California Cleantech Attacked by Prop 23

California is World’s Third Biggest Oil Consumer

Over 95 percent of California transportation is fueled by petroleum. Electric light-rail, CNG buses and trucks, ethanol blended in gasoline make up the rest. No other state is more addicted to oil. By comparison, only two nations use more oil – China and the United States. California uses more oil than India, Japan, or Germany.

California wants to be more energy secure, have cleaner skies, lower healthcare costs for asthma, and reduce its own contribution to the global warming that threatens water shortage and failed crops. In 2006, a Republican Governor signed the nation’s most comprehensive climate legislation, AB32, shaped by both parties in the State Assembly and Senate. The law would increase refinery costs and encourage a reduced use of petroleum.

California’s efficiency and climate solutions are creating over a million cleantech related jobs as use of fossil fuel declines. According to recent scenario’s from the California Energy Commission, “Between 2007 and 2030, staff estimates total annual gasoline consumption in California to fall 13.3 percent in the low-demand case to 13.57 billion gallons, largely as a result of high fuel prices, efficiency gains, and competing fuel technologies. In the high-demand case, the recovering economy and lower relative prices lead to a gasoline demand peak in 2014 of 16.40 billion gallons before consumption falls to a 2030 level of 14.32 billion gallons, 8.5 percent below 2007 levels. CEC Report

Reducing the use of petroleum, of course, would cost oil companies billions. Texas oil companies are buying TV ads to encourage Californians to vote “yes” for Proposition 23 this November. The proposition would require the State to abandon implementation of a comprehensive greenhouse-gas-reduction program that includes increased renewable energy and cleaner fuel requirements, and mandatory emission reporting and fee requirements for major polluters such as power plants and oil refineries, until suspension is lifted.”

Prop 23’s biggest backers, Valero and Tesoro, are responsible for 16.7% of California’s emissions, according to the California League of Conservation Voters. Prop 23 will allow California oil refineries to avoid paying over one billion dollars for carbon emissions. Prop 23 is promoted as a jobs creation, but it’s a job killer. A recent UC study reported that California’s successful efforts to become cleaner have already created 1.5 million jobs with a total payroll of over $45 billion.

California leads the nation with 25,000 electric cars on the road and thousands of new electric charge stations scheduled for installation. By the end of the decade, California could have a million electric cars on the road. California’s Electric Transportation Report

66 leading investors representing $400 billion oppose proposition 23 as harmful to jobs and investment

Proposition 23’s opponents include 66 asset managers, venture capitalists and other investors collectively managing over $410 billion who issued a joint statement today opposing Proposition 23, the statewide ballot initiative to stop implementation of the state’s landmark clean energy law, AB 32.

Tesla electric cars, Better Place, and Bright Source Energy would not have achieved their success without the investment and guidance of VantagePoint Venture Partners, who has invested $1.5 billion in a portfolio of over 25 leading clean technology companies. Vantage CEO, Alan Salzman, sees a trillion dollar future in clean transportation, energy, water, lighting, and materials. On today’s conference call he stated, “We don’t want our cleantech future high-jacked. Is California going to stay in the game, or cede to China, India, and Russia?”

The oil industry attack on California carbon pricing will not stop cleantech, but it may stop the next 500,000 cleantech jobs from being in California. At stake is whether the next Google or Tesla is in the U.S., or in some other country. When asked whether putting a price on carbon would cost consumer’s money, Salzman responded, “This is about using technology to modernize ancient technology, such as the light-bulb. “ He sited that new LED only uses 15 percent of energy of old bulbs. We have cheaper and better technology. Flat screens that cost $15,000, now cost $400 due to learning curve and scale.

Kevin Parker, Deutsche Bank Climate Change Advisers has over $1.5 billion of their $8 billion invested in cleantech. He stated that a billion dollar wind or solar project only happens when investors or lenders have TLC– transparency, longevity, and certainty. A predictable price on carbon could make the next utility scale wind farm a good investment. No TLC, no renewable energy, no thousands of jobs – only consumers stuck with coal and gas generated electricity. If Prop 23 is defeated, major clean energy projects can move forward. He sees the stakes being much bigger than California. With our failure to support clean energy in the U.S. Senate, other states will either follow California’s cleantech lead, or they will give up on climate legislation. The U.S. will fall behind other nations, unless investors have reason to invest in U.S. cleantech.

Chris Davis, a director of Ceres and director of the Investor Network on Climate Risk, a network of 90 investors with assets exceeding $9 trillion focused on the business impacts of climate change agreed that investors could easily move money and jobs globally. He stated, “Cleantech is a major economic engine. Trying to repeal the future will not get us there.”

The U.S. can win or lose in a future that includes energy efficient materials, LED lights,electric cars, high-speed rail, wind power, solar power, smart grids and smart apps. If Californian’s defeat Prop 23 on November 2, Texas may be a few hundred jobs lighter and California a few hundred thousand jobs richer. California Cleantech Jobs

Cleantech Boosts Jobs in Specific Regions and Segments

By John Addison (10/7/10)

Energy efficiency, renewable energy, and information technology are all helping the U.S. overcome a severe recession and keep more people from losing their jobs. From our San Francisco roof deck, I am encouraged to see energy efficient homes, solar roofs, and electric buses gliding by. I am also discouraged to see massive ships from Asia sail into the harbor ladened with hundreds of rail cars full of Asian goods, then leave for distant customers with much lighter loads.

As trillion dollar industries are disrupted, he stakes are high for jobs and economies. The U.S. can win or lose in a future that includes energy efficient materials, LED lights, electric cars, high-speed rail, wind power, solar power, smart grids and smart apps.

Clean Tech Job Trends 2010 Details U.S. Growth

As the economy officially pulls out of The Great Recession, clean energy continues to fuel the plans of many cities, states, nations, investors, and companies as they look for the next wave of innovation and growth. In its second annual look at the state of clean-tech jobs in the U.S. and globally, Clean Edge published its Clean Tech Job Trends 2010. The report looks beyond green job evangelism to provide key insights and a sober analysis of the most important employment trends globally. I was particularly interested in my home state; cleantech is particularly important to California’s economic future. The Report states:

“Not surprisingly, the San Francisco Bay Area/Silicon Valley repeats as the top area for cleantech jobs, with Los Angeles second. Even in its challenging economic times, California continues to see fairly robust job activity in clean-tech startups and established players, with the state’s high-tech giants like Cisco, Intel, and Google aggressively expanding their smart-grid initiatives. San Diego (seventh) and Sacramento (15th) give California four cities in the Top 15, but the Golden State faces an uncertain clean-tech future if the state’s voters pass a November ballot measure, Proposition 23, that would suspend the state’s landmark greenhouse gas reduction laws.”

Tesla Motors provides a good example of job creation. In 2012, it plans to reopen a shuttered plant owned that was owned by a Toyota (TM) – General Motors JV. The plant will create about 1,000 jobs as two exciting new electric vehicles roll-out: the Tesla Model S (TSLA) premium sedan with a electric range that far exceeds the Nissan LEAF (NSANY) and Ford (F) Focus Electric; and the new Toyota RAV4 EV, long an SUV favorite of EV enthusiasts. In the new world of global “co-opetition,” Tesla is 2% owned by Toyota and 5% owned by Daimler. The two auto giants admire Tesla’s innovation, first to market speed, and battery-pack technology.

Northern California is also rich with smart grid leaders including Silver Spring Networks, Cisco (CSCO), and EPRI. Solar energy innovators abound including Bright Source, Sun Power (SPWRA), and MiaSole.

Southern California is rich innovators making gasoline and diesel not with petroleum, but with algae, waste, and cellulose. In San Diego’s biotech research center, surrounding the University of California at San Diego and the Salk Institute are over 40 companies working on biofuels from algae. Sapphire Energy and Synthetic Genomics both have received over $100 billion from private equity investors to expand their research and production of algal fuels.

These are a few examples from my home state of California. The Clean Edge report covers exciting opportunities nationwide, the dynamics of U.S. – China competition, and 3 million jobs globally in a variety of billion dollar cleantech sectors. Clean Tech Job Trends 2010 is recommended reading for everyone. The free report can be downloaded

By John Addison, Publisher of the Clean Fleet Report and conference speaker. The author has no positions in the stocks mentioned in this article.