New wrinkle to environmentalism: Stop building, retain workers, make magic

Posted by Gino DiCaro, Vice President, Communications on July 14, 2009

Recently, Stephen Colbert opined humorously that "Corn plus magic equals gasoline!"   The Contra Costa County Superior Court and environmental plaintiff's quipped similarly last week on a Chevron upgrade and expansion, only it went something like this: "Shut down facility, retain workers, make magic."

A Chevron project that had hired approximately 1,000 temporary Contra Costa Building and Construction Trade workers was ordered to stop construction.  The facility was being upgraded for efficiency -- to make 7 percent more gasoline from the same amount of light to medium crude it was already taking in.  The shut down was absurd on its own, after a 3-year long permit approval process, but it got even more nonsensical when the environmental plaintiff's claimed that Chevron should keep the workers on payroll because the closure was not their fault.  What?  See paragraphs 11 and 13.

So the environmental plaintiffs are asking Chevron to stop a project with demonstrable emission reductions and new efficiencies, retain and pay 1,000 people not working while they go through another long permitting process, all while the city and California lose out on emission reductions and more gasoline.   Only in California.   It's becoming apparent that some just don't want Chevron, period.  That's scary considering the oil and natural gas sector employs 65,000 workers, supports the employment of nearly 305,000 Californians and generates $46 billion in economic output.  Chevron alone employs 10,000 workers and supports 70,000.

This particular upgrade and expansion would mean $50 to $75 million in income to workers and $61 million in community programs to the City of Richmond.  That's before doing the math on all the new net local and state government revenue.  Again this is a project that would have retrofitted an existing facility to use the same amount of crude oil to create more gasoline.  The approved permit explicitly mandated a reduction in baseline greenhouse gas emissions and no processing of heavier crude oil.  California and oil-dependent Richmond can't afford to shut down this project, and no company can pay 1,000 workers not to work.  It didn't work for General Motors in Detroit and it won't work for Chevron in Richmond. 

Everything in California is simply working against the private union workers and their employer.

A different but vaguely similar dynamic has been playing out in the AB 32 global warming policy arena.  California is rushing regulations in a manner that has not been proven to be cost effective for our businesses and consumers.  The regulations are hurried under the assumption that workers and expensive facilities will appear magically once the regs are implemented.  Never mind the inevitable closures, downsizing, re-location and cost increases.

Helping to prove that point this week, the National Federation of Independent Business released a report on Monday that claimed that new California-only global warming regulations will cost each small business $50,000 annually and the state $1.82 billion in output and 1.1 million jobs. 

California, as well as its local municipalities, must drop blatant disregard for real impacts on employers, their workers and our government's revenue streams.  Just do it right, that's all employers, private labor unions and rational environmentalists ask.

There is no "magic" for job creation under the aforementioned circumstances.  Economic reality must be our guide.  Everything is an economy and budget issue now.



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