Campaign for Oil and Gas Extraction Tax Begins Signature Gathering in California

A proposed ballot initiative that would enact a tax on oil and gas extracted from California will be granted summary and title by the Office of the Attorney General today.

Californians for Responsible Economic Development, the group behind the measure, now has 150 days to collect 505,000 signatures if they wish to qualify it for the 2014 ballot.

In order to collect the signatures the campaign is taking a two-pronged approach, using both grassroots organizing and meeting with donors to raise money for paid signature gathering.

In the three months leading up to official summary and title, 109 volunteers from across California have signed up to help gather signatures in addition to the organizations supporting the bill. “As people learn about the benefits of CMED – decreased tuition, renewed cities and parks and job creation fueled by green energy – they are eager to sign on and help,” explains Jack Tibbetts, author and lead-proponent of the campaign.

The California Modernization and Economic Development Act (CMED) places a 9.5% tax on the oil and gas that’s extracted from California, and would bring in over $2 billion of new revenue to the state.

$1.2 billion would be allocated in four equal parts towards K-12, California Community Colleges, California State University and the University of California.

Another $400 million would be used to provide businesses with subsidies for switching to cleaner, cheaper forms of energy. The remaining $300 million will be allocated to county governments for infrastructure repair, public works projects, and funding public services.

The bill has already attracted the attention and support from a wide variety of interest groups and individuals, and touts a growing list of endorsements on their website ( In February, former US Secretary of Labor Robert Reich endorsed CMED stating. Using a tax on oil extracted from under California to help finance the education of Californians should be a no-brainer. It will only improve our schools. The real question is why California hasn’t done this long before now.”

Dr. Daniel Kammen, Nobel Prize recipient and co-author of Prop 87 (a similar measure on the 2006 ballot), wholeheartedly endorsed the proposal: “Placing a small surcharge on petroleum and gas that is extracted from California can only benefit our state. It would spur innovation on the producer side to reduce costs and bring in funds that are critically needed to green the economy, re-invest in education, and renew cities and parks. The California Modernization and Economic Development Act is the best way moving forward to ensure that all of these priorities are met.”

Last week, the California Modernization and Economic Act gained the support of State Senator Noreen Evans, who is currently sponsoring her own version of an extraction tax in the Senate, SB 241, to fund education and parks in California. She had this to say about the proposed ballot initiative: “The California Modernization and Economic Development Act closes a glaring corporate tax loophole in California that has benefited big oil for far too long. I absolutely support efforts that will allow California to collect on these vast and irreplaceable natural resource revenues that should fund one of the most important core services of government-education. It’s past time California ends the oil industry’s free ride and finally sets a solid revenue stream towards funding government’s education obligations.”

“Going forward, the CMED campaign will be working closely with the Senator’s office to ensure that an oil severance tax is enacted” said Tibbetts. “The campaign to qualify the California Modernization and Economic Development Act wholeheartedly supports Senate Bill 241 and we are encouraged by the efforts being made by Senator Evans. California is in critical need of netting additional revenue for education and other important services that will promote job growth and advance our people and our economy. However, just as oil companies have the right to extract and profit from our resources, California has the right to some compensation for the mineral wealth removed. Should the Senate fail to vote and pass SB 241, our campaign will work with public officials, donors, interest groups and students to produce an extraction tax for the 2014 ballot.”

The CMED Act: tax oil companies to provide quality education, aid cities, and create jobs

oil drilling california

In 2011 alone, California produced a grand total of approximately 200 million barrels of oil and 230 billion cubic feet of natural gas, making our state the fourth largest producer of oil and the tenth largest producer of natural gas in the country.

Yet, despite this, California does not get a dime for the resources that are extracted from our state and sold on the global market. This is because, unlike every other major oil and natural gas producing state in the nation, California has not enacted an extraction fee on the energy that is taken right from under our feet.

Let’s think about this for a moment.

California, the ninth largest economy in the world, is ranked 43rd in the country in terms of K-12 spending per pupil. The University of California, the flagship public university system of the nation, has seen a 14% decrease in funding since 2010.

And at a time when a quality college education has never been more important, tuition is skyrocketing, making a diploma unaffordable for an increasing number of young Californians. Meanwhile, at 9.8% unemployment, even those who have graduated from college find themselves without work or working at jobs they are tremendously over-qualified for. The appalling disrepair of our municipal infrastructure only discourages employers from bringing more jobs to our state. But our state government has its hands tied behind its back. The $250 billion dollar state debt all but assures that there will be no additional funding for education and infrastructure in the near future.

And we are giving away our oil and natural gas. We have the wealth to fund the investments that California needs and deserves and we are giving it away. This is to say nothing of that fact that by not charging an extraction fee on oil and natural gas, our state, which prides itself as a leader of reducing CO2 emissions, is not putting a price on the CO2 that eventually makes its way into the atmosphere. To say this is ridiculous would be an understatement. It is an outrage.

The California Modernization and Economic Development Act (or CMED) would put an end to it. By implementing a modest 9.5% extraction fee on oil and natural gas (Alaska, hardly an enemy of big oil, has implemented a fee of 24% on oil and natural gas that’s extracted from the state), CMED would raise between 2 and 2.5 billion dollars in revenue for California. A little more than half, 1.2 billion dollars, would be allocated in four equal parts for K-12, California Community Colleges, Cal State Universities, and the University of California for the purposes of increasing quality and restoring tuition to 2010 levels. 400 million dollars will be used to support small businesses by aiding their transition to cheaper, carbon-free and carbon-reduced forms of energy, which would in turn empower them to expand, hire additional workers, and reinvest. An additional 300 million dollars would be apportioned to the general funds of California County Governments for the purpose of upgrading and better maintaining municipal infrastructure, funding the conservation of regional park land and providing a multitude of other public services.

These are more than investments, they constitute a complete vision for responsible economic development in California. Making that vision a reality is as easy as ending the giveaway of our oil and natural gas, but it’ll take a popular movement if we truly want to realign the policies in Sacramento with the wishes and desires of Californians. Simply by taking a few moments, right now, and visiting, liking our Facebook, following us on Twitter, telling your friends or donating anything you can, even $5, you can provide the crucial grassroots support we need. It’s that easy. You could be the difference between failing to qualify and qualifying CMED on the 2014 ballot, so that Californians can have a chance to pass it democratically.

We can do this California, but not without your support. If you think it’s ridiculous that we are giving away our oil and natural gas at a time when California is more cash-strapped than ever, join our cause. It won’t be easy, but together we will qualify and pass the California Modernization and Economic Development Act and put our state back on the right track.