Interesting comments from Clinton on the economics and risk issues behind Prop 87

Now, I know the oil companies have trotted out some economists in their ads. But let me ask you something: If they really thought you were going to pay for this, would they be spending all that money trying to convince you to vote against it? You need to know that California is the only state in America without any kind of extraction fee on its natural resources on oil.

I like that. Well said.

I come from a state, Arkansas, where we had an oil and gas severance tax. It never makes any difference in the price. It’s set in the market. There are plenty of states with very, very high severance taxes, much higher than Prop 87 would impose here, that have less expensive gasoline. Believe me, this — all this campaign is a ruse. This is designed to slow down America’s transformation to a clean, independent, energy economy.

And I want you to think about it, all of you students, not just from the point of view of climate change, but also our national security. Aren’t you tired of financing both ends of the war on terror? And think about — think about it from the point of view of our economic security. We are now in a period for the first time ever when we’ve had five years of economic growth, a 40-year high in corporate profits, five years of increasing worker productivity. So the people who are working for us are doing a better job every year, and yet wages are stagnant, poverty is going up among the working poor, and the people without health insurance that are working and their children are increasing.

Now, why is that? That is because we have not found this generation’s new jobs.

True enough. The economy is being stifled by giant fat companies who fear innovation and threats to their strangle-hold on margins. But even more pointedly:

And I cannot tell you how strongly I feel about this. The argument that this is going to raise your gas prices is just bogus. It’s not so. All my public career before I become president — and I’ll say it again — was spent in a state that used to have a lot of oil, still has a lot of natural gas. Nobody in the whole wide world ever thought that measly little extraction tax we had had anything to do with the price people paid for their natural gas or their gasoline. No one. The only way they can even put these ads up and make this argument is that you never had it, so you don’t know. Take it from me. I’ve been there. I lived in a place that had it. It will not make a difference to the price, but it will make all the difference in your future. All the difference in your future.

Tough words from a guy who lied under oath. Despite his past personal issues, it is easy to see that he is 100% right about the economics and risk of Prop 87.

Oh, and I also read an article about Gore’s speech on this topic, but more interesting to me is the anti-Prop 87 statement in that same article:

“When you look at what’s in there, it’s clear to see what harm it would do and it’s totally unclear there would be a benefit,” DeLuca said. “There’s no guarantee that at the end of all this … we’d see anything for the $4 billion.”

Clear harm? I’m afraid I do not follow. What “harm” is there from taxing companies who are extracting natural resources? A decrease in production? That is about as likely as finding WMDs in Iraq. There is no clear “harm” to the taxes. In fact, the second part of DeLuca’s argument gives this away when he reveals his weak grasp of risk management. Do the oil companies only drill when oil discovery is guaranteed? No, they blow hundreds of millions of dollars on prospecting and research. Now, imagine if they made the same/similar investment in another potential source of energy…they might not find the biggest discovery in history, but even a few minor successes would go a long way towards the goal of reduced emissions, new jobs, and independence from petroleum.