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Facts About BIG OIL and California

Our schools and other vital public services are in grave danger. Many SEIU Local 99 members are doing their part with furlough days, reduced hours and more. It's time for the big oil companies to do their part too!

California is the only major oil producing state in the nation that does not tax oil companies when they extract petroleum from beneath our land and water.

Both the State Assembly and Senate budget proposals include a tax on big oil that will raise at least $1.2 billion to help balance the budget without devastating cuts.

While the rest of the California economy is suffering, Occidental Petroleum's profits nearly tripled in the first quarter of this year!

Join hundreds of SEIU members and other community members as we stand up to the oil lobby and tell them to do their part!

To learn more about getting involved, sign up for mobile alerts by texting "REBUILD" to 787753.

FACTS ABOUT OIL DRILLING IN CALIFORNIA
  • There are 22 major oil producing states in the United States. California is the only one that has a loophole allowing oil companies to extract oil tax-free. [1]
  • Alaska taxes oil extraction at 25%, which Sarah Palin advocated for when she was governor [2]; Louisiana collects severance tax and royalties that amount to 22%. The federal government charges a royalty of 18.75% on oil drilled more than three miles off the California shore, but in California and its waters, the extraction tax rate is 0%. [3]
  • The top four oil producers in the State of California, Chevron, ExxonMobil, Shell, and Occidental made more than $45  billion in profits in 2009 – and that was a bad year.  [4] In 2008, these four companies made $106 billion in profits.
  • The CEO of Occidental made $148.7 million last year in salary and stock options. [5]
  • According to oil economists, California refineries buy oil on the world market, so increasing California’s severance tax would have no effect on gas prices in California. [6]
  • The profit on oil pumped in California is $45 per barrel; [7] California producers will not be shutting down their oil drilling operations if we close the drilling tax loophole.
  • According to a study by the University of California, closing the oil extraction loophole would result in just 400 lost jobs. [8] An all-cuts budget, on the other hand, would result in 430,000 lost jobs. [9]


[1] “California Needs an Oil Severance Tax,” Senator Loni Hancock, June 29, 2009, http://dist09.casen.govoffice.com/index.asp?Type=B_PR&SEC={42B6205A-0002-4B2A-8F1D-300E16EEBB0E}&DE={3A6DA952-7D95-4AAA-855E-BF94877A8E86}
[2] Los Angeles Times, June 15, 2009, http://www.latimes.com/business/la-fi-hiltzik15-2009jun15,0,679458.column
[3] “Refuting Oil Industry Lies About the California Severance Tax,” California Progress Report, July 6, 2010, http://www.californiaprogressreport.com/site/?q=node/7925
[4] Chevron annual report 2009, p. 10.; “Consolidated Statement of Income,” Shell Annual Report 2009. ; Exxon Mobil Annual Report 2009, p.38.; Occidental Petroleum Corporation Annual Report 2009, p.1. 
[5] Wall Street Journal, http://online.wsj.com/article/SB10001424052702303338304575155893241220422.html
[6] Los Angeles Times, June 15, 2009,http://www.latimes.com/business/la-fi-hiltzik15-2009jun15,0,679458.column
[7] Wall Street Journal, April 28, 2010, http://online.wsj.com/article/PR-CO-20100428-904760.html
[8] “The Economic Consequences of Proposed California Budget Cuts,” UC Berkeley Labor Center, Jacobs, Lucia, and Lester, May 2010, http://laborcenter.berkeley.edu/californiabudget/budget_impact10.pdf
[9] The California Jobs Budget, Speaker John A. Perez and Asm. Robert Blumenfield, http://laborcenter.berkeley.edu/californiabudget/budget_impact10.pdf