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California's environmental regulations cause economic blackout

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Mark Hemingway
Part four of a five-part series

California's pursuit of a radical environmentalist agenda has left both taxpayers and the economy in the dark. By regulating out new energy production, residents pay more for energy -- when they can get it.

In 2007, Newsweek proclaimed the Golden State "the greenest in the land, a place where environmentalism and hedonism can coexist." In the Natural Resources Defense list of the "five best green cities in America in 2009," three of them were in California.

In fact, the origin of the modern environmental movement and the creation of Earth Day are often said to have their origins in the 1969 Santa Barbara oil spill.

"Californians have largely treated environmentalism as a 'religious sacrament' rather than as one component among many in maximizing people's quality of life," note the editors of Trends magazine, commenting on California's decline.

Nowhere is this more evident than the state's hostility to energy production.

From 1990 to 1999, the state's capacity for energy production actually declined even as the population was exploding, resulting in a series of rolling blackouts in 2000 and 2001. This is often cited as a reason for California voters' decision to recall Democratic Gov. Gray Davis. (A 2003 Department of Energy report noted that a single blackout in Silicon Valley resulted in upwards of $75 million in lost business.)

Since then, attempts at building new capacity even through clean-burning liquified natural gas terminals and transmission lines for renewable wind power have met fierce resistance, notes Max Schulz in a 2008 City Journal article.

California is now implementing its own cap-and-trade policy, which it approved just last month. In 2012, utilities and large manufacturers will be issued finite permits for energy usage. In 2015, the policy applies to fuel producers.

The policy is all but certain to put the state at a huge competitive disadvantage economically. The state will lose jobs, even as touted emissions reductions are largely offset. California can only meet its power needs by buying energy out of state where there aren't draconian production restrictions.

On the local level, the problems of California's restrictive energy policies are increasingly apparent. In April of last year, Democratic Mayor Antonio Villaraigosa threatened to close the Los Angeles city government after the city Department of Water and Power withheld $73 million in payments to the city.

The DWP was retaliating against the city council for nixing a consumer rate increase to pay for the city government's mandate that 20 percent of L.A.'s energy come from renewable sources. Another of L.A.'s much touted environmental policies -- mandating "green" trucks in the city's ports -- is notoriously expensive and has spurred a legal challenge that may be headed to the Supreme Court.

The architect of both these policies was Nancy Sutley, former deputy mayor for energy and environment in Los Angeles. Despite her failed policies, she's now the head of the White House Council on Environmental Quality.

Meanwhile, Texas has taken the exact opposite approach. Texas is one of 15 states suing the federal government for imposing regulations on carbon emissions.

Under Bush, the Environmental Protection Agency ruled it did not have regulatory authority over carbon emissions, finding that carbon emissions are not a harmful pollutant, and the effects of global warming are highly debatable.

But the more liberal Obama administration is ratcheting up federal controls. The EPA has now announced its intention to take control of the state's emissions permitting system in 2011. Currently, 167 job-creating projects in Texas are frozen by EPA's threat of a construction moratorium.

Texas has jobs, plenty of energy and sensible environmental controls. Instead, the White House is looking at California's failures as a model for the rest of the country.

Mark Hemingway is an editorial page staff writer for The Examiner. He can be reached at mhemingway@washingtonexaminer.com.

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