I guess the Terminator isn't so tough after all.

The storm of controversy now raging in California about the Governor’s proposed inclusion in the state’s budget of the first new offshore oil leasing within the state’s three-mile state waters did not start overnight.

The history of oil drilling in California had already experienced its share of hundreds of big accidents, nasty political payola scandals, and assorted oily messes when in 1969, a loss of well control on Union Oil's "Platform A" in federal waters fractured the seafloor. Dead wildlife was piled high on tarred beaches, the region's economy was decimated for years, and the somber silence of the waveless black ocean still haunts local residents. Then-president Richard Nixon was so moved by the Santa Barbara disaster that he set aside a section of federal waters off of the City of Santa Barbara "in perpetuity" as a symbolic compensation to local residents.

But in February of this year, shortly before leaving office, former president George W. Bush decided that "in perpetuity" meant only until 2009, and proposed leasing Nixon's sacrosanct Hickel Preserve for slant drilling and offshore oil development. The oil drilling proposal for the Hickel Preserve is now under review by Interior Secretary Salazar.

Offshore drilling advocates pretend they can make drilling safe, but we know that this is a promise they cannot keep. After Santa Barbara dug itself out from their 1969 spill debacle, the oil industry had solemnly promised that they had "new technology" and that nothing like the Santa Barbara Blowout could ever happen again. Then, in 1997, in Santa Barbara's federal waters, another production rig, Platform Irene, suffered what became known as the "Torch Spill", killing over 700 seabirds, with oil washing ashore at SurfBeach and Vandenberg Air Force Base.

In February of 2009, the California State Lands Commission voted against allowing the first new oil leasing in the state's waters in forty years. The State Lands Commission's concerns included the unenforceability of the promised end date for the existing Platform Irene and other infrastructure, and the dangerous precedent that would be set for opening new leases in the state's protected "California State Tidelands Sanctuary".

Yet here we go again. Last week, Governor Arnold Schwarzenegger, emerging from a closed-doors Budget negotiation with the leadership of the California State Legislature, claimed to have reached an agreement, which has not yet been made public, to allow Plains Exploration to proceed with the acquisition of the much-sought new state leases.

This scenario is not, to put it mildly, going over well with the citizens of California, nor with most of the state's legislators who were not part of the Budget negotiations, particularly coastal legislators. To complicate matters further, Governor Schwarzenegger had previously rejected legislative proposals during this session to impose an extraction tax on all oil developed in the state, something routinely done by virtually every other oil-producing state, and a mechanism which would have brought vastly more money into state coffers.

This controversy has now turned into a national news story. The charismatic governor who ran television campaign spots showing himself cloaked as an environmentalist Republican movie star who would be dedicated to protecting his state's coastline and it's vibrant coastal-dependent economy from Big Oil seems to have changed his mind. The legacy of Governor Schwarzenegger may not be one of environmental stewardship, but of caving in to Big Oil when the chips were down. Tragic.

NRDC and dozens of California environmental organizations strongly oppose including in this latest state budget deal a proposal to allow the first new offshore oil drilling in state waters in over 40 years. Not only is it a bad decision for the marine life and ocean beaches that are central to California’s economy and natural heritage, but it also fiscally irresponsible.

While the precise language of this deal has not been released for public review, it is our understanding that it overrides the State Lands Commission’s legitimate denial of this project, creates an ad-hoc commission dominated by gubernatorial appointments, instructs this commission to find that the lease is in the best interest of the state, and gives the public a mere 5 days of notice prior to a hearing.

In other words, five people (Governor Schwarzenegger and leaders of the Senate and Assembly) met behind closed doors and overturned a decision made by a public commission after an open and public process.

This deal also fails to include any specifics on royalty payments that are supposed to be the rationale the administration has given for approving this agreement in this most unprecedented manner.

If the administration is serious about providing additional revenue for the budget, it should impose an oil severance tax. Every oil-producing state, including Texas, Oklahoma, and Alaska, already has this kind of tax.

If California passed the same measure, it could provide close to $1 billion in revenue this fiscal year. This dependable, annual source of state revenue makes far more sense than what the administration has chosen: a $100 million advance loan from PXP that must be repaid within three years.

No California governor since the massive 1969 oil spill, either Republican or Democrat, has supported new offshore drilling in state water. Governor Schwarzenegger should not be the first to break with this honorable tradition, especially when there are better options for raising state revenue.

The State of California wisely has decided to use a portion of its abundant natural resources to pay for services to its citizens. The agreement reached between the California Governor's office and legislative leaders will generate $100 million this fiscal year as a down payment on an estimated $1.8 billion in state royalty payments over the life of the project. These funds will help to defray the state's budget shortfall as well as increase America's energy security.

It's unfair to characterize the state's decision to approve this project as a trade-off between economic development (and revenues to the government) and the environment. The facts show that Californians can have both. States that have significant oil and natural gas production are in much better financial condition than their counterparts. Last year the U.S. Department of the Interior collected and distributed to states and the American people nearly $25 billion from oil and natural gas activities. California received more than $103 million for its onshore and offshore natural resources with about 85 percent of the revenues stemming from oil and natural gas production.

Offshore production in California and elsewhere in the United States has been occurring without major incident during the past three decades. Today, oil and natural gas workers are producing energy on some 4,000 offshore rigs and platforms in U.S. waters using advanced technologies and stringent environmental practices. As evidenced in 2005 when two back-to-back hurricanes blew through the Gulf of Mexico, the offshore industry has proven it can produce oil and natural gas safely without significant spills. The U.S. Outer Continental Shelf produces more than 1 million barrels of oil per day. Since 1980, less than 0.0001 percent of that has been spilled--far less than the oil released into the ocean from natural seeps.

The Minerals Management Service (MMS) estimates that 10.5 billion barrels of oil exist off California's coast with additional resources believed to exist in state waters. Overall, an estimated 86 billion barrels of oil and 420 trillion cubic feet of natural gas are believed to be in the Outer Continental Shelf along America's coastlines. This oil and natural gas could provide enough energy to heat more than 137 million households for 50 years. Additionally, a recent study by ICF International found that opening areas that have been off-limits to energy development could generate $1.7 trillion for state, federal and local governments and create thousands of well-paying jobs.

The nation's offshore oil and natural gas resources represent a tremendous opportunity, particularly during these difficult economic times. California should be commended for its decision, and other states as well as the federal government should allow additional oil and natural gas leasing that will help Americans reap the benefits of their offshore energy reserves.

First of all, let me be the first to welcome California as the charter member of “Government Spenders Anonymous.” California’s recognition that it operated in a separate reality from economic reality and its willingness to actually earn money through the collection of royalties from economic activity is a giant step toward sanity.

California and the U.S. have one of the cleanest environments in the world. The oil industry has the best safety record in the world. U.S. companies spend over $250 billion annually on environmental protection. Yet for decades, California, the U.S. Congress and environmental groups have used environmental laws to de-industrialize our economy. Fifty years ago manufacturing was 40% of our GDP, today it is around 12%. That is a lot of jobs lost and while the use of environmental laws to trump all other laws is not the sole reason for the job loss, it is a big part of it. The bans on drilling, while only part of the problem, are very illustrative of a mind set that wants to de-industrialize the U.S. without any concern for American jobs.

Let me provide one simple illustration. The Chamber started “Project No Project” to explore how much economic development is lost by the use of environmental laws to kill just energy projects in the U.S. The statistics are frightening. In the last several years approximately 350 energy projects were killed or substantially delayed by the use of environmental laws and 149 of these were renewable projects. The total value of the private sector financing that was not invested is over ½ trillion dollars and the American worker lost out on the creation of over 250,000 jobs. You can find all the details state-by state at: www.projectnoproject.com. What is more frightening is that 18 of these projects were renewable projects in California. The attacks on these projects cost California $9 billion in private investment and over two thousand good paying jobs at the facilities.

So as to California’s willingness to allow oil drilling, that is great. What is unfortunate is that it took the state coming face to face with economic death before deciding that it must search for reason in the operation of government. California stands to gain $1.8 billion in royalties but it will gain much more. Jobs will be created and workers will pay taxes to the state and local governments. These workers will be better able to support their families, pay their mortgages and purchase products; all of which will help the economy.

If we allowed drilling in the entire OCS the U.S. would generate $1.8 Trillion in royalties. The job creation and economic development associated with the drilling would add $10 Trillion to the U.S. economy.

The federal, state and local governments of the U.S. need to understand that we can protect our environment while creating jobs for our people and generating revenues for the government. Hopefully the silver lining in the California mess is that this will be the one time California starts a trend that results in greater economic activity. Environmental laws are very important and they must be enforced but reason must prevail because in the end we are trying to run a country of 300 million people who need jobs, energy food, products and a high quality of life. None of these benefits can be achieved if the U.S. is bankrupt.

So thank you California for throwing off the shackles of failure and most of all, thank you for being the charter member of “Government Spenders Anonymous.”

California and the U.S. have one of the cleanest environments in the world. The oil industry has the best safety record in the world. U.S. companies spend over $250 billion annually on environmental protection. Yet for decades, California, the U.S. Congress and environmental groups have used environmental laws to de-industrialize our economy. Fifty years ago manufacturing was 40% of our GDP, today it is around 12%. That is a lot of jobs lost and while the use of environmental laws to trump all other laws is not the sole reason for the job loss, it is a big part of it. The bans on drilling, while only part of the problem, are very illustrative of a mind set that wants to de-industrialize the U.S. without any concern for American jobs.

Let me provide one simple illustration. The Chamber started “Project No Project” to explore how much economic development is lost by the use of environmental laws to kill just energy projects in the U.S. The statistics are frightening. In the last several years approximately 350 energy projects were killed or substantially delayed by the use of environmental laws and 149 of these were renewable projects. The total value of the private sector financing that was not invested is over ½ trillion dollars and the American worker lost out on the creation of over 250,000 jobs. You can find all the details state-by state at: www.projectnoproject.com. What is more frightening is that 18 of these projects were renewable projects in California. The attacks on these projects cost California $9 billion in private investment and over two thousand good paying jobs at the facilities.

So as to California’s willingness to allow oil drilling, that is great. What is unfortunate is that it took the state coming face to face with economic death before deciding that it must search for reason in the operation of government. California stands to gain $1.8 billion in royalties but it will gain much more. Jobs will be created and workers will pay taxes to the state and local governments. These workers will be better able to support their families, pay their mortgages and purchase products; all of which will help the economy.

If we allowed drilling in the entire OCS the U.S. would generate $1.8 Trillion in royalties. The job creation and economic development associated with the drilling would add $10 Trillion to the U.S. economy.

The federal, state and local governments of the U.S. need to understand that we can protect our environment while creating jobs for our people and generating revenues for the government. Hopefully the silver lining in the California mess is that this will be the one time California starts a trend that results in greater economic activity. Environmental laws are very important and they must be enforced but reason must prevail because in the end we are trying to run a country of 300 million people who need jobs, energy food, products and a high quality of life. None of these benefits can be achieved if the U.S. is bankrupt.

So thank you California for throwing off the shackles of failure and most of all, thank you for being the charter member of “Government Spenders Anonymous.”

First of all, let me be the first to welcome California as the charter member of “Government Spenders Anonymous.” California’s recognition that it operated in a separate reality from economic reality and its willingness to actually earn money through the collection of royalties from economic activity is a giant step toward sanity.

California and the U.S. have one of the cleanest environments in the world. The oil industry has the best safety record in the world. U.S. companies spend over $250 billion annually on environmental protection. Yet for decades, California, the U.S. Congress and environmental groups have used environmental laws to de-industrialize our economy. Fifty years ago manufacturing was 40% of our GDP, today it is around 12%. That is a lot of jobs lost and while the use of environmental laws to trump all other laws is not the sole reason for the job loss, it is a big part of it. The bans on drilling, while only part of the problem, are very illustrative of a mind set that wants to de-industrialize the U.S. without any concern for American jobs.

Let me provide one simple illustration. The Chamber started “Project No Project” to explore how much economic development is lost by the use of environmental laws to kill just energy projects in the U.S. The statistics are frightening. In the last several years approximately 350 energy projects were killed or substantially delayed by the use of environmental laws and 149 of these were renewable projects. The total value of the private sector financing that was not invested is over ½ trillion dollars and the American worker lost out on the creation of over 250,000 jobs. You can find all the details state-by state at: www.projectnoproject.com. What is more frightening is that 18 of these projects were renewable projects in California. The attacks on these projects cost California $9 billion in private investment and over two thousand good paying jobs at the facilities.

So as to California’s willingness to allow oil drilling, that is great. What is unfortunate is that it took the state coming face to face with economic death before deciding that it must search for reason in the operation of government. California stands to gain $1.8 billion in royalties but it will gain much more. Jobs will be created and workers will pay taxes to the state and local governments. These workers will be better able to support their families, pay their mortgages and purchase products; all of which will help the economy.

If we allowed drilling in the entire OCS the U.S. would generate $1.8 Trillion in royalties. The job creation and economic development associated with the drilling would add $10 Trillion to the U.S. economy.

The federal, state and local governments of the U.S. need to understand that we can protect our environment while creating jobs for our people and generating revenues for the government. Hopefully the silver lining in the California mess is that this will be the one time California starts a trend that results in greater economic activity. Environmental laws are very important and they must be enforced but reason must prevail because in the end we are trying to run a country of 300 million people who need jobs, energy food, products and a high quality of life. None of these benefits can be achieved if the U.S. is bankrupt.

So thank you California for throwing off the shackles of failure and most of all, thank you for being the charter member of “Government Spenders Anonymous.”

First of all, let me be the first to welcome California as the charter member of “Government Spenders Anonymous.” California’s recognition that it operated in a separate reality from economic reality and its willingness to actually earn money through the collection of royalties from economic activity is a giant step toward sanity.

California and the U.S. have one of the cleanest environments in the world. The oil industry has the best safety record in the world. U.S. companies spend over $250 billion annually on environmental protection. Yet for decades, California, the U.S. Congress and environmental groups have used environmental laws to de-industrialize our economy. Fifty years ago manufacturing was 40% of our GDP, today it is around 12%. That is a lot of jobs lost and while the use of environmental laws to trump all other laws is not the sole reason for the job loss, it is a big part of it. The bans on drilling, while only part of the problem, are very illustrative of a mind set that wants to de-industrialize the U.S. without any concern for American jobs.

Let me provide one simple illustration. The Chamber started “Project No Project” to explore how much economic development is lost by the use of environmental laws to kill just energy projects in the U.S. The statistics are frightening. In the last several years approximately 350 energy projects were killed or substantially delayed by the use of environmental laws and 149 of these were renewable projects. The total value of the private sector financing that was not invested is over ½ trillion dollars and the American worker lost out on the creation of over 250,000 jobs. You can find all the details state-by state at: www.projectnoproject.com. What is more frightening is that 18 of these projects were renewable projects in California. The attacks on these projects cost California $9 billion in private investment and over two thousand good paying jobs at the facilities.

So as to California’s willingness to allow oil drilling, that is great. What is unfortunate is that it took the state coming face to face with economic death before deciding that it must search for reason in the operation of government. California stands to gain $1.8 billion in royalties but it will gain much more. Jobs will be created and workers will pay taxes to the state and local governments. These workers will be better able to support their families, pay their mortgages and purchase products; all of which will help the economy.

If we allowed drilling in the entire OCS the U.S. would generate $1.8 Trillion in royalties. The job creation and economic development associated with the drilling would add $10 Trillion to the U.S. economy.

The federal, state and local governments of the U.S. need to understand that we can protect our environment while creating jobs for our people and generating revenues for the government. Hopefully the silver lining in the California mess is that this will be the one time California starts a trend that results in greater economic activity. Environmental laws are very important and they must be enforced but reason must prevail because in the end we are trying to run a country of 300 million people who need jobs, energy food, products and a high quality of life. None of these benefits can be achieved if the U.S. is bankrupt.

So thank you California for throwing off the shackles of failure and most of all, thank you for being the charter member of “Government Spenders Anonymous.”

First of all, let me be the first to welcome California as the charter member of “Government Spenders Anonymous.” California’s recognition that it operated in a separate reality from economic reality and its willingness to actually earn money through the collection of royalties from economic activity is a giant step toward sanity.

California and the U.S. have one of the cleanest environments in the world. The oil industry has the best safety record in the world. U.S. companies spend over $250 billion annually on environmental protection. Yet for decades, California, the U.S. Congress and environmental groups have used environmental laws to de-industrialize our economy. Fifty years ago manufacturing was 40% of our GDP, today it is around 12%. That is a lot of jobs lost and while the use of environmental laws to trump all other laws is not the sole reason for the job loss, it is a big part of it. The bans on drilling, while only part of the problem, are very illustrative of a mind set that wants to de-industrialize the U.S. without any concern for American jobs.

Let me provide one simple illustration. The Chamber started “Project No Project” to explore how much economic development is lost by the use of environmental laws to kill just energy projects in the U.S. The statistics are frightening. In the last several years approximately 350 energy projects were killed or substantially delayed by the use of environmental laws and 149 of these were renewable projects. The total value of the private sector financing that was not invested is over ½ trillion dollars and the American worker lost out on the creation of over 250,000 jobs. You can find all the details state-by state at: www.projectnoproject.com. What is more frightening is that 18 of these projects were renewable projects in California. The attacks on these projects cost California $9 billion in private investment and over two thousand good paying jobs at the facilities.

So as to California’s willingness to allow oil drilling, that is great. What is unfortunate is that it took the state coming face to face with economic death before deciding that it must search for reason in the operation of government. California stands to gain $1.8 billion in royalties but it will gain much more. Jobs will be created and workers will pay taxes to the state and local governments. These workers will be better able to support their families, pay their mortgages and purchase products; all of which will help the economy.

If we allowed drilling in the entire OCS the U.S. would generate $1.8 Trillion in royalties. The job creation and economic development associated with the drilling would add $10 Trillion to the U.S. economy.

The federal, state and local governments of the U.S. need to understand that we can protect our environment while creating jobs for our people and generating revenues for the government. Hopefully the silver lining in the California mess is that this will be the one time California starts a trend that results in greater economic activity. Environmental laws are very important and they must be enforced but reason must prevail because in the end we are trying to run a country of 300 million people who need jobs, energy food, products and a high quality of life. None of these benefits can be achieved if the U.S. is bankrupt.

So thank you California for throwing off the shackles of failure and most of all, thank you for being the charter member of “Government Spenders Anonymous.”

First of all, let me be the first to welcome California as the charter member of “Government Spenders Anonymous.” California’s recognition that it operated in a separate reality from economic reality and its willingness to actually earn money through the collection of royalties from economic activity is a giant step toward sanity.

California and the U.S. have one of the cleanest environments in the world. The oil industry has the best safety record in the world. U.S. companies spend over $250 billion annually on environmental protection. Yet for decades, California, the U.S. Congress and environmental groups have used environmental laws to de-industrialize our economy. Fifty years ago manufacturing was 40% of our GDP, today it is around 12%. That is a lot of jobs lost and while the use of environmental laws to trump all other laws is not the sole reason for the job loss, it is a big part of it. The bans on drilling, while only part of the problem, are very illustrative of a mind set that wants to de-industrialize the U.S. without any concern for American jobs.

Let me provide one simple illustration. The Chamber started “Project No Project” to explore how much economic development is lost by the use of environmental laws to kill just energy projects in the U.S. The statistics are frightening. In the last several years approximately 350 energy projects were killed or substantially delayed by the use of environmental laws and 149 of these were renewable projects. The total value of the private sector financing that was not invested is over ½ trillion dollars and the American worker lost out on the creation of over 250,000 jobs. You can find all the details state-by state at: www.projectnoproject.com. What is more frightening is that 18 of these projects were renewable projects in California. The attacks on these projects cost California $9 billion in private investment and over two thousand good paying jobs at the facilities.

So as to California’s willingness to allow oil drilling, that is great. What is unfortunate is that it took the state coming face to face with economic death before deciding that it must search for reason in the operation of government. California stands to gain $1.8 billion in royalties but it will gain much more. Jobs will be created and workers will pay taxes to the state and local governments. These workers will be better able to support their families, pay their mortgages and purchase products; all of which will help the economy.

If we allowed drilling in the entire OCS the U.S. would generate $1.8 Trillion in royalties. The job creation and economic development associated with the drilling would add $10 Trillion to the U.S. economy.

The federal, state and local governments of the U.S. need to understand that we can protect our environment while creating jobs for our people and generating revenues for the government. Hopefully the silver lining in the California mess is that this will be the one time California starts a trend that results in greater economic activity. Environmental laws are very important and they must be enforced but reason must prevail because in the end we are trying to run a country of 300 million people who need jobs, energy food, products and a high quality of life. None of these benefits can be achieved if the U.S. is bankrupt.

So thank you California for throwing off the shackles of failure and most of all, thank you for being the charter member of “Government Spenders Anonymous.”

California’s budget problems have a silver lining—a bit of sanity returns to energy policy. Drilling in the Santa Barbara Channel will not only help state and local finances, it will also reduce our imports of foreign petroleum and help keep gasoline prices in check.

Plus it’s double-coupon day for the environment. First, studies show pollution from the millions-of-years-old natural seeps may actually decrease when oil production reduces the sub-surface pressure causing these seeps. Second, every barrel of oil produced in the U.S. reduces oil production in countries with poorer environmental controls.

No-drill policies that made sense for 1960s technology don’t make sense today. The fears that have capped billions of barrels of American petroleum are no longer valid because modern techniques and technology have proven safe—through hurricane after hurricane.

Moving to greater use of safe offshore petroleum production may be the one California energy policy the rest of the country should adopt.

California’s recent actions are not at all about “caving” to oil money. And it's interesting that our national dialogue positions the oil and gas industry in this way that doesn’t at all recognize the positive impact the industry has had on our lives or economy. The industry is responsible for hundreds of thousands of high wage jobs, and the work of the oil and gas industry touches our lives everyday.

As the economy continues to struggle, many people are starting to realize that oil is not just a fuel but a major industry that supports jobs and stable energy prices. And as we diversify our energy portfolio, the only logical thing to do is to appropriately, safely and responsibly utilize our own domestic resources.

For those who continue to shape the debate as one between economic and environmental interests, you have to ask yourself: is opposing domestic drilling really the best thing for the environment? Since the U.S. has some of the strictest laws in the world for drilling and producing oil, by depending on foreign oil, are we encouraging, by default, sloppier drilling in other places around the world with their own fragile ecosystems?

As long as oil remains the fuel of our modern economy, the question we should really be debating is where we get it.