Introduction

On the morning of June 21, 2011, a worker named Robert David Taylor was walking through an oil field west of Taft, California, when he noticed a plume of steam coming from the darkened earth. Taylor, 54, was a Chevron supervisor who had spent three decades around Kern County’s Midway-Sunset field, the largest and most productive in the state. He and two co-workers had been dispatched to fix the “chimney” near an idled well known to spew scalding geysers of oil, water and rocks as high as 40 feet in the air.

California was in the midst of an oil boom. Crude prices had soared above $100 per barrel, and pump jacks, pipes and power lines snaked across the southern end of the San Joaquin Valley, about two hours north of Los Angeles. The spouts at Well 20 that day were the result of an increasingly popular technique called cyclic steaming, in which steam is pumped into the earth to dislodge thick, tar-like crude. After a century of extraction, the easy oil was gone, and this was like filling an empty ketchup bottle with water to get the last few drops. It was dangerous work — the intense heat fractured geologic formations to release oil but it also destabilized the porous earth and created sinkholes.

As Taylor approached the site, the ground gave way. He was sucked feet first into a burbling cauldron of fluids and poison gas. He screamed. A co-worker rushed to reach him with a piece of pipe, but it was too short. Within seconds, Taylor disappeared into the muck. It took 17 hours to recover what remained of his body.

Two hundred and eighty miles north in Sacramento, the news of Taylor’s death shook Elena Miller. As the state’s oil and gas supervisor, Miller had been warring with energy companies for the better part of a year over the potential dangers of underground injection — the umbrella term for cyclic steaming and other forms of oil extraction that involve infusing fluids into the earth. Now, she redoubled her efforts, banning steam injection around the accident site and cracking down on new drilling permits. The oil industry was outraged. Hamstrung by unrest in the Middle East and North Africa, energy companies were rushing to ramp up production in California, marching steadily out of century-old oil fields and into almond orchards, alfalfa fields, and just about anywhere crude might be found. Miller threatened all of that.

Four months later, she was fired.

Robert David Taylor’s grave in Taft, California. Elizabeth Fladung





‘We’re ready to fight’

Known nationally as a laboratory of progressive values and environmental protection, California is perhaps the last place one would expect Big Oil to hold sway. The state has passed some of the toughest energy regulations in the country and set aggressive new goals to cut greenhouse-gas emissions. Since the election of Donald Trump, Gov. Jerry Brown has positioned California as a bulwark against a new president who sees climate change as a “hoax” and a White House that promises to appoint the most pro-drilling Cabinet in American history. “We’ve got the scientists, we’ve got the lawyers, and we’re ready to fight,” the governor thundered during a speech in San Francisco in December.

Praise came quickly.

“At Forefront of Climate Fight, California Plans an Offensive,” said The New York Times.

“This Is What the Resistance Sounds Like,” said The Atlantic.

Obscured by the headlines, however, is oil’s enduring power in the Golden State. Long before Silicon Valley, medical marijuana and sushi burritos, crude was king. Today, California is the third-biggest oil-producing state, behind only Texas and North Dakota. Over the past six years, as the state has won international praise for its efforts to fight climate change, Big Oil has spent more than $122 million on campaign contributions and on lobbying to boost production, weaken regulatory agencies and mold energy policy.

Perhaps more than any other special interest, the oil industry has helped reshape California’s political landscape, in part by cultivating a relationship with Brown and nourishing a new breed of Democrats: moderate lawmakers who are casting a critical eye on the state’s suite of climate-change policies, including its signature cap-and-trade program, which aims to curb greenhouse gases by penalizing companies that pollute. As a result, the industry saw a spike in production for the first time in nearly two decades, turned back legislative efforts to halve the state’s petroleum usage and overcame calls for a statewide ban on hydraulic fracturing, or fracking. In perhaps the biggest sign of oil’s clout, Brown, a liberal icon who made a name for himself as an environmentalist in the 1970s, eased restrictions to clear the path for more drilling. “I don’t think it’s responsible to let Third World countries do the oil production so that Californians can drive around, even in their hybrids,” Brown told Politico in 2015, as he prepared to attend the United Nations climate summit in Paris. “We have to shoulder our part of the responsibility.”

That business-friendly approach has come at a price. Two and a half years ago, California’s oil regulator acknowledged that it had allowed companies to drill thousands of wells into aquifers — underground reservoirs — that were supposed to be protected as potential sources of drinking water. The U.S. Environmental Protection Agency stepped in to oversee the cleanup. A year later, after a gas leak in the San Fernando Valley forced the evacuation of thousands of residents, state lawmakers blamed lax regulation. It was the largest discharge of methane, a potent greenhouse gas, in American history. The state’s overall carbon emissions have decreased in recent years, but only modestly; industrial pollution from oil and gas development has risen.

All of this, some environmentalists and lawmakers say, calls into question California’s ability to live up to its reputation as a climate leader.

Bill McKibben, one of the country’s most prominent climate activists, pointed to the state’s embrace of fracking as a “glaring exception” to an otherwise-impressive environmental record. “There’s no other explanation than the political and financial clout of the oil industry,” he said by email, adding that, “Every ton of carbon Occidental [Petroleum] sends into the atmosphere makes it that much harder to imagine a California that survives the droughts of this century.”

Some specifically fault Brown, who has boasted of “the most aggressive control of oil production and use anywhere in the Western Hemisphere.” In a report last week, a prominent California-based consumer group gave the governor a “dirty” rating for his actions on oil drilling.

“‘Hypocrite’ is almost too nice of a word. It’s more of a con,” said Adam Scow, state director of Food & Water Watch, which endorsed the report. “Once you start to look at the real policies and the real problems and the fact that we are still the nation’s third largest oil-producing state, things are not all so rosy here.”

A sliver of Chevron’s massive Kern River Field in Bakersfield. Elizabeth Fladung

Power of the oil lobby

Lobbyists have so much power in the California Legislature that insiders refer to them as the “third house.” Few groups have more influence than the Western States Petroleum Association, or WSPA (pronounced Wis-Pa), as it’s known in the capital. Founded in 1907 amid the black-gold boom that shaped Southern California, WSPA is the nation’s oldest oil trade group, representing more than two dozen major companies in five states, including California. Much of its staying power stems from an unrivaled political war chest; it routinely spends more on lobbying than any other special interest in Sacramento — a necessity, its leaders say, because of the oil industry’s “unfortunate and undeserved” negative image, as well as the strong environmental principles of the state’s elected leaders. “Their stated goal is to reduce petroleum use above all else,” WSPA president Catherine Reheis-Boyd said. And with millions of Californians dependent on gasoline-powered vehicles, “the facts dictate us being very much part of that conversation, no matter where California goes.”

After 26 years with the trade group, Reheis-Boyd is the soft-spoken public face of the oil industry, backed up by a team of lobbyists. She leads an organization that is decidedly old school: Each winter, it hosts a reception for lawmakers at the upscale Esquire Grill a few blocks from the Capitol building, and continues to wine and dine them throughout the year, often in tandem with its smaller counterpart, the California Independent Petroleum Association, or CIPA. In 2015, for instance, when state lawmakers convened for an annual corporate-sponsored summit in Maui, WSPA treated nine legislators to dinner at Spago, running up a $3,300 tab. The following month, CIPA whisked 22 lawmakers and two candidates to its oil symposium at the Resort at Pelican Hill, a five-star property in Newport Beach overlooking the Pacific Ocean. Two state senators and a Senate candidate enjoyed $300 rounds of golf. The outings are legal under the state’s campaign finance laws.

But WSPA’s real influence stems from the millions more its members — including Chevron, California’s third-largest company by revenue — pour into a network of political action committees — outside groups designed to boost industry allies and target critics under innocuous names such as the Coalition to Restore California’s Middle Class. They run attack ads and send out mailers to influence campaigns as well as legislation. “Unless leadership directly intervenes for a bill, the oil industry can hold it hostage,” said former Assemblyman Das Williams, a Santa Barbara Democrat who chaired the California Assembly’s Natural Resources Committee. “On any given day, they’ve got between six and nine Democrats, in addition to most of the Republicans.” That approaches half the 80-member Assembly, and that bipartisan coalition has established a track record of watering down or blocking climate-related legislation.

The industry had already changed the rules of legislative debate; in 2010, Chevron was the leading corporate sponsor of a ballot measure to require a two-thirds vote, rather than a simple majority, for state and local governments to enact new fees on businesses.

When energy-related bills pass the Legislature, WSPA and its members have a hand in how rules are crafted and laws are enforced. Lobbyists pick up meals for regulators at fast-food restaurants, refinery cafeterias and oceanfront resorts. Oil executives and state regulators meet as an “oil and gas work group” to discuss rulemaking, and WSPA’s Reheis-Boyd was even appointed to a state panel that helped create marine sanctuaries. Last year, when an assemblyman filed a request to audit the state agency that administers the state’s cap-and-trade program, the Microsoft Word file showed it had a different author: WSPA’s chief lobbyist. The lawmaker’s chief of staff told the Los Angeles Times that the group, like any other special interest, “tend[s] to have the policy expertise when we have questions.”

Troubled regulator

When California established an oil regulator — what’s now the Department of Conservation’s Division of Oil, Gas and Geothermal Resources, or DOGGR — a century ago, it wasn’t with the environment in mind. The state was acting at the behest of oil executives who were tired of fighting over land and fouling one another’s projects. The agency’s role was to help companies “win from the ground the greatest amount of oil at the least expense,” officials wrote just after passage of the 1915 law that created the Department of Petroleum and Gas. “It is not our desire to assume the role of a prosecuting officer thrusting regulations upon unwilling subjects.”

Even as California changed — birthing the modern environmental movement and leading the way on renewable energy — the approach of oil regulators did not. A 2007 state audit found one DOGGR field office that was run like an industry fiefdom, with regulators buying stock in companies they oversaw. One official told a firm how to circumvent a planned moratorium on new oil permits and routinely asked oil companies to make contributions to the charity that employed his wife. Most important, regulators rarely asked companies for proof that their operations were not endangering potential sources of drinking water, as required by state and federal law.

Elena Miller inherited the agency in 2009. An attorney at the California Energy Commission and then the state Department of Corrections, Miller had come full circle: she had begun her law career as a paralegal for Atlantic Richfield Company, or ARCO, in the 1990s, working on Alaska pipeline litigation and later living in oil-rich Venezuela. When she began requesting well-casing diagrams from the oil industry, it was, by historical standards, earthshaking. The extra scrutiny slowed the issuance of drilling permits. Then Robert David Taylor met his end in a Kern County sinkhole. Miller and her boss at the state Department of Conservation, Derek Chernow, compiled a binder of spills, seeps and eruptions related to steam injection and insisted that companies document every well near an injection site — fluids could travel through old, broken or unstable wells and taint fresh water — before receiving new permits. “Imagine that,” Chernow wrote Miller, “A regulator not in bed with the regulated.”

The U.S. EPA encouraged the crackdown. Its audit of California’s underground injection program, the first comprehensive review in three decades, came out just after Taylor’s death and found state regulators failing by nearly every measure: They weren’t properly calculating the impacts of drilling on drinking water, ensuring sound well construction or penalizing companies that broke the law; a state report later found that DOGGR had failed to collect millions of dollars in unpaid fines. Federal officials ordered the state to step up scrutiny of oil projects. Already unhappy with how Miller’s oversight had slowed drilling, the Western States Petroleum Association proposed a shortcut: Regulators would grant permits without the usual environmental reviews, and oil companies would provide the assessments later.

The idea was rejected, but WSPA was undeterred. Behind the scenes, oil-industry representatives lobbied lawmakers and deployed state power brokers, including former Gov. Gray Davis, legal counsel for Occidental, the country’s fourth-largest oil company. WSPA orchestrated a letter-writing campaign; before long Brown’s office was flooded with missives from oil executives and workers alike, all claiming the industry was on the verge of a shutdown. Brown had a choice: He could back his regulators and risk antagonizing industry — or he could spur energy production and make a powerful ally in the process.

Gov. Jerry Brown traveling through Africa with singer Linda Ronstadt in 1979. Mark Foley/AP





‘Governor Moonbeam’

In the 1970s, Jerry Brown cemented his place in the national imagination as “Governor Moonbeam,” a liberal dreamer who embodied California cool — or California kook, depending on where one stood. He drove a Plymouth Satellite, spurned the governor’s mansion for a mattress on an apartment floor and dated singer Linda Ronstadt. But beneath that caricature lay a policy wonk who embraced the environmental movement like no politician had before. Confronted with California’s booming population and stifling pollution — smog alerts regularly forced schools to cancel recess — he enacted the nation’s first energy-efficiency standards, signed strict clean-air laws, and blocked offshore oil drilling.

Brown’s worldview, however, was tempered by a 28-year odyssey after he left Sacramento, one that took him from charity work with Mother Teresa in Calcutta to another failed presidential campaign (there were three in all) to the mayor’s office in Oakland beginning in 1999. Friends say Brown’s time in Oakland was seminal. Keen to jump-start redevelopment in the struggling city, he had to deal with a patchwork of state agencies and a thicket of environmental regulations, some of which he had championed as governor.

Re-elected to the state’s top office in 2010, Brown was singularly focused on the economy: with recession still rippling through the state, California faced a $27 billion deficit and a record unemployment rate of 12.1 percent. Brown barely mentioned the environment during his first State of the State address, a speech so focused on fiscal discipline it could have been delivered at a Republican fundraiser. “At a time when more than two million Californians are out of work,” Brown told the Legislature, “we must search out and strip away any accumulated burdens or unreasonable regulations that stand in the way of investment and job creation.” The message was clear: If ideology had dominated Brown’s first stay in the governor’s office, pragmatism would dominate the second.

Having campaigned on a promise not to raise taxes without voter approval, Brown moved quickly to lay the groundwork for a ballot measure that would hike levies on the wealthy. It was a risky move. Brown had just spent $36 million to get elected, and now he had to go back to his affluent donors, as well as the business community, and ask for more — all for an initiative that would target people like them. With its deep pockets, the oil industry could help pass or kill the measure, Proposition 30. And, at that particular moment, it wanted no-fuss drilling permits from state regulators. According to memos and emails obtained by the Center for Public Integrity, Brown’s office began pushing for a shortcut, one that would allow drilling to proceed without full environmental reviews.

Chernow was astounded. A former legislative aide and conservation advocate, he believed in his department’s mission.

In October of 2011, four months after Taylor’s death, he and Miller pushed back. “This approach is simply contrary to law,” Chernow wrote in a memo to his superiors. The U.S. EPA had asked the state to tighten its standards, not relax them, he said, warning that the proposed shortcut would likely draw legal challenges from environmental groups.

The following day, the regulators were summoned to the governor’s office. There, Chernow alleged in court filings, one of Brown’s senior advisors told them to fast-track the permits. The aide then handed Chernow a proposal modeled on the one WSPA had presented earlier. The regulators were incensed. In a follow-up call, tensions flared. According to a declaration by Chernow, Miller told Brown’s advisor that the proposal would break the law. The aide shot back: This is an order from the governor. The next day, Brown fired Chernow and Miller — a move the oil industry applauded.

Brown’s decision to relax regulations turned on “making sure all these people didn’t come after Prop 30 with a knife,” said a source familiar with the governor’s thinking. There was ample cause for concern. In 2006, the oil industry had outspent environmentalists to kill an initiative that sought to place a tax on crude oil. The $154 million fight had set a new spending record for ballot-measure battles in California. Brown and his top aides declined to be interviewed for this story, but spokesman Gareth Lacey dismissed as “ridiculous” any claim that the governor’s actions were influenced by his tax campaign. He also disputed Chernow’s characterization of events. “The expectation — clearly communicated — was and always has been full compliance with the Safe Drinking Water Act,” he said.

Nonetheless, Brown replaced Chernow and Miller — who declined interview requests — with appointees more sympathetic to the oil industry. The new oil and gas supervisor was a longtime DOGGR manager who’d worked in the agency’s Bakersfield office. In the months after the firings, regulators approved nearly 80 permits that had been on hold. Stephen Chazen, president and CEO of Occidental, told investors during an earnings call that Brown had prompted the “change in attitude.” “We’re pleased with the governor’s involvement,” he said.

Brown himself began using the firings as evidence of his commitment to pare regulations — and made clear that oil was still vital to California’s economy. In January of 2012, at a press conference intended to showcase the state’s commitment to solar energy, Brown veered from his prepared remarks to note “the oil rigs are moving in Kern County” and affirm the state’s status as an energy leader. “It’s not easy,” he said. “There are going to be screw-ups. There are going to be bankruptcies. There will be indictments, and there will be deaths. But we’re going to keep going.” That day, Occidental gave $250,000 to Brown’s tax campaign. Not long after, it gave another $100,000, this time to the Oakland Military Institute, a charter school Brown had founded as the city’s mayor. That November, Brown’s tax measure, Proposition 30, passed easily. Oil companies had contributed more than $1 million to the campaign. More important, they hadn’t opposed it.

Kern County farmer Mike Hopkins next to a field of new pistachio trees where his cherry orchard once stood. Elizabeth Fladung

What killed Mike Hopkins’s orchard?

The heart of California’s oil industry is a short drive from Los Angeles, on the other side of the Tehachapi Mountains and past a curtain of smog so thick that it comes with its own color-coded warning system (green for good air quality, yellow for moderate, red for unhealthy). Orchards, vineyards and fields stretch to the horizon, sharing the fertile valley floor with pump jacks and derricks. Kern County accounts for 70 percent of California’s oil production, and more than 40,000 people hold energy-related jobs. One high school’s mascot is a driller, and the town of Taft, near where Robert David Taylor died, crowns an Oil Queen every year.

Mike Hopkins grew up in the county and studied agriculture at Cal Poly-San Luis Obispo and the University of Arizona. For his senior project, he mapped out an almond orchard, and he’s been farming ever since. In the fall of 2011, around the time Brown fired the oil regulators, one of Hopkins’s most fecund parcels of land was in Rosedale, a 58-acre orchard that bore almonds and cherries. Over the next three years, state oil regulators paved the way for a six-fold increase in injection projects, cutting their typical review time in half. Hopkins began to notice changes in the Rosedale field.

First, his cherry trees wilted. “I actually had one of my neighbors drive by and say, ‘Hey, are you abandoning your cherries?’ And I said, ‘No, why?’ and he said, ‘They look like shit.’” Hopkins hired scientific consultants who found high levels of salt and boron in the soil and water — a death sentence for most plants. “This is something that’s not natural,” a water company official told him.

The injection wells and rusting storage tanks that had ringed his ranch for decades suddenly appeared menacing. Hopkins called oil producers in the area and visited the local office of DOGGR, the agency Miller and Chernow had overseen. No one, Hopkins said, could offer any explanation for the contamination. Soon, the cherry trees began to die, and after a lackluster harvest in 2012 Hopkins decided to pull the orchard. “It hurts you,” he said. “I know it doesn’t sound like you can equate the two, but if you had a herd of goats or cattle, and you did everything in the world to feed them and nurture them, and they started dying, and you had to kill them all — same feeling.”

Mike Hopkins compares the leaf of a healthy almond tree to that of one affected by groundwater contamination. Elizabeth Fladung

Hopkins soon learned that salt and boron were waste products of oil drilling: each barrel of crude that firms bring to the surface is accompanied by more than 15 barrels of briny water. That mixture of toxic substances is often re-injected into “exempted” aquifers, geologic formations that were written off as underground garbage dumps decades ago, typically because they either do not contain water or the water is too contaminated or too deep to retrieve. After reviewing state records, Hopkins filed a lawsuit, accusing four oil companies that operate near his orchard of injecting their wastewater into aging and damaged wells without first surveying the area to ensure containment. Idled and abandoned wells — some just 200 feet from his ranch — served as pollution pathways to his groundwater, he alleges.

In August, the height of harvest season, the air was thick with dust as farm workers shook almonds from nearby trees, some of which showed signs of wilting. Hopkins drove to the spot in his orchard where, over the course of three days, he had watched as backhoes yanked row after row of cherry trees — 2,232 in all. Now, the field is full of pistachio trees, which are hardier but will take years to mature and start producing nuts. “It’s hard to tell a farmer not to grow something if it’s in their blood,” he said.

‘I don’t even feel like they care’

Hopkins wasn’t the only one worried about water. California’s oil boom coincided with a record drought; the rains and snowpack that typically provide much of the water for the state’s agricultural industry slowed to a trickle, prompting farmers to tap unprecedented amounts of groundwater. In fact, in the Central Valley, they sucked so much from basins that the ground in some areas began to sink at a pace of a foot a year. With such parched conditions, and with aquifers becoming the largest source of water for growers as well as the general public, federal officials took a closer look at how California was protecting its subterranean supplies from oil drilling. After reviewing aquifer maps, they grew concerned that state regulators were violating the Safe Drinking Water Act by allowing wastewater injections outside approved zones, potentially fouling what hydrologists referred to as the state’s “reserve banking account” of water. U.S. EPA officials asked DOGGR for more information. What they got back, in 2014, was shocking.

Over the previous 30 years, the state had allowed oil companies to inject wastewater into nearly a dozen aquifers that were supposed to be protected by federal law — some containing water clean enough to drink without treatment. About half of the more than 2,500 suspect injection wells had gotten permits since Brown took office, The Associated Press found. In a preliminary review of the riskiest sites, the state shut down nearly two-dozen wells, saying their operation “poses danger to life, health, property, and natural resources.”

“California is a world leader when it comes to adopting green legislation. But these measures are only as good as their implementation,” said Jared Blumenfeld, a former EPA regional administrator who oversaw the state. “Without proper institutional support, funding and enforcement, environmental laws become paper tigers.”

State lawmakers demanded answers, but they were hard to come by. Not only had the oil agency failed to deliver a mandatory annual report to the Legislature for three years, but an internal review by DOGGR found that injection project files also were “confusing, information-deficient, overly generic, or simply absent.” At a state Senate oversight hearing in early 2015, Brown administration officials conceded they had made mistakes but cast them as the result of an understaffed agency beleaguered by unqualified workers and poor recordkeeping. Some lawmakers weren’t buying it. “There is a culture here that has been so much moved by the oil and gas industry,” said Sen. Hannah-Beth Jackson, a Democrat from Santa Barbara.

Regulators assured the Legislature that they had found no contamination of drinking water — but that assessment came with a large caveat. Shoddy records meant that they would never be able to say with any certainty how much water had been lost. “Many aquifers had no baseline water quality data,” Blumenfeld said, “so it’s often impossible to determine the extent of contamination from decades of oil industry injection.”

Natalie Beller Elizabeth Fladung

About 300 miles south of Sacramento, Natalie Beller, a registered nurse who lives in the Central Coast town of Arroyo Grande, stopped drinking and cooking with her well water. Tucked into a scenic canyon, her home is a little more than a mile from the Arroyo Grande oil field, where the state had allowed companies to inject into a protected aquifer and where Phillips 66 was building a pipeline that would carry crude past her property. Looking at the yellow warning posts from her kitchen window, Beller imagined her daughter, now 6, drinking tainted water. “Anybody living out here is on well water,” she said. “I just can’t believe it’s so easy to sacrifice the health and safety of fellow human beings.”

The EPA gave California an ultimatum: shut down the most dangerous wells and submit the rest for formal “exemption” — or risk a federal takeover. Oil companies — including one that wanted to expand its operations in the Arroyo Grande field — asked for a number of exemptions. Beller and her neighbors objected to the Arroyo Grande proposal but it was approved by DOGGR and the state water board; the EPA still must sign off. “My experience with our state government agencies has been really disappointing,” Beller said. “I don’t feel like they’re representing me. I don’t even feel like they care.”

Oil targets the ‘mod squad’

As Brown coasted to a fourth — and final — term in late 2014, environmentalists were confused and irritated: was the governor their ally? In addition to easing drilling rules, he had resisted calls to ban fracking and pass a severance tax on oil. At the same time, he had pushed policies that made California a leader on efforts to combat climate change, such as requiring the state to get a third of its electricity from renewable sources and offering rebates for electric cars to juice the market for zero-emission vehicles. When Brown addressed the state Democratic Party’s convention in Los Angeles, as he pledged to manage the state’s water “in a careful, efficient, and wise way,” hecklers interrupted: “No fracking! Ban fracking!” Brown raised his voice. “I challenge anybody to find any other state” doing as much to fight global warming, he said.

Indeed, with the state’s deficit erased and its economy surging, he began speaking with new urgency about climate change. Addressing a United Nations summit in New York, he called it an “existential threat” to humanity and decried the “toxicity of carbon itself.” With the state on track to achieve its original goals for reducing greenhouse gases, the governor proposed even more ambitious ones: within the next 15 years, he said, California should get half its electricity from renewable sources, double the energy-efficiency of existing buildings — and cut petroleum use by 50 percent. Democrats had a near-supermajority in the Legislature. And Brown had a powerful partner to shepherd his plan through: Kevin de León, a Los Angeles Democrat and the Senate president pro tempore. But neither politician appreciated how WSPA and its members had reshaped the caucus.

State Senate President Pro Tempore Kevin de León has been one of the leading Democrats advocating for climate-change legislation. Elizabeth Fladung





In recent years, California had adopted a “top-two” electoral system: candidates of all parties compete in an open primary, and the top two vote-getters face off in a general election. That meant many contests that would have been decided in a partisan primary, with nominal opposition in the general, now continued into November — essentially doubling the cost of campaigning. The oil industry saw an opportunity. With environmental advocates concentrated in the largely white, rich enclaves on the coast, the industry wooed moderate Latino and African-American lawmakers from urban and rural districts where energy firms tend to operate. These communities are often choked by pollution but also have some of the lowest voter-turnout rates in the state.

“There’s a direct correlation between how few voters participate in your district and your propensity to be influenced by special-interest money,” said Republican strategist Mike Madrid, noting that both environmental groups and oil companies fill that civic vacuum. Since 2012, however, it’s the energy industry that has made a full-court press for moderates, showering more than $12 million on their campaigns and the outside groups dedicated to their elections.

This bloc of votes, the so-called mod squad, is often an impediment to climate-change initiatives. “We are spending as much time as we can with anyone, and I would say it’s either side, Republican or Democratic, that are moderate in their view, because we are very firm in our belief that you have got to have both a strong economy and a strong environment in this state,” WSPA’s Reheis-Boyd said. Moderates say they want more control over climate programs that penalize industry without clear results in their districts. “On these environmental issues, it’s the haves versus the have-nots,” said Assemblyman Jim Cooper, co-chair of the moderate caucus and a Democrat whose district lies just south of Sacramento. “These environmentalists, I think they’re well intentioned, but everything that’s happened, the benefits go to the affluent. In the meantime, the disadvantaged and the middle class have been left behind.”

Within weeks of de León’s introducing a bill to enshrine Brown’s goals in law, oil companies and their trade groups began dispensing money to moderate legislators and the black and Latino caucuses. In the last three months of the 2015 legislative session, they spent $11.5 million on lobbying, more than any other industry. WSPA accounted for more than half of that amount. By contrast, NextGen Climate Action, its most moneyed environmental rival, spent $1.2 million.

After nearly a decade of service in Sacramento, de León had never seen anything like it. Although he had accepted oil company contributions in his career, the lawmaker had come to see climate change as a defining issue. Carbon emissions had had a devastating impact on his Los Angeles district, a diverse swath of poor and working-class neighborhoods, hemmed in by six major freeways and winds carrying harmful ozone pollution from the coast.

Appearing before the Assembly’s Natural Resources Committee, he urged his colleagues to reject the oil industry’s onslaught. “You will hear a carefully calculated blend of factual inaccuracies, logical fallacies, errors of omission, and scare tactics. … Folks would like you to believe that this is a scene out of a movie of ‘Mad Max,’” he said. In the post-apocalyptic action films, oil is a rare commodity.

Seated at a table in a hearing room, WSPA lobbyist Eloy Garcia told lawmakers the bill set aggressive goals without specifics on how to achieve them. As a result, he said, those decisions would be made by the California Air Resources Board, the “vast [and] unrestrained” executive agency charged with implementing the state’s climate programs. “The people of California expect you to make those decisions,” Garcia told the committee. “Power flows from the constitution to the Legislature, down to the regulators, not the other way.” De León’s bill, seeking a 50-percent cut in oil use, was, he said, unrealistic and arbitrary.

“When we set round numbers like 50, 50, 50, why 50? No one’s asking the question,” Garcia said. “Why not 62? Why not 70? Why not 58?”

De León fired back. “I agree with Mr. Eloy Garcia. If we want to go 68, 50, 70. … That’s promoted by WSPA,” he said, flashing a smile.

“Why not do 100 percent and justify that to your constituents, that you’re going to take all their fuel away?” Garcia responded.

That summer, WSPA’s “California Drivers Alliance” launched an ad campaign. In one spot, a woman in a black blazer stands at a gas station and says: “If you can afford a Tesla, then this message really won’t matter to you.” She warns that “the California Gas Restriction Act of 2015” — its actual name was the Clean Energy and Pollution Reduction Act — will result in gas rationing and higher fuel costs. “But really, it’s about making it harder for regular people to drive to work and drive home each day.” Environmental groups pushed back with their own ads, and President Obama championed the legislation in an energy speech. But by late August, moderate Democrats were seeking concessions and WSPA offered three pages of amendments to lawmakers and the governor’s office.

Days before the legislative session ended, de León and Brown stripped the oil-reduction component from the bill. “This is one skirmish,” the governor said, “but I’ll tell you, it’s increasing the intensity of my commitment to do everything I can to make sure we reduce oil consumption in California and continue on the path of leading the world in a sustainable future.” The watered-down bill, which maintained Brown’s renewable energy and efficiency targets, easily passed the Assembly and the governor signed it into law. In the weeks that followed, WSPA hosted three lawmakers at the Ritz Carlton in Half Moon Bay, California, where the group was holding its annual conference (one legislator racked up nearly $1,500 in expenses; all three had expressed reservations about the oil reduction target). Reheis-Boyd said WSPA’s lobbying activities, in practice, were no different than those of other industries seeking to influence policymakers. “There are opportunities to present your views to people who are interested in them,” she said, “and I think anyone would take that opportunity.”

The Phillips 66 refinery in the Wilmington neighborhood of Los Angeles. Elizabeth Fladung

A win for environmentalists — but an uncertain future

A year later, dozens of environmental lobbyists gathered over chicken kabobs and cocktails at Hock Farm, a dimly lit, farm-to-table restaurant three blocks from the Capitol. It was August, four weeks before the end of the legislative session, and the mood was bittersweet. After 14 years in Sacramento, Sen. Fran Pavley, the Legislature’s most prominent environmental champion, was retiring, but her top priority — a bill to toughen California’s already-aggressive climate goals — was languishing in the Assembly. After WSPA’s last campaign, few thought it would pass. Even Brown, for all his bombast the previous year, had been meeting with oil representatives in a bid to win support for his climate agenda.

Reflecting on their loss, environmentalists had hit on a key vulnerability: the movement’s failure to build relationships in California’s communities of color. As a result, oil companies had successfully cast climate change as a luxury issue for elites, disconnected from the economic realities of low-income and middle-class people. As Rob Stutzman, a Republican operative who has advised WSPA, put it: “The enviros created a battlefield for industry to win on.”

De León and others were determined to change the narrative. Pavley, who represents an affluent, coastal area in Los Angeles, found an unlikely partner in Eduardo Garcia, a first-term Latino assemblyman from the Inland Empire. Concerned about poor air quality in his desert district, he was pushing his own climate legislation, which would prioritize emission cuts at refineries while giving the Legislature more oversight of the Air Resources Board, something moderate Democrats wanted.

The symbolism of that pairing sent a strong message. In Garcia’s district, one out of every four residents lives below the poverty line and unemployment approaches 11 percent, more than twice the statewide average. In Imperial County, east of San Diego, emergency room visits by children due to asthma are double California’s rate. “The discussion about preservation and conservation and climate-changing patterns and polar bears dying is extremely important to people,” Garcia said. “But my perspective is how about we put people at the core of the conversation, public health of people, the economic vibrancy of these communities of color that tend to be in the higher proportions of polluted communities.”

The oil industry opposed the measures but environmentalists stepped up their lobbying. Reversing the previous year’s dynamic, NextGen Climate Action spent $7.3 million on advocacy in the final three months of the legislative session — more than any other special interest and nearly three times WSPA’s outlay. An ad featuring a little girl in front of a refinery blasted oil companies for “trying to weaken our clean air laws.” A coalition of mainstream environmental groups, environmental-justice advocates and clean-energy companies targeted moderate Democrats to correct the perception that “environmentalism is a white issue,” said Quentin Foster, of the California Environmental Justice Alliance. This time, instead of slamming critics as industry lackeys, they catered their approaches to individual lawmakers, emphasizing pollution-reduction efforts to some while playing up the economic opportunities of renewable energy to others. It worked. Catching oil lobbyists by surprise, supporters rushed the legislation to a vote in the Assembly heading into the final week of the session. The final tally was 42-29 — passage, with one vote to spare. The state Senate had already approved the legislation, and Brown lauded the Assembly for “rejecting the brazen deception of the oil lobby and their Trump-inspired allies who deny science and fight every reasonable effort to curb global warming.” Two weeks later, with de León, Pavley and Garcia by his side, the governor signed the bill into law. The setting: Vista Hermosa Natural Park in downtown Los Angeles, which was built atop an old oil field.

Since the defeat, some in Sacramento see oil’s power slipping. The California Democratic Party, which has received $2.5 million from the oil and gas industry in the last decade, announced in November that it would no longer accept political donations from oil companies. The announcement came after news that the state’s campaign finance watchdog had opened an investigation into allegations that the party had improperly funneled hundreds of thousands of dollars from the oil and gas industry to Brown’s re-election campaign in 2014. Party officials did not respond to a request for comment but have said they are cooperating with the probe. At the ballot box, the industry lost a marquee legislative race and failed to beat back a ballot measure to ban fracking and new wells in Monterey County, the state’s fourth-largest oil-producing county, despite outspending backers roughly 30 to 1.

On the other hand, November’s elections swelled the ranks of moderate Democrats in the Legislature, giving the industry potential new allies. And oil companies are almost certain to benefit from the Trump administration, which has vowed to relax environmental regulations and overhaul agencies like the EPA, which has played a critical role in reforming DOGGR. “Oil will use every trick in the book,” said Dan Jacobson, head of the advocacy group Environment California. “They’re going to do whatever it takes to keep oil as the main form of energy that moves us from point A to point B.”

A monument dedicated to oil workers in Taft, California.

Elizabeth Fladung

Looking beyond Sacramento, WSPA and other oil trade groups spent nearly $12 million on lawyers, consultants and fees to persuade Kern County officials to streamline the local permitting process, clearing the way for tens of thousands of new oil wells. Reheis-Boyd said WSPA wanted “regulatory certainty” and called the new system, which charges companies higher fees to help fund clean-air programs, a model for other oil-producing areas. Environmentalists, however, are challenging the measure in court, saying it circumvents the state’s landmark conservation law and doesn’t go far enough to protect residents who already breathe some of the dirtiest air in the nation.

The industry also is waging battles to roll back emission rules in Southern California and the San Francisco Bay Area. For millions of Californians, the stakes are high. Alejandro Valdez lives with his wife and two young sons in Wilmington, an industrial enclave near the Port of Los Angeles frequently enveloped in brown haze. Their bungalow borders the Phillips 66 refinery, which gives off odors so strong, especially at night, that “I feel like throwing up,” Valdez said. His older boy, Nathan, is lethargic and regularly gets nosebleeds and headaches. Noise deprives the family of sleep; some days, black smoke from flares fills the sky. Everyone has rashes. Valdez likes the neighborhood, loathes the hulking complex just across the fence. “I got a good price for the house,” he said, “but it’s not worth it.”

The biggest test of oil’s power could come this year, as Brown seeks legislation to save the state’s embattled cap-and-trade program, the linchpin of California’s climate-change efforts. The program, which requires companies to purchase permits in order to emit greenhouse gases, provides a key source of revenue for the state’s anti-pollution efforts, but the California Chamber of Commerce has challenged it in court, alleging that cap-and-trade is an unconstitutional tax, passed without the required two-thirds majority of the Legislature. To eliminate any uncertainty, the governor wants lawmakers to effectively bulletproof the program with a supermajority vote — a feat that will require support from the moderate Democrats who have bucked past climate bills. To win their votes, Brown will likely have to make concessions — and WSPA has long sought leverage to water down or eliminate a rule that requires oil companies to reduce the amount of carbon in their fuels. Brown and his aides insist they have the upper hand — more onerous pollution controls are on the table, they say — and have floated the prospect of a ballot measure to extend cap-and-trade if they fail in the Legislature. But such a fight with the oil industry would be expensive and risky, and if Brown loses, the defeat could have international implications for the fight against climate change; other countries, including China, see California’s system as a model.

For its part, DOGGR, the troubled oil and gas regulator, is in the midst of a multi-year “renewal plan,” dedicated to strengthening oversight of the industry and “changing the culture of enforcement” among state regulators, spokeswoman Teresa Schilling said. The agency has sponsored legislation that gives it more power to punish errant oil companies and by this week expects to have forced closure of more than 600 wells that were injecting production fluids and wastewater into protected aquifers, a key requirement under its federal agreement. (WSPA, CIPA and another trade group are challenging some of those closures in court.)

Still, more than five and a half years after Robert David Taylor’s death, DOGGR has yet to achieve a key objective: updating rules to regulate cyclic steaming. In a statement, Chevron called the accident “a tragic and isolated incident,” adding that it has “a long track record of safely conducting cyclic steaming in the Midway-Sunset Field.” Barred by state law from suing Chevron, Taylor’s family filed a lawsuit against a contractor who worked on the site and another oil company with nearby steam operations; the parties settled last summer. The sole regulatory action in the case remains the one taken by state workplace inspectors. They fined Chevron $350 for failing to inform employees in writing of “necessary safeguards” for working near Well 20, where Taylor was swallowed by a sinkhole. The incident, they said, was an “act of God.”

Jim Morris and Elizabeth Hernandez contributed to this story.



