The green jobs bust in California

Conn Carroll:

It was supposed to be the next big thing.

California built decades of broad-based prosperity from the Gold Rush, then Hollywood, then aerospace, and later Silicon Valley. At the turn of the century, "green jobs" were supposed to be the wave of the future.

"This is not just a challenge, it's an opportunity," then-candidate Barack Obama said during a 2008 presidential debate. "Because if we create a new energy economy, we can create 5 million new jobs, easily, here in the United States."

President Obama, of course, has completely failed to deliver on this promise of 5 million new green-collar jobs. The entire U.S. economy has created only 1.2 million jobs since Obama was sworn into office, many of them in the fossil fuel extraction, production and distribution sector.

But in Obama's defense, most of his green jobs agenda was killed. Cap-and-trade and renewable electricity mandates never made it through Congress. High-speed rail was killed off by governors in Ohio, Florida and Wisconsin.

But where the rest of the nation has rejected all or most of these proposals, California has embraced them all.

How is that going for them? For starters, California now has the highest gas prices in the country. As of the third week in February, the price of regular unleaded was 40 cents more ($4.15 per gallon) than the national average ($3.74).

There are two main reasons for this. First, California has special clean-air rules that essentially make the state a boutique gasoline market year-round. Second, thanks to other environmental regulations such as the California Environmental Quality Act, only 14 refineries are still operating in the state, down from 27 in 1980. As California's cap-and-trade program kicks in this year, the number of refineries will continue to go down, and the price of gasoline will continue to rise.

California already has some of the nation's highest electricity prices -- 39 percent higher than the national average -- and those will continue to rise as the state begins to enforce both its renewable energy mandate and cap-and-trade programs.

The cap-and-trade law will at least spare residential consumers and utility companies part of the added pain with rebates and special allowances. But it does so at the expense of businesses and manufacturers, who are simply are out of luck. Cap-and-trade will cost them about $1 billion a year, according to the California Chamber of Commerce.

And that comes on top of the renewable energy mandate, which requires all utilities to produce 30 percent of their electricity from renewable sources by 2020. It contains no rebates or loopholes. The mandate alone will drive up electricity rates for everyone by more than 13 percent, according to the Pacific Research Institute, as utilities are forced to buy more expensive electricity from renewable sources.

The California Public Utilities Commission's Division of Ratepayer Advocates has already estimated that 59 percent of all renewable energy contracts signed by utilities paid above-market prices for their renewable energy.

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California created a couple of thousand jobs with this scam.  Meanwhile Texas has created more than 26,000 jobs in oil and gas drilling alone, plus additional jobs in transportation of the fuel to market as well as refinery jobs and manufacturing jobs that are being created to deal with the glut of natural gas.  As a result of lower prices, Texas has a higher standard of living than California and it will grow that trend as Clarifornia keeps increasing its energy prices.