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Analysis: Big Issues Await Rubio In New Job As Oil Industry Lobbyist

Mar 4, 2013

Former State Senator Michael Rubio speaks at an event in Bakersfield in 2012.
Credit Joe Moore / Valley Public Radio

When former state Senator Michael Rubio begins work in Sacramento Monday as government relations manager for Chevron, he'll arrive to a full slate of issues involving the oil industry.

While state law prohibits ex-elected officials from registering as lobbyists for one year after leaving office, Rubio is expected to sidestep that provision by assuming a management role with the oil giant. 

The company told the Sacramento Bee that the Shafter Democrat will be "supervising a team of legislative and regulatory analysts and advocates in Sacramento."

So what issues might be on Rubio's new agenda?

At the top of the list will likely an issue very familiar to Rubio, reforming the state's primary environmental law, the California Environmental Quality Act, also known as CEQA. Until last week, Rubio was the leading lawmaker behind a push change CEQA, which some business groups say hurts economic growth. Last year, Rubio led an effort change the law, only to have the bill die at the end of the legislative session. This year, he renewed his call for a "standards based" approach to evaluating the impacts of proposed developments under the law, and had planned to introduce a new bill on the issue last week.

With Rubio's departure, and the lack of support from Senate President pro Tem Darrell Steinberg, the "standards based" approach to CEQA reform appears unlikely to move forward. But dozens of other bills also seek to make changes to the 43-year-old law. Last week, Steinberg introduced SB 731 a less-drastic reform measure that would streamline the often lengthy CEQA review process, and presumably reduce last minute lawsuits against projects. 

Oil Severance Tax
A bill by Democratic State Senator Noreen Evans would tax oil production in the Golden State, something known as an oil severance tax. The bill, known as SB 241, would raise about $2 billion and would support state parks and higher education. The "severance tax" of 9.9 percent would be charged on all oil extracted from the ground in the state. Other oil producing states like Texas and Alaska have their own severance taxes. 

In California, voters rejected a similar tax that would have funded alternative energy, and another proposal from Evans failed in 2009 in the legislature. One key obstacle: any new effort to levy the tax would require a two-thirds supermajority of lawmakers to win approval. For the first eight weeks of 2013, the Democratic Party held supermajorities in both the state Assembly and the state Senate. But when Rubio resigned, that put the majority party just below the two-thirds threshold in the Senate, at least temporarily. 

Fracking Regulations
Late last year, the state's Division of Oil, Gas and Geothermal Resources issued a "discussion draft" of proposed new regulations on hydraulic fracturing, also known as "fracking." The technique is used throughout the oil and gas industry to stimulate well production, through the injection of water, steam or chemicals into existing wells. Environmental groups have raised concerns about how the practice could lead to possible groundwater contamination, air pollution and other related issues. Industry officials insist that it is safe and responsibly managed.

The draft regulations call for new well testing procedures and disclosure requirements. But the rules don't require companies to release the contents of fracking chemicals when those formulas are considered "trade secrets." Environmental groups also say the reporting requirements in the proposed rules don't go far enough in alerting the public about when and where fracking will take place.  At least one group has filed suit against the state over the issue.

While the new regulations remain in draft form, the Department of Conservation last week began a series of public meetings to gather further input into the rules. The next meeting is scheduled for Bakersfield's Four Points Sheraton on March 13, 2013.

While the Division of Oil and Gas has the authority under existing law to introduce new rules on fracking, the legislature is also pursuing the issue on its own. Earlier in February, lawmakers held a hearing on the controversial technique, and last week, two new bills were introduced on the issue. AB 982 by Assemblymember Das Williams calls for operators to develop a groundwater monitoring plan for wells, and to disclose their plans for how to dispose of wastewater used in the fracking process. Another bill, SB 395 by state Senator Hannah-Beth Jackson would define the water used during fracking as a hazardous substance, and would require new regulations on its use.