XPost: alt.global-warming, alt.california, sac.politics   
   XPost: alt.fan.rush-limbaugh   
   From: cocksuckers@sacramento.ca.gov   
      
   California's greenhouse gas reduction law already has shaken up   
   the state's industrial sector, costing it more than $1.5 billion   
   in pollution permit fees.   
      
   It's now poised to hit the pocketbooks of everyday Californians.   
      
   Starting next year, the law will force fuel distributors into   
   the same cap-and-trade marketplace as utilities and major   
   manufacturers.   
      
   The oil industry says it will lead to price increases of at   
   least 12 cents a gallon immediately, while state regulators say   
   any price spikes could vary widely, from barely noticeable to   
   double-digits.   
      
   Anticipating angst at the pump, a leading state lawmaker is   
   raising concerns about the uncertainty of the law's impact on   
   prices for consumer fuels, including gasoline, natural gas,   
   propane and heating oil. Senate President Pro Tem Darrell   
   Steinberg, D-Sacramento, says the state should scrap the plan to   
   put fuel producers under the cap-and-trade provision of the law   
   and instead institute a 15 cent-per-gallon "carbon tax."   
      
   Cap-and-trade sets a limit, or cap, on emissions of heat-   
   trapping gases and requires companies to pay for each ton of   
   pollution they emit, the price of which is determined in an   
   allowance auction.   
      
   Polluters that cut emissions below the cap can sell their   
   leftover pollution permits, called allowances, to companies that   
   need extra.   
      
   The program is a central part of AB32, the greenhouse gas   
   reduction law that passed the Legislature and was signed by   
   former Gov. Arnold Schwarzenegger, a Republican, in 2006.   
      
   But it is just one of several provisions of the law - such as   
   requiring lower-carbon fuels - meant to prompt Californians to   
   change their transportation and energy consumption habits as the   
   state seeks to reduce emissions of heat-trapping gases to 1990   
   levels by 2020.   
      
   The California Air Resources Board, which designed and   
   implemented cap-and-trade, differs with Steinberg's assessment   
   and projects no noticeable increase in gas costs after Jan. 1.   
      
   But the board's own economic analysis of AB32 from 2010 shows   
   that diesel prices could rise from 3 percent to 23 percent, with   
   gasoline prices rising 5 percent to 32 percent, depending on   
   market factors associated with the global warming law's programs.   
      
   The industry and some economic forecasts have predicted a 10- to   
   12-cent increase in the price per gallon at the pump, and   
   Steinberg says those prices could spike as high as 40 cents a   
   gallon.   
      
   Still, Mary Nichols, chairwoman of the Air Resources Board, said   
   oil companies have had since 2010 to prepare and are not   
   required to pass on the costs to consumers.   
      
   "It would appear to be some deliberate measure on their part if   
   there were to be a sudden rise in (fuel) prices on Jan. 1,"   
   Nichols said. "I would expect that they would incorporate the   
   cost of the allowances into their pricing."   
      
   Steinberg's idea of charging a flat tax on carbon - rather than   
   having the price change regularly because of cap and trade   
   auctions - does not force polluters to reduce their emissions,   
   Nichols said, which is key to the state's greenhouse gas law.   
      
   But it does allow for more stable pricing, said Steinberg, a   
   Democrat from Sacramento.   
      
   "Under cap-and-trade, no one can tell us whether fuels will   
   trade at 10 cents or 40 cents a gallon in 2015 or 2016, at any   
   given timing and without a warning. On the other hand, a carbon   
   tax is stable," he said.   
      
   He proposed a 15 cent-a-gallon carbon tax to offset what he said   
   would be the indirect tax on consumer fuels once the companies   
   that produce those fuels go into the cap-and-trade program next   
   year.   
      
   Under his proposal for a flat carbon tax, introduced in the   
   Legislature as SB1156, the tax would rise to 24 cents a gallon   
   by 2020 and more than 40 cents a gallon by 2029.   
      
   About two-thirds of the estimated $3.6 billion raised by   
   Steinberg's carbon tax would go back to households earning less   
   than $75,000 a year in the form of a state-level Earned Income   
   Tax Credit. The rest would go toward mass transit programs with   
   the goal of getting more Californians out of their automobiles.   
      
   The legislative prospects for Steinberg's tax proposal,   
   especially during an election year, are uncertain.   
      
   But the oil industry has greeted his plan warmly.   
      
   Catherine Reheis-Boyd, president of the Western States Petroleum   
   Association, said the cost of cap and trade allowances will add   
   $2 billion to the costs of gasoline and diesel, or about 12   
   cents per gallon.   
      
   The group's oil company members are proposing to continue cap   
   and trade on industrial facilities, but using a set carbon tax   
   on fuels starting in 2015.   
      
   Jay McKeeman, spokesman for the California Independent Oil   
   Marketers Association, disagreed with the assertion by Air   
   Resources Board chairwoman Nichols that the industry could   
   choose to shield consumers from price increases once it entered   
   the cap-and-trade market.   
      
   "That is a bunch of hooey," McKeeman said. "When you're in a   
   competitive market and people are getting assessed a significant   
   amount for participating, (cost increases) get passed on to the   
   customer."   
      
   He said the group preferred a flat carbon tax because it would   
   be a stable amount.   
      
   The law's author, Democratic Sen. Fran Pavley of Agoura Hills,   
   said projections of price spikes are "worst-case scenarios and   
   scare tactics" developed by oil companies that found an unlikely   
   ally in the Senate leader. She said she believes Steinberg wants   
   to use the money raised by a carbon tax to fund tax breaks for   
   low- and middle-income families.   
      
   "Their objective matches very well with Senator Steinberg's, and   
   that is they don't want to be under the cap and they want to   
   pass on the cost to the motorists," she said. "This is like   
   their dream. You've got the Senate pro tem, because of his   
   earned income tax credit, and the oil companies, who see, `God,   
   this is a win-win.'"   
      
   Eric Henry, who lives in the Sacramento suburb of Folsom, said   
   he wasn't in favor of a big spike in gas prices but thought   
   drivers would learn to adapt. He agreed that higher prices are   
   probably needed to force people to be make changes in their   
   consumption.   
      
   "No matter what you say to people, unless they see some kind of   
   effect it's not going to prompt a change in behavior," said   
   Henry, who works in sales.   
      
   Cap-and-trade is designed to moderate price changes, according   
   to the Air Resources Board, but there is never 100 percent   
   certainty that the cost of allowances or other factors could   
   drive gasoline prices up or down.   
      
   Changing to a flat carbon tax now would be too large a task to   
   ensure all of the details would be right by Jan. 1, said Severin   
   Borenstein, a University of California, Berkeley economist who   
   has advised the air board on its cap-and-trade program. Still,   
   he said such a tax could prove useful in the future.   
      
   "I think that California has done a reasonably good job of   
   designing a program that won't have wild fluctuations in   
      
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