Oil Proposition Divides Calif. Voters

This is the big one in California and both sides have called out the big guns. As Bill Whitaker reports, the political battle royale is not Democrat Phil Angelides trying to terminate Arnold Schwarzenegger's governorship. No, it's a bitter fight over a proposition to tax oil and fund alternative energy. It's explosive and expensive.

USC professor John Matsusaka, who monitors state initiatives, says between them, supporters and opponents of the proposition have raised more than $100 million, so far.

"When you think about the fact that George Bush raised about $250 million of private contributions for his entire presidential campaign in 2004, we can see that the amount of money flowing into these single-issue campaigns in single states is huge," Matsusaka says.

Prop 87 would tax every barrel of oil produced in California to create a $4 billion fund—the money to be used to develop alternative energy sources.

"Proposition 87 will break out dependence on oil with cleaner, cheaper alternatives, like wind, solar and biofuels," YES on 87 proponent Yusef Robb says.

Opponents say it's bad policy and worse economics.

"It's going to make us more reliant on foreign oil," Joel Fox, president of Small Business Action Committee, says. "…the consequence is clearly going to be more cost for the price of gasoline."

Big oil pumped almost $75 million to fight it. Supporters tapped Silicon Valley and Hollywood.

Hollywood mogul, Steve Bing, coughed up $40-million himself. Now a big budget battle is raging on TV. While the "No" forces have tapped America's heroes, like one firefighter who appears in a TV ad, supporters have America's sweetheart: Julia Roberts.

It all leaves many voters perplexed.

"Yeah, I want cleaner air," Elizabeth Saucedo says. "But I don't want the gas prices to go up."

Supporters say prop 87 could be a model for the rest of the country, which is exactly what the oil companies fear most.