CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, SEPTEMBER 2, 2014, OR THEREAFTER
BY THOMAS D. ELIAS
"TESLA HAS STATE WALKING A TIGHTROPE”
And so California government now walks
a tightrope, put in that position by one of the latest in the large corps of
successful high-tech startups this state has spawned over the last few decades.
Make a misstep in one direction and
the state stands to lose a huge battery plant and 6,500 jobs. Stumble the other
way and the state’s most important environmental law could be discredited,
tainted by favoritism.
This
quandary features Tesla Motors, whose luxury electric cars are made in the
former General Motors and Toyota automotive assembly plant in the East Bay city
of Fremont. Tesla parlayed a good idea, a derelict factory and a variety
of state and federal government subsidies into huge success. Now it’s playing
off the state that nurtured it against places like Texas, Arizona, Nevada and
New Mexico.
The car company, whose advanced
batteries allow its Model S to go farther on a single charge than any other
commercially sold electric vehicle, plans a new “giga-factory” to make even
better lithium-ion batteries. Company owner Elon Musk will likely decide
sometime this fall where to locate his 10 million-square-foot facility.
California wants that plant, likely to
be built in or near Stockton, within easy reach of the Fremont factory. But
state environmental laws could help send it elsewhere, if only because the
required environmental impact reports and other evaluations likely can’t be
done in Musk’s timeframe.
But Gov. Jerry Brown and state
legislators are tired of high-profile companies that start here, then move
factories and headquarters out of state. Texas, with its lack of a state income
tax and its offers of cheap land, relatively low-wage labor and promises of
eight years or more of tax exemptions, has made the most such inroads.
Most recently, it lured Toyota’s national offices from Torrance to the Dallas
area.
So negotiations are underway to give
Tesla major exemptions from the landmark California Environmental Quality Act
(CEQA), which has often been used to stymie or delay large construction projects.
Among ideas proposed are limits on
environmental reviews prior to construction and letting Tesla mitigate any
damage from the plant after it’s open. It was probably no coincidence that on
the day word of these possible concessions reached Wall Street, Tesla stock
jumped about 30 points.
These kinds of concessions are not
completely unique, but they have rarely been put into operation. National
Football League stadiums proposed for the City of Industry and downtown Los
Angeles – the NFL won’t go for both – won similar concessions from the
Legislature earlier in this decade.
But such sweetheart deals for large
projects upon which elected officials place a high premium anger both
environmental groups and some local politicians.
Back in 2011, when concessions were
made to the Anschutz Entertainment Group for the proposed Farmers Field in Los
Angeles, Beverly Hills Councilman John Mirisch questioned in an online essay
whether “we should be granting CEQA exceptions…for individual projects.”
“There is no doubt CEQA is sometimes
abused,” he said, noting that businesses sometimes emploit it to stifle
expansion by competitors. “Yet for all its flaws, CEQA serves a
fundamental…purpose, which is to specify the impacts of a project…and to allow
policy-makers to require mitigations.”
No one knows what mitigations either
Tesla or an NFL stadium might have to make, or how expensive they could be. But
once a project is built, it’s a lot easier for the owners to try to fight off
added expenses and inconveniences.
And the Sierra Club called a
large-scale exemption for Tesla “simply unacceptable.”
But legislators have been known to
favor politically potent industries before, just this year passing tax benefits
for military airplane makers in an effort to keep high-paying jobs here, with
vastly expanded tax breaks for movie and TV producers coming soon.
It’s also true that Brown called in
his 2010 campaign for “reform” of CEQA, but hasn’t gotten anything much
through the Legislature.
All of which sets up the tightrope
walk: Brown and the Democrats who dominate the Legislature can’t afford to lose
the support of environmentalists. They don’t want to make CEQA a laughingstock.
They also want to keep the ultra-green Tesla, whose cars produce no smog,
operating in California. So they’ll compromise, and they still may not keep all
Tesla’s jobs and money here.
-30-
Email Thomas Elias at tdelias@aol.com. His
book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and
the Government’s Campaign to Squelch It," is now available in a soft cover
fourth edition. For more Elias columns, visit www.californiafocus.net
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