I made another point on Robert's blog with regard to this initiative, and that is about the growth in companies that come along and re-open "dead" oil fields. These fields were closed years ago because their production was so low that they were no longer profitable.

However, that was when oil was $10 or $20 per barrel. These new companies buy the rights and are able to make money off old fields. They use advanced recovery techniques and manage to get enough oil out that it is profitable at today's high prices. This is an important potential resource going forward. The total amount of oil left in these abandoned fields is substantial, and could make a difference if we hit a major oil production crisis in the next few years.

So what's going to happen to these small companies when they are hit by this new production tax? It's going to change the economics, which is already just barely profitable. Chances are that many fields which make economic sense to produce today will become uneconomic once this new tax is added. The result is just what economists would predict: taxing production means you will get less production.

Is this really what the voters of California are going to want, if and when we hit a Peak Oil crisis? Are they going to be happy with a measure which is driving oil recovery companies out of business and reducing California oil production? I'd suggest that this is the opposite of what we want to do.

If voters want to subsidize alt-energy companies, fine. Do it out of their own pockets. Lay a tax on themselves to fund the program. But don't con yourself into thinking you can tax the other guy and it won't cost you a penny. It's a discredit to the intelligence of the California voter that advocates of this proposition are trying to sell it on the basis of that old "it won't cost you a thing" con.