Consumer Federation of California

SACRAMENTO ‘ Perhaps you’ve seen oilman T. Boone Pickens on television advertising the "Pickens Plan" for alternative energy, urging Americans to wean themselves from foreign fuel by adopting natural gas and wind power.

Pickens has another plan he isn’t advertising and from which he also stands to profit. He wants Californians to borrow $5 billion to invest in natural gas and alternative energy by voting yes on Proposition 10 on the November ballot.

The Texas billionaire is the founder of Clean Energy Fuels Corp. of Seal Beach, a company that provides natural gas to fleets of vehicles, including Los Angeles garbage trucks and Oakland airport shuttle buses.

More than half of the $5 billion would be disbursed as rebates to people and companies that buy more efficient cars and trucks. Most of that rebate money is dedicated to heavy-duty trucks and vans, the kinds of fleet vehicles that are potential customers of Pickens’ company.

The firm has so far spent $3.8 million to qualify and promote the initiative.

So far, financial support for the measure has come almost entirely from his company and two other natural gas businesses. State records show no money raised by opponents, which include the California League of Conservation Voters and the Sierra Club.

Few types of passenger vehicles now on the market would qualify for the rebates besides those that burn natural gas, such as the Honda Civic GX. Such vehicles are impractical for many Californians because there are only roughly 100 natural gas refueling stations in the state open to the public, according to the California Energy Commission.

But the initiative would allocate $25 million for rebates for home refueling stations. Clean Energy Fuels Corp. paid $17 million this month to buy a Canadian company that makes such refueling devices.

Consumer Federation of California executive director Richard Holober said most hybrid vehicles, which run on either electricity or gasoline, would not qualify for rebates under Proposition 10 except for the Toyota Prius, which gets the unusually high 45 miles per gallon.

"That will get you a $2,000 rebate," Holober said at a recent legislative hearing on the ballot measure. "A natural gas Honda Civic which is purely natural gas-fueled gets you at least a $10,000 rebate, even though the state of California’s website rates them as identical in clean air standards and the Prius is much more energy-efficient."

"Clearly this is an attempt to distort the market for one particular product," he said.

A Clean Energy Fuels Corp. official who helped write Proposition 10 countered that notion. Todd Campbell, a former Burbank mayor and clean-air activist who now works as Clean Energy’s director of public policy, said cars that use no gasoline at all deserve bigger rebates.

He noted that several new types of qualifying cars will probably be on the market within the five years Proposition 10 establishes for distribution of the rebates, including electric cars from General Motors and Mitsubishi and a hydrogen car from Honda. The only electric car now on the market that would qualify for a Proposition 10 rebate is the $100,000 Tesla Roadster.

California imports most of its natural gas from Canada and the Rocky Mountain states. It costs less than gasoline and emits significantly lower quantities of particulates, toxins and the compounds that produce smog and contribute to global warming.

At a recent legislative hearing on the initiative, people who acknowledged that they were paid to endorse Proposition 10 said the measure would foster independence from foreign oil and cleaner air in California.

Alan Henderson, former American Cancer Society president, said 57% of Californians live where air quality is considered harmful by national standards.

"We need to act now to invest in cleaner technologies to clean our air by reducing the toxins that cause asthma and lung disease and we believe contribute to cancer," he said.

Opponents say there is no guarantee that Proposition 10 will help clean the air. They note that the measure does not require car or truck buyers who get rebates to destroy their older, dirtier vehicles or to keep the new cleaner-running vehicles in California.

Proposition 10 campaign consultant Marty Wilson said the California Air Resources Board could choose to write regulations to prohibit rebated vehicles from being taken outside California. But the initiative does not address the issue.

Some opponents of Proposition 10 say the state is already too burdened by debt to take on $5 billion more for a short-term program.

California usually borrows to build things — roads, aqueducts, courthouses — that will last longer than the time it takes to retire the debt. According to the Legislative Analyst’s Office, Proposition 10 would cost $5 billion in principal and $5 billion in interest over the next 30 years, yet the initiative states that the money should be spent within 10 years.

Annual debt payments would require $335 million a year in taxpayer money.

"We’re borrowing long-term," said Lenny Goldberg, executive director of the California Tax Reform Assn., "for stuff that is questionable and is distinctly short-term."