What a delicious bit of irony I found in OGJ (June 25, p. 10), with the letter "Another dry hole" from reader Max Edison placed just a few pages from the opinion piece "Californicus Energeticus."
Edison points out that the long history of OGJ editorials illustrates why the other 99+% of the country thinks the oil industry is anticonsumer. A few pages later Bob Williams spouts half-truths about the California energy situation, placing all of us Californians in the all-too-familiar fruit and nut category of people who are unwilling to grant the oil industry its obvious tithe.
The truth about the California energy situation is far more complex than Williams states. For instance, we have permitted power plants and two (total about 4,000 Mw) have come on stream since May 2001. Several more are due this year. Since power plants require more than a few weeks to build, it is obvious California has not been blocking things quite as Williams suggests.
For another instance, Williams does not mention that natural gas leaving Texas for California was costing several times (not several percent but several hundred percent) more than gas leaving Texas for New York.
A closer examination of the power deregulation history in California will show that the move was initiated by the power companies as a way of increasing the ROI on the power plants. Many of these were sold to other companies, but more than a few were spun off to themselves (the latter being a good way to describe selling to other branches of the same holding company.) SoCal Edison, PG&E, and San Diego G&E spent about $50 million lobbying and advertising to get this law passed.
Because anyone over the age of 6 years knew that the result would be a sharp rise in electric rates, the State insisted that price rises could not be automatically passed on to the consumer.
A smart business man would know that buying generating capacity under these conditions was a bad choice, since he would be locked into a bad situation. However, energy companies purchased them anyway. In the last year, they invented or discovered the use of the "unscheduled maintenance" shutdown as a way to force prices up and repeal rate controls. Now, having gotten caught with their hands in the cookie jar, the companies are complaining that Californicus Energeticus does not play the game by free market rules.
This is the kind of behavior that reader Max Edison was talking about in his letter.
Some Californians have been suggesting that what is sauce for the goose is sauce for the gander. Unlikely as it seems, Texans actually occasionally purchase items that come from California. It has been suggested that all goods leaving the state of California headed for Texas be subject to a 20 fold surcharge or tax. Such items might include items imported through the Port of Los Angeles bound for buyers in Texas. This includes Japanese automobiles (yes, Texans buy Toyotas and Nissans), consumer electronics, and television sets.
It also includes circuit boards and memory chips for Dell and Compaq.
Other items originating in the state include movies and TV programs from Hollywood (even readers of OGJ watch TV), agricultural products from the central valley (cotton, oranges, walnuts, almonds, and more), computers and software from Silicon Valley, California Wines, etc.
Sounds silly? Of course it's silly, but probably no more silly than your editorial. And it's no less inflammatory than the typical kinds of statement the man on the street hears from oil and gas companies.
Pay attention to Max Edison-he's right.
Geoff Dolbear
G.E. Dolbear & Associates
Diamond Bar, Calif.
