Chevron CEO avoids fray on Prop. 23

Andrew S. Ross
Thursday, October 7, 2010

Proposition 23 on the November ballot would freeze implementation of California's carbon emissions reduction law (a.k.a. AB32) until the state's unemployment law falls below 5.5 percent.

Or, more realistically, in the view of some, until hell freezes over.

Here's an exchange on the subject with Chevron Corp. CEO John Watson.

"Prop. 23 - For it? Against it?"

"We stayed out of it. We're neutral on Prop. 23."

"Personally, you think it's a good idea?"

"We stayed out of 23." (audience laughter)

"Come on, take a stand here" (more laughter).

"We'll let the voters decide because it's their call."

"Why stay out of it? Obviously it has an enormous effect on your industry. Shouldn't people look to you for guidance on whether this is the way to do it or not the way to do it?"

Views from the West: Not letting the head of California's largest corporation off the hook was Alan Murray, deputy managing editor of the Wall Street Journal.

The one on one with Watson, at the Sharon Heights Golf & Country Club in Menlo Park on Wednesday, marked the premiere of "Viewpoints West," a Bay Area addition to the Journal's "executive breakfast series" of interviews with top U.S. corporate executives (sfgate.com/ZKKB).

Among other highlights of the 45-minute give and take:

Despite his oil and gas company's increasing investments in cleaner sources - in biofuels, solar energy and especially natural gas - Watson said he foresees "a long path of transition to new fuels - think generations."

He called President Obama's energy policy a "mixed bag" and appeared to endorse the "anti-business" label other corporate executives have hung around Obama's neck. The administration seemed to be "going after industries, one at a time. There's a lot of anxiety out there," he said.

"Particularly invidious" to Watson was legislation, supported by the administration but stalled, probably for good in Congress, that would end certain tax credits, deductions and deferrals for U.S. companies that move jobs overseas.

Back to Prop. 23 versus AB32.

"We understand the concerns about greenhouse gas emissions," he said, successfully avoiding being put on the spot. "Our approach is to work with the state, to try to put in place a system that will achieve the objectives over time, do so fairly ... and don't have unintended consequences.

"California has lost a third of its manufacturing jobs in the last decade," he said. In addition to the recession and foreign competition, "there are lot of reasons for that: high taxes, high regulations, high costs. And this will be another regulation, one that will need to be put in place thoughtfully, so it doesn't drive manufacturing business out further.

"We'll see when the (AB32) regulations come out."

Of course, that would all be moot should Prop. 23 pass. How then, I gamely asked, seeking to ask the question another way, does he and Chevron view the possible upending of AB32?

"We're neutral on Prop. 23," he answered.

View from the world: Weighing in on Prop. 23, the Euro-centric German Marshall Fund of the United States asks, "Why is this one-state exercise in direct democracy so important to those not living in the state?"

Answer: "On environmental policy, where California goes, so goes the United States and, at times, the world," writes Thomas Legge, program officer with the fund's Climate & Energy Program, in a recent online "transatlantic take" note.

"Laws in Europe have provided regulatory certainty to stimulate a rapidly growing renewable energy sector," notes Legge, whose nonpartisan think tank, named after Gen. George Marshall, author of the Marshall Plan, was financed initially by the post-World War II West German government.

"European companies, among the largest investors in the U.S. renewable energy market, are worried about the potential signal that passage of Proposition 23 could send."

The view from D.C: Expect the topic to come up during Hillary Rodham Clinton's appearance at San Francisco's Commonwealth Club next week.

"Climate change, American leadership, and the future of women" are the announced topics of the U.S. secretary of state's address at San Francisco Marriott Marquis on Oct. 15.

The 1,200 seats are already accounted for, I'm told, but in case there's room for more, check in at www.commonwealthclub.org.

Blogging at sfgate.com/columns/bottomline. Facebook page: sfg.ly/doACKM. Tweeting: @andrewsross. E-mail: bottomline@sfchronicle.com.

This article appeared on page D - 1 of the San Francisco Chronicle Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/10/06/BUK51FOJAC.D...


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