Referendum process now being used by wealthy
Union Tribune: July 27, 2008, Dean Calbreath
When California's reform-minded Gov. Hiram Johnson launched the
referendum process in 1911, his idea was to give common citizens more
of a voice in setting state policy.
If citizens couldn't afford to hire lobbyists in
Sacramento, at least they could band together in petition drives to put
their proposals onto the ballot. Or so the argument went.
But thanks to the mounting cost of statewide
political campaigns, the referendum process has increasingly become a
vehicle for wealthy individuals or major corporations to sidestep the
legislative process and push for pet projects that sometimes provide
hidden benefits for the authors.
And so, on the ballot this November, one of the
richest men in the world is backing an initiative aimed at getting
drivers in the state to shift away from gasoline to other fuels,
notably natural gas.
Perhaps not coincidentally, the chief proponent
of the idea is the nation's largest supplier of transportation-related
natural gas: T. Boone Pickens, a multibillionaire who ranks as the
world's 369th-richest person.
Pickens, 80, once a wheeler-dealer in the oil
market, more recently has been focusing on wind power and natural gas,
and he hopes the state and nation will do the same.
Warning that the United States is too dependent
on foreign oil, he has been taking out TV commercials and lobbying
politicians to shift away from petroleum to wind-powered electricity
and natural gas-powered vehicles.
Nationwide, his Pickens Plan would push the
federal government to help private industry build a $1.2 trillion
network of windmills – similar to windmills he already is building in
Texas – to provide electricity.
Using wind power instead of natural gas for
electricity, he says, would allow drivers to start fueling their cars
with natural gas – similar to that sold by his Clean Energy Fuels Corp.
in California – rather than gasoline.
“I want a federal mandate that any new vehicles
should go on natural gas,” Pickens said during a question-and-answer
meeting with The San Diego Union-Tribune editorial board,
attended by editors and reporters from the newsroom. The board
regularly invites newsmakers to discuss current events.
In California, Pickens is behind the campaign
for Proposition 10, which would provide subsidies for alternative fuels
– with a strong tilt toward natural gas.
The literature for Prop. 10 says it is backed by
“a coalition of renewable energy and alternative fuel companies.” But
the only known contributor to this “coalition” is Clean Energy Fuels
Corp. – formerly known as Pickens Fuels Corp. – which has kicked in
$3.25 million to support the proposal.
The bill would authorize $5 billion in
state-funded bonds to support research and development projects in
alternative energy as well as rebates to vehicles using alternative
fuels.
According to the state fiscal analysis office,
Proposition 10 would cost taxpayers roughly $325 million per year for
the next 30 years to finance the bonds, as well as $10 million a year
over the next decade for administrative costs.
Critics note that Proposition 10 promotes
natural gas over gasoline-electric hybrids, a cleaner and cheaper
technology that is already making inroads into the marketplace.
Proposition 10 would offer up to $50,000 in rebates to vehicles fueled
by natural gas, but far less to hybrids.
Judy Dugan, an energy specialist with Consumer
Watchdog in Santa Monica, said the only hybrid that meets the
qualifications specified by the referendum is the Toyota Prius, which
could gain a $2,000 rebate. Rebates for natural gas cars, Dugan said,
would start at $10,000.
“On the basis of market distortion alone, this
is crazy,” Dugan said. “There's already a federal subsidy for natural
gas vehicles, which Pickens is lobbying to be continued through 2018.”
Michael Shames, who heads San Diego's Utilities
Consumers' Action Network, adds that a shift to natural gas would be
“problematic in a lot of ways.” Shames, who once owned several
natural-gas vehicles, said few mechanics know how to fix natural-gas
engines and few filling stations offer natural gas.
On the other hand, a government-mandated,
taxpayer-supported shift to natural gas would undoubtedly bring needed
business to Clean Energy Fuels Corp.
Clean Energy is a relatively small company, with
about 170 stations in the United States and Canada servicing 14,000
vehicles, mostly trucks and buses. Its revenue last year was $118
million, less than 4 percent of Pickens' net worth. The company lost $9
million last year, compared with a $78 million loss the year before.
Clean Energy's shareholders apparently believe
that government mandates could help. Since Pickens started promoting
his energy plan this month, the company's stock price – which had been
slumping since May – has jumped more than 20 percent to $12.88.
“His stock has risen by $100 million,” Dugan
said. “That's more than twice the amount he's spending on his ads (for
the Pickens Plan).”
Pickens isn't the only multibillionaire with an energy plan on the ballot.
Also on the ballot this November is Proposition
7, a proposal almost wholly backed by Arizona multibillionaire Peter
Sperling, ranked by Forbes magazine as the 799th-richest person in the world.
Sperling has no apparent vested interest in the
proposal. His wealth comes from his connection to Phoenix University,
founded by his multibillionaire father John Sperling. His proposition,
which requires the state to get 50 percent of its power from renewable
sources, has won endorsements from a couple of environmental activists,
such as the chairs of the Rainforest Action Network and the Oceanic
Society.
But a number of major environmental groups,
including the National Resources Defense Council and the California
League of Conservation Voters, have joined with the state's largest
utilities – Pacific Gas & Electric, Southern California Edison and
Sempra Energy – to oppose the proposition.
The critics complain that the proposal is
seriously flawed, especially because it locks the state into existing
technologies and requires a two-thirds vote of the Legislature to alter
it. Nobody has done a study to see if it is feasible to conduct such a
dramatic shift to renewables.
Shames, who opposes Proposition 7, said both
propositions share the same flaw: Because they only depend on one
person – whether Pickens or Sperling – they lack the vetting that would
come from having input of a wider variety of sources.
“A well-intentioned individual with an excessive
amount of money doesn't necessarily have the capacity to present a
comprehensive policy initiative on a complex topic,” he said. “That
takes a broader cross-section of the public.”
That's an idea that Hiram Johnson would undoubtedly agree with.
Dean Calbreath: (619) 293-1891; dean.calbreath @ uniontrib.com
