This is a rather sharp counter to the multi-million dollar campaign led by Chevron to kill Proposition 87 in California:

The full page New York Times ad run yesterday by your national political operation — the American Petroleum Institute — highlighted a messaging problem within your California campaign against Proposition 87. The ad stated: “… the global price of crude oil is the single most important factor in what you pay for fuel at the pump.” (Please see the full text of this ad, which I have attached.)

As a professional, I feel compelled to inform you that your California agents are taking your money and taking you for a ride.

The oil companies’ top flack in California, Chamber CEO Alan Zaremberg, has been saying Proposition 87 will increase gas prices at the pump. But according to the API “the global price of crude oil is the single most important factor in what you pay for fuel at the pump,” not local fees like the ones already charged in Alaska, Louisiana and Texas. Zaremberg is clearly off message and is clearly disregarding the oil industry’s talking points.

Zaremberg should be doing a better job in exchange for the $345,000 your industry has recently given to Chamber PACs. And he should remember who he works for: the California Chamber Board, on which Shell, Chevron, and Aera Energy, the Exxon/Shell joint venture, hold seats. In fact, the Immediate Past Chair of the Chamber is Aera’s CEO.

You might as well replace Zaremberg with Jack Coffey, who is currently a lobbyist for Chevron.

He at least was telling the truth when he summed up your position against Proposition 87 to the LA Times by saying:

“This is worth a lot of money to us.”

I urge you to make Mr. Coffey an offer without delay.

The level of corruption today in American politics, especially from the lure of petroleum companies, is said to be at an all time high (a tall order, given the infamous Harding and Grant administrations), but also disturbing is how these companies try to stoke fear in consumers by spreading disinformation about the economics of petroleum.

Edited to add (9/28/06):

I’ve noticed this post is getting a lot of traffic, even though I only provided an excerpt and a link to other sources. Some have even grouped me in with the “one-sided” list of pro-87 sites.

What I have found, essentially, is that people are intent on discussing the future cost of CA gasoline as though it is the most important consideration. In other words, some are trying to distill this measure down to a question of whether you are for or against higher prices at the pump. I find this disturbing as such a lopsided risk model has very dangerous consequences.

If we care only about the cash we hand over at the pump, and not other things at risk such as our health and welfare, then the business model for big oil is clear — manipulate pump costs with disregard for other factors.

The consequences of this are dangerous because this actually might be exactly what some consumers want. They would gladly have cheap gas at the cost of people being killed or maimed abroad or even at home.

Anyone who believes in obtaining the absolute maximum best for themselves while feeling little or no responsibility towards others (and expects everyone else to act this way) is not going to make intentionally good decisions for the majority of people. Beware the extremists who claim they are center-right or even centrists in the political spectrum and thus advocating for improvements to the general welfare, when they are not. They will make decisions that are good only for those who share their extreme minority views.

And so, with Prop 87, you find a number of extremists coming forward to say “hey, don’t touch my gas prices!”. Compare that to the ruling this week by a U.S. District Judge that the Department of Interior’s Bureau of Land Management (BLM) failed to consider the cumulative environmental impact of widespread oil and gas drilling (e.g. the big picture of risk) in the National Petroleum Reserve, Alaska (NPRA). The judge rejected the BLM’s decision and sent the matter back to the agency for further analysis.

The difference in perspective might be best explained with food as an analogy. Would someone pay $1 for a burger instead of $2, if they were told that by paying $1 today they would have to pay $50 for that same burger five years from now to survive? In other words, would they be willing to make a small investment now in order to maintain a relatively flat cost of living adjustment versus face a crisis? Before you answer, extremists would try to divert the argument away from a yes or no and instead ask whether anyone should ever trust a government to invest money wisely. Their position on this issue is that you should only give your hard-earned money to the oil companies, because in some weird way they think that oil companies will be more fair, more representative and more in tune with your interests than your elected representatives.

The foundation of California Prop 87 is the economics of risk. We know that the oil companies have been given tax breaks and therefore extra margins in California. And we know that they are not using their record profits to create an alternative energy market. Many see this as mismanagement of the resources they are allowed to refine. Some see this as their discretion to do as they please. The question is whether they should continue to get giant tax breaks or should taxes be applied, just like in every other state, in order for the state to allocate funds towards new technology and emerging energy markets that will lower the future cost of living from a broad perspective.

Choose your risks and manage them wisely.

Jeff Vail puts forward a compelling, albeit rather limited in scope, “Energy Theory of Value and the EROI of Alternative Energy“.

The problem with analysis like this, as one of his commentators pointed out, is that it does not account for the larger impact of shifting to alternative methods of producing energy, let alone new sources. In other words, if you can fuel your conversion system with waste or by-products then you are essentially performing a clean-up operation. Ethanol has this capability, as does bio-diesel. In fact, bio-diesel could be seen primarily as a recyling process that generates a new fuel source from extant waste.

I also must make the point that new forms of energy may involve significantly more efficient engines and technology that is less centralized and therefore more resiliant. Diesel is known to run longer and require less maintenance than gasoline, so the total energy formula can actually show that alternative energies have a higher ROI, as Rudolf Diesel himself predicted.

Governor Arnold Schwarzenegger is on the campaign trail. Actually, he has a giant 40-foot recreational vehicle (RV) on the campaign trail that he is using to offer photo opportunities. His campaign stands for three things, as far as I can tell from the website:

1. Fame
2. Protection
3. Consumption

I do not say this lightly, I am just trying to point out what the marketing effect is of a giant inefficient engine driving around the state and a website that says “Protecting…” on every page.

1) The fame message is obvious. Can’t underestimate the effect of a famous actor with a pleasant persona offering folks a photo-opportunity.

2) I have to admit from a security perspective the overwhelming use of a “protection” theme is a little disturbing. Is the idea to promote a message like “Anything you are afraid of, Arnold can protect you”? Seems plausable, given the image he has cultivated from the type of movies he has appeared in and the roles he usually plays (e.g. other than the ones opposite DeVito). Wonder if he will step down off the bus carrying a giant broad-sword or a 50 caliber machine-gun? “I will protect your dream!”

3) Seriously, though, with regard to consumption a quick review of the vehicle he is promoting led me to the rvforsaleguide.com site, which really puts Arnold’s campaign style in perspective:

most expensive per lineal foot of the factory built choices. Many new ones get less than 7 mpg, and 10+ year old units may not even get 5 mpg.

Surely he is driving a new one. Perhaps compared to a fleet of Hummers a single 40-foot RV is economical, but less than 7 mpg still seems rather crude as a campaign message given the bitter history of electric cars and alternative fuel in California. The bus is green, but is it green, if you know what I mean? Maybe it was painted green as a deliberate snub to environmentalists or to give it the appearance of concern about the environment without need for reality.

Arnold’s campaign says his aim is “Protecting the California Dream”, but to me this RV represents more of a late 1990s Texas or Detroit dream. Where is the hybrid technology or alternative fuel source? In other words if the dream is to build giant heavy buses that consume excessive amounts of petroleum then I am sure Ford, Firestone and companies like Bayoil have some campaign contributions headed his way.

Shame the JoinArnold campaign did not have the foresight to run the bus on alternative energy, since that might show some vision or more consistency with the “dream” theme. Instead, they are just pushing more hype and hypocricy, and that is hardly the stuff dreams are really made of.

Incidentally, Arnold’s RV is also a rather sad contrast to the famous green bus of the late US Senator Paul Wellstone. And that bus is apparently still being used, according to Wellstone Action:

The vintage green school bus, long a campaign fixture for the late Sen. Paul Wellstone, becomes training tool for progressive action Saturday in Bemidji.