No On 87! Larry I am a petroleum engineer having worked in the business since 1977.  this is my perspective on prop 87. 1)  I have heard/read statements that producers pay no production taxes such as the severance tax paid in Wyoming and Texas.  This is not true.   Ca. Producers and royalty owners  pay an ad valorem tax on production.  This is based on value of future production and future expenses discounted to the present and then a taxed as a percentage of that value.  It is the equivalent of a severance tax.  The Navajo nation has a similar tax on production from tribal lands in Utah.  The tax is paid to the county from which production is derived.  Kern County makes millions each year from this tax.  SO the prop 87 becomes a form of double taxation.

2)  The State Lands Commission also collects a royalty from production derived from state lands such as that at Huntington Beach and Long Beach  This royalty can be as high as 25%.  So again 87 tax is a tax over and above what the state already gets.

3) The proponents seem to think only Exxon and Chevron will be taxed.   The majority of oil produced in the US comes from small independents.  Independents of which there are dozens in CA, tend to operate marginal fields with low volume producing wells.  I would bet the average well for these companies makes less than 20 bopd.  It is these economically marginal wells that will be hurt by this 87 tax. Taking away another 5 or 6% profit through taxation will in effect cause these wells to be left shut in upon the next mechanical failure as it is no longer profitable to fix and operate.   This shut in oil will then have to come from out of state or out of country.  Prices will go up whether the tax is passed along or not.

4) Exxon's profits are usually brought up in a pro 87 discussion. I find it interesting that a worldwide company the size of Exxon has a 10B profit with little Ventura county's AMGEN making around 3 B.  So in this regard I view 87 as little more than a "feel good" tax.

5) the "research" that this is supposed to fund is already well understood technology. The public has already proven they will not buy this technology.  RE how many houses have solar, how many new suv's are bought each yr in CA vs. the honda Prius??  The point is until there is an economic incentive, and I mean a very dramatic incentive, any "new" technology will not be embraced by the avg. Californian because they have to pay for it and have already shown they won't.

I find it interesting that Brazil has been used as an example of a country achieving energy independence.  Perhaps the proponents are unaware of the offshore Brazil  oil production developed in recent years or the amount a rain forest destroyed and used as fuel or farmland.

6)  If CA REALLY wanted to cut emissions, and energy consumption, a simple law could be passed that says no new car sold in CA can have more than 150 HP, period.  No new technology required.    This of course violates our sense of personal freedom of choice and CA will not vote for that.  SO lets pass a "feel good" tax that allows us to pretend we are actually doing something constructive and forces someone else, particularly those nasty oil companies to PAY...

Atlas will shrug.

L Martinson
Ojai.