California’s decoy carbon capture bill shut down following Capital & Main report

State senator cites story, which revealed oil lobbyist’s misleading tactics.

By Aaron Cantú, Capital & Main

This story is produced by the award-winning journalism nonprofit Capital & Main and co-published here with permission.

A California state senate bill meant to clarify rules for carbon capture and storage was pulled from further consideration last week — in the wake of a Capital & Main report that the legislation was part of a possible ruse by the fossil fuel industry to roll back pipeline safety rules, according to an oil and gas lobbyist who described the scheme. SB 438, carried by Sen. Anna Caballero (D-Merced), purports to shield companies from penalties if they produce oil while injecting carbon into the ground — which would run afoul of California’s law on carbon capture.

A lobbyist had said that the bill would later be altered to allow the construction of carbon pipelines in California before federal safety rules are implemented.

In her comments, Caballero pushed back against Capital & Main’s reporting, which she stated was “filled with misleading information and incredulous accusations.”

“In no way shape or form am I going to allow any lobbyist or industry to hijack my bill for their own use,” the senator said. “This is not how I conduct my business, and my time in the Legislature has shown that I engage in a transparent and collaborative manner.”

Capturing and burying carbon dioxide — the main greenhouse gas heating up the planet — is viewed by fossil fuel industries, some climate policy experts and international organizations such as the U.N. as a necessary tool to fight the worsening climate crisis.

But the extent to which it should be used is disputed. Critics point out the technology captures far less CO2 than is emitted by fossil fuel infrastructure. They also warn it is being used to prolong the use of oil, gas and coal, which scientists say must be phased out as quickly as possible to limit ongoing damage from climate change.

Environmental justice groups also say that pipelines transporting carbon are dangerous. CO2 would be sent from urban refineries and gas power plants to depleted oil and gas fields in the Central Valley, which geologists say are ideal for storing carbon. But this could expose communities near pipelines to CO2 leaks. The gas asphyxiates people and animals and can stall vehicles responding to mass emergency events.

In an interview, Theo Pahos, a lobbyist whose firm’s clients include gas power plant company Calpine and the California Independent Petroleum Association, told Capital & Main that he and unnamed others came up with an idea to deceive lawmakers and environmentalists through Caballero’s bill.

He described how carbon capture advocates hatched a plan to push Caballero to alter the legislation before it was considered by the State Assembly’s Natural Resources Committee. The lobbyists’ real intention, Pahos explained, was to use the bill as a placeholder and later replace its language with a proposal to rescind a moratorium on intrastate pipelines. The moratorium is currently in place until a federal agency finalizes safety rules.

“To alleviate the concerns that have been circulating about the future intent of this bill, I have decided to ask the chair to hold the bill today to make it a two year bill,” Caballero told Assembly lawmakers in a hearing of the chamber’s Natural Resources Committee on June 26.

Making it a two-year bill means the legislation will be up for consideration again in 2024. Since California’s legislative session unfolds in two-year intervals, lawmakers can choose to withhold a bill introduced in the first year, usually if they don’t think it has the votes to pass.

Caballero carried a bill last year that resulted in California’s carbon capture regulations. It was part of a package that codified into law the state’s 2045 goal of achieving carbon neutrality — meaning California will emit an equivalent amount of warming gases as it removes from the atmosphere. Caballero voted for this legislation as well as setbacks between oil wells and homes.

This year, Caballero missed a vote on a key bill for corporate emissions disclosures and another to divest pension funds from fossil fuels, eliciting criticism from a watchdog group. She’s received $3,000 from ExxonMobil since 2019; last November, she refunded a $1,500 contribution from the company. Luiz Quinonez, her chief of staff, said it was refunded because Caballero isn’t accepting fossil fuel industry contributions.

Assemblymember Luz Rivas (D-San Fernando), who chairs the Natural Resources Committee, said she sat down with Caballero to discuss Pahos’ allegations after Capital & Main contacted Rivas’ office for comment.

“You said that that was not your intention, to gut and amend this bill to do something [contrary to what] we agreed to in a deal last year as part of the climate package, which has to do with pipeline safety,” Rivas said to Caballero.

Although Caballero pledged to bring the bill back up again next year, she also described “unresolved issues” around pipeline safety and “unitization,” a reference to surface and mineral rights as they pertain to pipelines. Caballero said she has been working with the Newsom administration to draft legislation addressing those issues.

‘We’ve been working on that, with all the stakeholders, but that was not [SB 438],” Caballero said.

The sole witness to speak on the bill, environmental lawyer Dan Ress with the Center on  Race, Poverty and the Environment, testified that the moratorium was a key part of the legislative deal that resulted in the carbon capture law.

“We appreciate the senator pulling the bill for this year, and look forward to being added to the group of stakeholders engaged as you’re talking about pipeline safety,” Ress said.

Copyright 2023 Capital & Main

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