“As the largest oil and gas producer headquartered in California, Chevron provides significant economic value to the state through taxes and royalties, investments and job creation,” said Kurt Glaubitz, a company spokesman. “This proposal will hinder our state’s fragile economy, increase business and consumer costs and discourage job creation.”

Local Moratoriums

California residents in some areas are showing increasing hostility to new drilling plans as companies including Occidental Petroleum Corp. seek to tap the state’s vast Monterey shale. The formation, which stretches almost from Los Angeles to San Jose, may hold as many as 15 billion barrels of oil, according to a 2011 report from the U.S. Energy Information Administration.

The city of Carson and Santa Cruz County have temporarily halted drilling, and Los Angeles is weighing a similar proposal. More than 60 other communities in the state are considering such measures, according to CREDO, an activist group sponsoring and tracking petitions for moratoriums. A bill that would halt fracking advanced out of a state Senate committee yesterday.

California Governor Jerry Brown, a Democrat, has introduced new regulations to govern the practice of fracking, in which water, sand and chemicals are shot underground to free oil and natural gas trapped in rock formations.

Starting Debate

The town hall today in San Jose is meant to start a discussion on how funds from a potential extraction tax would be used, said Steyer, who spent millions last year through his political action committee NextGen Climate Action to oppose construction of the Keystone XL pipeline. Keystone XL, still awaiting U.S. approval, would carry crude from Canada’s oil sands to Gulf Coast refineries.

Steyer’s California campaign will first seek to push its initiatives through the state legislature. He declined to say whether he would consider a ballot proposition to force a statewide vote.

“When Californians have voted through elected representatives or direct democracy on this issue, they always reach the same conclusion,” said Tupper Hull, a spokesman for the Western States Petroleum Association in Sacramento. “It’s bad policy for the business climate in California, and bad policy for consumers.”

Thirty states have some form of an oil and gas production tax, including every major producer except California and Pennsylvania, according to the National Conference of State Legislatures. Texas uses its “severance” tax on production, which collected about $4.5 billion in revenue last year, to help fund public education.

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