Billionaire environmentalist Tom Steyer is lobbying for a new law in California that would force energy companies to share as much as $2 billion of the state’s oil wealth with residents.
The proceeds would come from an “extraction tax” -- fees producers would pay on their crude oil output. Similar taxes already exist in most major drilling states such as Texas and North Dakota, with California a longtime holdout.
The tax might be used to pay a dividend directly to California residents, such as the one paid to Alaskans from that state’s oil revenue, according to a proposal Steyer will unveil today in a town hall meeting in San Jose. It might also be used to fund savings accounts for newborns or middle class tax cuts. A 9.9 percent per barrel tax on California oil production would yield $1.5 billion to $2 billion annually, Steyer estimates.
The former hedge fund manager, who has pledged to raise and spend as much as $100 million on climate-related political advocacy this year, is focusing on drilling in California. Steyer’s campaign is poised to galvanize opposition to the oil industry as the state weighs the costs and benefits of accelerated drilling in the largest undeveloped crude formation in the U.S.
“We’re trying to do a grassroots campaign here,” Steyer said in an interview. “We’re trying to engage the people of California on this in a way that could make a difference.”
Steyer has been an active force in California politics, successfully backing a 2012 proposition to close a corporate tax loophole and a 2010 proposition that would have undercut state laws aimed at reducing greenhouse gas emissions.
His newest “Fair Shake” campaign includes a proposal to ban the drilling technique called hydraulic fracturing, or fracking, unless two-thirds of a county’s residents vote to approve it.
The energy industry has beaten back previous efforts to introduce a production tax in California, most notably in 2006 when a proposition backed by Hollywood producer Steve Bing was defeated by more than 700,000 votes.
That campaign was among the most expensive in state history, with both sides spending more than $140 million, according to the Institute of Governmental Studies at the University of California at Berkeley. Chevron Corp. spent more than $30 million to defeat the proposal.