Xblog

One of the best ways to get a proposition supported in California is to have George W. Bush go against something that Californians think should be addressed by the federal government, and then put in something that addresses the matter at a state level. This puts voters in this terribly quandary of having to support a state solution to what they feel is a federal problem or having to give Bush ammunition along the lines of “even California agrees with me”.

I find it helpful in such cases to ignore the larger context and focus on the specifics of the measure. There’s a lot to worry about here. For starters, there is this silly provision in the proposition that says that oil companies can’t pass on the increased costs to their customers. How the heck is that supposed to work? What kind of bizarro world do you have to live in to effectively legislate losses in to businesses? Well, it helps if oil companies are making huge profits right now, but of course the day will come when they aren’t, and then what will happen?

Then there’s the fun matter of even the impartial legislative analyst not being clear as to what the proposition means (and on important stuff like how much to charge as a severance tax). Even if this bill passes, you can anticipate years of court battles over this, which will cost California and oil companies a pretty penny without making any progress.

Then there’s the silly slogan about this proposition reducing our dependence on foreign oil (economics 101: if you pass a proposition that increases the costs of domestic production of a product while not impacting foreign production, will that increase or decrease the use of foreign production?). There’s a not too subtle implication that this will help get us unentangled from the middle east. I’ve got news for you: most of California’s “foreign” oil comes from within the US, Mexico and Canada. The middle east factors in mostly in that their supply levels effect the prices from our primary sources.

I like the notion of encouraging alternative energy initiatives. Given the strategic importance of energy, I think it even makes sense to fund some initiatives from out of government coffers. It just seems to me that given the purported goals of this bill, it’d make more sense if we were to slap import duties or additional transportation fees on oil imports, rather than on local oil production. As it is, California’s local supply of oil is very precariously positioned against demand, so much so that minor bumps in the supply lines cause major shifts in fuel prices, which is very disruptive to the economy.

Sorry Bill, I think I’m going to give this one a pass.