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The Sunday Times: Celebrities join the battle over California fuel tax

EXTRACT: The No campaign is, unsurprisingly, led by oil companies such as Shell, Chevron and Exxon/Mobil.

THE ARTICLE

November 05, 2006

A referendum over weaning Americans off their dependence on oil has divided the state, reports William Kay from Pasadena 
 
BILL CLINTON adopts his most sincere expression as he prepares to deliver the punchline of an advertisement showing on American television. “If Brazil can do it,” he says, “so can California.”

The former president isn’t talking about California winning the World Cup or growing coffee. In a patronising tone, he is pointing out that even Brazil has ended its dependence on foreign oil by switching to ethanol made from its own crops. 
 
It is part of a fight that is threatening to overshadow Tuesday’s mid-term congressional election.
Electors are voting on a plan to tax all oil in California and use the revenue to fund research into alternative energy.

Normally, this is the kind of green dream that would be dismissed as a wacky sideshow to the main vote, which will determine whether President George Bush has a Republican Congress to support him during his last two years in the Oval Office.

But the mini-referendum officially entitled Proposition 87 is far from normal. For a start, California’s economy is big enough to put it in the world’s top 10 if it were an independent nation. And it is the fourth-largest oil-producing American state after Louisiana, Texas and Alaska, as well as being the biggest consumer of petrol and jet fuel.

The stakes are high. If Proposition 87 is approved, it will be seen as setting a precedent for the rest of America. Although some other states have similar taxes, none has become law after such a hard-fought and high-profile battle. Equally, if the measure is rejected it will strengthen Bush’s view that, when push comes to shove, the American people do not want dearer energy.

The rival campaigns for and against Prop 87, as it is known, have raised a combined $100m (£52m) compared with the $250m Bush spent on his 2004 re-election.

The No campaign is, unsurprisingly, led by oil companies such as Shell, Chevron and Exxon/Mobil. They are backed by the California governor Arnold Schwarzenegger, who is against tax increases on principle, despite his public support for the environment.

The former film star, who looks certain to be re-elected on Tuesday, has been campaigning for another proposition on the ballot, No 84, a $5.4 billion collection of water and conservation measures. In September, with praise from Tony Blair, he signed a law imposing America’s first cap on greenhouse-gas emissions; and last week he wrote to Bush to complain that the president had ignored his plea to let him toughen California’s vehicle-exhaust standards.

Not that his green credentials stop Schwarzenegger owning five Humvees, the 15ft by 7ft jeeps that guzzle a gallon of petrol every 10 miles or so.

Even without his ambivalence, the No camp has an uphill struggle to grab the headlines from the glittering names ranged behind the Yes side: Clinton and his vice-president Al Gore, Oscar winners Julia Roberts — who visited child asthma sufferers to highlight the harm caused by air pollution — James Caan and Geena Davis and Google co-founder Larry Page.

Their main funding comes from Steve Bing, the film producer, father of Elizabeth Hurley’s four-year-old son Damian and committed environmentalist, who has contributed $40m so far. Much of that has gone on Clinton’s television ad and another by Gore.

The Yes lobby shamelessly appeals to patriotism too. California imports 42% of its oil, most of it from the Middle East. Supporters of the proposed tax say it will reduce state dependence on crude-oil imports through the development of alternative-energy sources. So they portray the initiative as striking a blow in the war on terror.

The No campaign is much more straightforward, arguing that the measure would increase bureaucracy and raise the price of fuel. The new law would specifically forbid fuel producers from passing on the tax to consumers, but it is widely believed that this would be very difficult to police.

However, even though the No campaign is fighting on a more pedestrian platform and lacks its opponents’ glamour, it has been gathering support. When the campaign began in the summer, the polls had voters in favour of Prop 87 by 52% to 31%, with 17% undecided. But it appears that most of the waverers have swung behind the opposition.

And the falling oil price, which has been faithfully reflected at the pumps with reductions from $3 a gallon to $2.29 in California, is believed to be one reason for the growing opposition to Prop 87, together with the conviction that the oil companies will find ways of passing on the tax to motorists.

If it passes, the tax would be levied from January at between 1.5% and 6%, depending on the crude oil price. It would raise between $225m and $485m a year, to be spent on alternative energy development.

The vote is expected to be close — and the result will be closely watched. Where California leads, the rest of America often follows.
 
http://www.timesonline.co.uk/article/0,,2095-2437477.html

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