A number of bills were chaptered that could decisively move California in the direction of controlling greenhouse emissions, accelerating the development of alternative energy supplies, and improving California's market for efficient energy production and use. On the supply and energy performance side, new legislation would require the PUC, by February 1, 2007, to establish a greenhouse gases emission performance standard for all baseload generation of public utilities. In addition, if Proposition 87 on the November General Election ballot passes, a $4 billion program would be established to reduce petroleum consumption by 25%. The program includes research and production incentives for alternative energy, alternative energy vehicles, energy efficient technologies, and for education and training.

Some say that California is risking its economy by taking these actions. An alternative view is that California, given its massive internal energy production and consumption market, is striving to be the first mover in developing the new stationary and mobile emission control technologies that the world will soon need. For example, between 1994 and 2004, oil use in China more than doubled. If oil consumption per person reaches the U.S. level by 2031, China will use 99 million barrels of oil a day; world production today is 84 million barrels a day. If China were to have three cars for every four people, as the United States now does, its fleet would total 1.1 billion vehicles, well beyond the current world fleet of 800 million. Coal provides nearly two-thirds of China's energy. China's annual burning of 960 million tons easily exceeds the 560 million tons used in the United States. By encouraging the rapid development of emission control and consumption technologies for its own markets, California companies will be in a strong position to take advantage of China's and other developing country's ever increasing pressure to control energy costs. If this scenario works out, California would occupy a leadership position in the new global economy.

CHAPTERED

• AB 32 (Nunez and Pavley) and companion bill SB 1368 (Perata) Establishes a greenhouse gases emission performance standard for all baseload generation of load-serving entities and public utilities. Would impose stringent demands on energy suppliers even outside California's borders for producing the lowest possible emission of greenhouse gases. Requires Large producers of carbon dioxide to reduce industrial carbon dioxide emissions by 25% by 2020. These bills were signed by the Governor.
• AB 1925 (Blakeslee) Requires the State Energy Resources Conservation and Development Commission to submit a report to the Legislature recommending how the state can accelerate the adoption of cost-effective geologic sequestration strategies for the long-term management of industrial carbon dioxide.
• AB 2021 (Levine) Requires the Energy Commission by certain dates, to develop a statewide estimate of all potentially achievable cost-effective electricity and natural gas efficiency savings and to establish related annual targets over 10 years. A plan would also be required to improve the energy efficiency and to decrease the peak electricity demand of air-conditioners. In addition, local publicly owned electric utilities would be required to identify all potentially achievable cost-effective electricity efficiency savings and to establish annual targets over 10 years.

VETOED

• SB 757 (Kehoe) Among other provisions, this bill would enact the Oil Conservation, Efficiency, and Alternative Fuels Act, stating that it is state policy that state agencies shall take all cost effective and technologically feasible actions to reduce the growth of petroleum consumption, and increase transportation energy conservation, efficiency, and the use of alternative fuels.

ON THE BALLOT

• Proposition 87 on November ballot: a $4 billion program with the goal of reducing petroleum consumption by 25%, includes research and production incentives for alternative energy, alternative energy vehicles, energy efficient technologies, and for education and training. It would be funded by a tax of 1.5% to 6% (depending on oil price per barrel) on producers of oil extracted in California. The program would be administered by a new California Energy Alternatives Program Authority.