had gotten, which was really, really hard to hear.”

The dirty little secret about green California, a global leader on climate policies, is that Big Oil still wins a lot of its political fights.

Its trade association, the Western States Petroleum Association, and Chevron Corp. spent a combined $15.3 million on lobbying this year, more than any other lobby groups. The oil industry as a whole also donated more than $427,000 to legislators’ campaigns this year and more than $3.5 million to legislative candidates since 2019.

But it’s oil’s alliance with the powerful State Building and Construction Trades Council of California that often makes the biggest difference, forcing the Democratic supermajority to choose between the environment and oil industry jobs. The building and construction trade unions also have long bankrolled California’s labor-friendly Democrats. So far, the council has donated at least $157,000 to the campaigns of California’s legislators this year and more than $1.9 million to legislative campaigns since 2019.

“In California, our best (environmental) bills are being blocked by the oil industry using the building trades as ventriloquist dummies,” said RL Miller, a Democratic activist and environmental advocate at Climate Hawks Vote.

Of at least 21 bills the oil and gas industry opposed this year, Gov. Gavin Newsom signed only seven. Half of the bills the oil industry opposed also faced opposition from the building trades union, according to interviews and a CalMatters analysis of legislative testimony and written opposition to bills.

Catherine Reheis-Boyd, president of the Western States Petroleum Association, said the stalled bills reflect Democrats questioning how a transition to green energy will play out in practice. Moving too quickly would kill tens of thousands of good-paying jobs, harm California’s already fragile energy grid and could lead to a repeat of the 1970s fuel crisis that saw massive lines at gas stations as the economy tanked, she said.

“That’s why I think these questions are coming up now,” she said, “because people (in the Legislature) are beginning to go, ‘OK. Wait a minute. How is this really going to work?’ ”

This year’s biggest battle

There has long been tension between California’s reputation for environmentalism and its role as the nation’s seventh-largest oil producer and the third-largest refiner of crude oil. California is also one of the top consumers of gasoline on the planet, even with a special blend of gas that requires a more expensive refining process.

That tension erupted into a war last year under the Newsom administration, which adopted policies to ban sales of new gas-powered cars by 2035 and go carbon neutral by 2045, with a goal of dropping gas consumption by 94%.

The biggest battle was fought early this year after gas prices spiked to record levels and Newsom demanded a windfall tax on oil company profits.

“Nothing justifies these outrageous and unconscionable prices,” Newsom said in October 2022 as he called a special session of the Legislature. “This is just price gouging. They can’t get away with it. They’re fleecing you. They’re taking advantage of you, every single one, every single day. Hundreds of millions of dollars a week they’re putting in their pockets.”

Meanwhile, the governor hinted at the power of the oil lobby in California when he said that many of his fellow Democrats are “wholly-owned subsidiaries of the fossil fuel industry.”

In the end, Newsom claimed victory for the bill that Democrats passed during the special session. “We proved we can actually beat Big Oil,” Newsom said in March during a ceremony under the state Capitol rotunda.

But the law was significantly watered down amid opposition from the trades unions and the oil industry. In the end, it called for a new watchdog division of the California Energy Commission to monitor prices and possibly apply penalties. But it could take years to develop the rules determining unfair profits.

Even with the modified law, the oil industry and the building trades council made a last-minute attempt to dilute it even more.

They turned to Sen. Steven Bradford, the Democratic chair of the Senate Energy, Utilities and Communications committee, whose Southern California district includes three oil refineries. Bradford’s campaigns received $687,600 from the trades unions and at least $155,969 from the oil and gas industry since 2006, according to a CalMatters analysis of data collected by Open Secrets, a non-profit group that tracks campaign donations.

Environmental advocates in 2022 ranked him in the bottom fourth of California’s Democratic senators. As the special session on gas prices was gearing up, Bradford reminded his colleagues that they “must be strong advocates for every Californian who still needs reliable and affordable gasoline,” and he urged them to tread carefully and “not make the situation worse.”

Just days before the Legislature went into its fall recess, Bradford used the secretive process known as “gut and amend” to turn a bill on homelessness into legislation that required the energy department’s new division to consult with the Department of Industrial Relations, oil industry stakeholders and labor groups “to avoid any adverse impacts to the safety of employees and surrounding communities, labor and equipment availability, other market impacts, and cost.”

Newsom vetoed Senate Bill 842, but not before it passed unanimously out of the state Assembly. Only six senators voted against it, including Calabasas Democrat Henry Stern. He told his colleagues on the Senate floor that “creative lawyers” could exploit bill language that seemed counter to the goal of the oil profits bill.

“The point of our oil price-gouging regulations is to have market impacts, is to stop the market from being manipulated,” he said.

In an interview with CalMatters, Bradford said the Legislature lacks the expertise to understand the consequences of its regulations, risking the kind of cost and supply crisis that caused blackouts statewide when the electric power industry was deregulated in 1996.

“The same thing is going to happen with the gas industry,” said Bradford, a former public affairs manager for Southern California Edison. “We don't have experts in this industry … And that's what my bill was about. Simply making sure that those experts who do this job on a daily basis had a voice in and consulted with the commission.”

State Sen. Steven Bradford listens to testimony in a room at the state Capitol.
Rahul Lal
State Sen. Steven Bradford, a Gardena Democrat, listens to testimony during a hearing on Gov. Gavin Newsom's proposal for a windfall profits penalty on oil refiners, at the state Capitol in Sacramento on Feb. 22, 2023.

Bradford at first didn’t deny the bill’s intent was to slow down the regulation.

“There’s some truth to that,” he said, though he later clarified, “We just want to do it right. And that’s all we were doing. Not necessarily slow it down.”

Bradford insists he had the blessing of his Democratic colleagues and the Newsom administration to push the bill through to ensure the safety of workers and communities next to refineries.

“You don’t do a gut-and-amend at the last minute without signoff,” he said.

Newsom’s office declined to comment for this story.

The alliance plays hardball

The politics of the oil profits bill also seemed to impact another oil-friendly legislator, Assemblymember Jasmeet Bains. Bains, a family doctor, was elected in 2022 to a Kern County district that is home to much of California’s oil production. She was the lone Democrat to vote against Newsom’s watered-down oil profits bill.

“Stand alone if you must, but always stand for the truth,” Bains wrote on Twitter after the vote. “As the lone Democrat to oppose the new gas tax, I will never throw my constituents under the bus. I will continue to fight for lower gas prices and a stronger Kern County.”

Newsom’s chief of staff, Dana Williamson, tweeted back, “Alone and confused you shall likely remain.”

Soon afterward, then-Assembly Speaker Anthony Rendon temporarily removed Bains from her assignment on the Business and Professions Committee for siding with Republicans on a procedural vote during the special session.

She may have irked her Democratic colleagues, but sticking up for oil jobs benefited her reelection campaign. The building trades council has since donated $21,800 to her campaign. A spokesperson declined to comment.

The trades council also has been known to punish lawmakers who go too green. One example was when the trades council aggressively targeted former Democratic Assemblymember Cristina Garcia for pushing to include pollution protections for vulnerable communities in California’s cap-and-trade program. The unions opened a campaign account to fundraise for her opponents, and they took out newspaper and television ads attacking her.

“Garcia has been targeting our workers and our jobs,” then-council president Robbie Hunter told its members in a bulletin shared by Garcia’s campaign team. “We in the Building Trades will vigorously oppose her.”

Garcia, who won reelection anyway, declined to discuss the conflict on the record.

Chris Hannan, the new president of the building trades council, doesn’t deny that the council plays hardball with lawmakers. Too many union jobs are at stake, he said.

“If any time we come across as going hard for fighting for our members, you know, it’s true,” Hannan said. “We do come across strong for our membership, because our membership is strong, and that’s what they deserve.”

Hannan insists that the council isn’t trying to block California’s green-energy transition, and the council supports well-paying union jobs in California’s growing green energy sector. But the union commissioned a study in 2020 that said fossil fuel jobs pay about $30,000 more per year than the solar industry — and that a 50% reduction in fossil fuel consumption could eliminate 57,000 jobs.

Hannan, whose council’s 450,000 members include Teamsters, boilermakers and iron and electrical workers, said the oil industry can operate “safer, cleaner and create better jobs here in California than any other place in the world, including any other place in this country. If we’re using the products, you know, we should capture the jobs here in California.”

Petroleum association president Reheis-Boyd said it’s natural for companies and the unions representing their workers to team up to oppose legislation when it aligns against their interests.

“You (can call) it a coalition, an alliance; it’s people coming together to talk about common interests and deciding what to do about them,” she said. “We don’t agree on everything. … But you would imagine that anything that has to do with jobs is going to be a topic of discussion.”

Sen. Gonzalez, whose three bills stalled out this year, said she has nothing against the trades unions. After all, her father was a Teamster, and she co-authored legislation that aims to get more union workers good, high-paying jobs in the green-energy sector. The trades organization has donated $27,800 to Gonzalez’s campaigns since 2014, according to OpenSecrets.

But she said that all too often it feels like oil is winning with the unions’ help in the Legislature. She sees it in the thousands of oil wells pumping away in Southern California and in the pollution that smudges the skyline and fills her constituents’ lungs.

“I see them winning every single day,” Gonzalez said. “So I’m just wondering when California, the greenest state, is actually going to finally put our foot down in a more significant way.”

Gonzalez’s district stretches from the Long Beach ports north to Compton, and it shares a border with Bradford’s. She may have a less friendly view of the oil industry than her neighboring senator, but she used the same gut-and-amend tactic on a bill to start a fight with oil and the trades council. Voters will decide its fate next year.

Five days before the 2022 session adjourned, Gonzalez, at the request of the Democratic leadership,changed a bill on detention centers into one that prohibits new existing oil and gas wells within 3,200 feet of homes, schools, jails and hospitals and adds restrictions on existing wells.

The oil industry and its allies in labor were furious. They said that earlier efforts to pass similar legislation through the regular legislative process failed for a reason: 15,500 existing wells are threatened, and preventing new ones would exacerbate California’s high prices at the pump. Importantly for the trades unions, the restrictions could eliminate jobs for 55,000 high-paid workers in the oil industry, according to the California Independent Petroleum Association.

Opponents of the new law quickly gathered 1 million signatures for a referendum. Voters in November will decide whether to overturn the law that’s on hold pending the results of the initiative. They’re sure to face a barrage of campaign ads, putting the jobs vs. environment fight in the mailboxes of millions of Californians and on their televisions, phones and computer screens.

Groups hoping to keep the law in place say they have internal polling showing California voters siding with them, but it’s no sure bet. Last year, Ventura County voters sided with the oil and gas industry and the building trades unions when they overturned similar restrictions the county board of supervisors had placed on local oil wells that support thousands of jobs. The oil industry raised more than $8 million on the campaign, vastly outspending environmentalists.

Gonzalez is hoping voters don’t overturn her bill, saying it provides protection for impoverished communities in her district. But even she is worried about getting on the labor council’s bad side.

After doing an on-the-record, recorded interview with CalMatters for this story, her spokesperson requested that her remarks not be used if the article would paint the building and trades council in a negative light. CalMatters declined the request.