How oil industry prevails in California Legislature

In a state with a Democratic-supermajority Legislature and a reputation for being a “climate leader,” how does Big Oil get its way?

CalMatters Digital Democracy reporter Ryan Sabalow and data journalist Jeremia Kimelman dive into the curious alliance between oil companies and the powerful State Building and Construction Trades Council. 

The 450,000-member union of Teamsters, boilermakers, iron workers and more has proven a key ally to Big Oil, helping to block several bills opposed by the industry this year. The council has also given big money to California’s labor-friendly Democrats, donating at least $427,000 to the campaigns of California’s legislators in 2023 and more than $3.5 million to legislative campaigns since 2019. 

Many of the union concerns surrounding these bills relate to jobs. A 2020 study that was commissioned by the council found that fossil fuel jobs pay about $30,000 more per year than the solar industry, and that a 50% reduction in fossil fuel consumption could eliminate 57,000 jobs.

That concern is shared by the oil industry.

• Catherine Reheis-Boyd, president of the Western States Petroleum Association: “You (can call) it a coalition, an alliance; it’s people coming together to talk about common interests and deciding what to do about them. We don’t agree on everything…. But you would imagine that anything that has to do with jobs is going to be a topic of discussion.”

Interviews and analysis conducted by Ryan and Jeremia revealed that during the 2023 legislative session, half of the 20-some bills opposed by the oil industry were also opposed by the building trades union.

Among them were three measures by Sen. Lena Gonzalez that were ultimately stalled or killed: Senate Bill 252, which would have required two state pension funds to divest from fossil fuels and is now a tw0-year bill; SB 556, which would have made oil and gas companies liable for healthcare expenses related to respiratory illnesses; and SB 674 to create a statewide standard for petroleum refinery air monitoring systems.

Though the Long Beach Democrat said she has nothing against the trades unions (and the union has donated $27,800 to her campaigns since 2014), Gonzalez also said the oil industry wins with the union’s help: “I see them winning every single day. So I’m just wondering when California, the greenest state, is actually going to finally put our foot down in a more significant way.”

Then there was SB 842. Originally a measure on homelessness, it later morphed into a bill that would have required the California Energy Commission’s new watchdog division on oil prices to consult with oil industry stakeholders and labor groups “to avoid any adverse impacts.” That bill was authored by Democratic Sen. Steven Bradford of Inglewood, whose campaigns received more than $680,000 from the trades unions and at least $155,000 from the oil and gas industry since 2006, according to a CalMatters analysis. The bill was ultimately vetoed by Gov. Gavin Newsom.

For the union president Chris Hannan, the alliance with the oil industry shouldn’t be a surprise given that hundreds of thousands of jobs are on the line.

• Hannan: “If any time we come across as going hard for fighting for our members, you know, it’s true. We do come across strong for our membership, because our membership is strong, and that’s what they deserve.”

Reminder: When the oil and other industries don’t win in the Legislature, they often go to the ballot. Oil companies have already qualified for the November 2024 ballot a referendum to overturn a law (authored by Gonzalez) that requires setbacks of oil wells near homes and schools. Oil companies have poured tens of millions of dollars into killing the law, stalling any implementation of the policy in the meantime. 

For more about Big Oil and the trades union, read Ryan and Jeremia’s story.

Homelessness is a big concern for Californians, and the latest numbers spotlight why.

The state’s homeless population has increased by nearly 6% from 2022, to 181,399, according to the latest federal figures. More than two-thirds of the homeless individuals are on the streets. Nationwide, the number is up 12% to about 653,000, the most since the point-in-time count started in 2007. 

As CalMatters housing reporter Ben Christopher explains in the latest CalMatters year-in-review summary, the homelessness crisis became even more dire in many parts of California in 2023. The primary reason: The steady rise in home prices and rents that is making housing even more unaffordable. 

The lack of progress despite billions of dollars in spending has Newsom and many progressive lawmakers willing to consider clearing encampments and penalizing local governments for inaction, while promoting “tiny homes” as one solution, Ben reports. Meanwhile, others are looking to Texas for possible answers. 

More on homelessness: Soaring housing prices aside, California faces another challenge because of limits put on local governments to clear homeless encampments. This stems from a 2018 decision by the 9th U.S. Circuit Court of Appeals, which ruled that it’s cruel and unusual punishment to evict homeless people from public spaces when they lack “access to adequate temporary shelter.” After declining to hear the case in 2019, the Supreme Court may consider the issue next year.

Since then, several other local battles over the right to clear encampments have taken place inside courtrooms. On Friday, for example, a federal judge granted a request to halt the city of Berkely from clearing an encampment located near a UC Berkeley student housing community. And while some homelessness programs have helped many individuals from returning to the streets, neighborhood groups are often hesitant to expand these services in their areas — such as the ones currently opposing what may become San Diego’s largest homeless shelter near the city’s international airport.

Huntington Beach has become a center of a conservative backlash against California progressivism, and especially anything resembling “woke” politics. 

As CalMatters Capitol reporter Alexei Koseff detailed recently, the new majority on the Huntington Beach City Council quickly stopped displaying the rainbow flag during gay pride month, dissolved an anti-hate commission and moved to create a review panel for library books for sexual content. 

Those council members, led by current Mayor Gracey Van Der Mark, aren’t done. 

Today, they’re urging the council to consider a proposal to replace ethnic heritage months with a 12-month series of programs to honor the beach city’s history. The suggestions include a month to honor the city’s founders, another on its railroad history, one on its surfing fame, another to celebrate aviation and one to pay tribute to the discovery of oil in 1920.

“This series would be intended to be free of any identity politics or political agendas,” according to the proposal.

Update: The council approved the proposal on Dec. 19, but on Dec. 22, city officials said Black History Month, Women’s History Month and others would be observed in 2024 after all.

There has been a counter-backlash to some actions by Van Der Mark and others. With this proposal, state Sen. Dave Min (who, it should be noted, is running for Congress in 2024) is accusing the council of a “disgraceful departure” from embracing diversity.

• Min, in a statement: “At a time when too many communities, especially in Huntington Beach, are feeling under attack, this proposal to try to cancel Black History Month, Women’s History Month, Asian American and Pacific Islander Heritage Month, Hispanic Heritage Month, Pride Month, and other heritage celebrations — and replace them with a whitewashed revisionist history that unabashedly lionizes Big Oil and indulges in Civil War nostalgia — is embarrassing and shameful.”

Will there be an economic recession or not? And what would that do to the state budget, already projected to be $68 billion in the red next year?

CalMatters economy reporter Levi Sumagaysay writes that tech industry layoffs and a slowdown in start-ups could weigh down the state’s bottom line — as could more people leaving California due to the high cost of living for housing, plus auto insurance premiums and home insurance policies, especially in wildfire zones.

On the state budget, CalMatters’ Mikhail Zinshteyn points out that with the estimated $68 billion hole, billions of dollars in planned spending could be delayed or slashed. Pressure will be on the governor and legislators to find the money. That could include dipping into the state’s reserves, or even through taxes, such as the corporate rate increases the Senate sought in 2023 but that Newsom shot down. 

Republicans, meanwhile, are calling for a special session, saying that the spending freeze ordered by Newsom isn’t enough. It doesn’t appear a special session is going to happen: Newsom left the state for a family vacation the rest of this week.

As part of CalMatters’ year in review summaries, Levi and Mikhail also look back at what happened in 2023. Read the economy one here and the budget one here.