IT IS a bitterly fought campaign that is pitting Hollywood against big oil; environmentalists against businessmen and millions of dollars against even more millions.

As Americans prepare to vote in congressional elections, the most expensive campaign battle is taking place in California. But the nearly $110 million (£58 million) spent to date is not about a seat in Congress. It’s about oil.

California has long been a pioneer state for environmental issues, so it was little surprise that it should come up with Proposition 87 — a tax on in-state oil production to raise billions to invest in the development of renewable energy technology. Anywhere else in the country, the oil companies might have been confident of crushing such a proposition. But California has something nowhere else has: Hollywood. And Hollywood has money.

Steve Bing, the movie producer, is the unlikely star of this show. As the oil companies geared up to fight the initiative — which goes to the voters on November 7, the same day as midterm elections — he stepped in on the side of the “yes” campaign with a record-breaking cash infusion of $40 million .

Since then the proposition has drawn an array of stars and showbiz-friendly political leaders to lend their star wattage to the “yes” campaign. Julia Roberts, for instance, visited asthma-ravaged children in hospital this week to highlight the terrors of air pollution produced by the state’s huge dependence on energy from oil.

The oil companies’ incentive for fighting the initiative is pure mathematics. Under Proposition 87, a tax of between 1.5 and 6 per cent would be levied on all oil produced in California, one of the top five oil-producing states in the union. The tax would continue until revenue reached $4 billion, to be invested in the development of clean energy technology. The more than $60 million that the companies have poured into their “no” campaign is money spent now to save a huge tax bill later.

Big oil claims that the proposition will raise gas prices at the pump — unlikely, as the Bill forbids that; that oil companies would flee California for other states; and that California would end up more dependent on oil imports from the Middle East. It is an emotive argument, hitting hard at a national psyche traumatised by the experience in Iraq.

The “yes” campaign argues that only clean energy can save California from the spectre of foreign oil dependence: which, both sides hint, leads directly to a more dangerous and unstable world. Al Gore, the new darling of green Hollywood since the success of his global-warming movie An Inconvenient Truth has tapped into Mr Bing’s largesse to produce a campaign commercial in which he says: “Here is the truth the oil companies won’t tell you: half of the foreign oil they’re importing to California is from the Middle East. As a result, California is dangerously dependent on foreign oil.”

All of which has left California’s voters terribly confused. As the spending and the bitterness have risen, interest in the initiative has fallen. Support for it now runs at 44 per cent — down from 52 per cent in July. Voters don’t even have their Governor to look to: Arnold Schwarzenegger, the greenest Republican in the land, has stayed silent on the initiative, caught between his progressive environmental policies and his own entrenched conservatism on matters fiscal.

Some wonder what the fuss is about: California is the only top oil-producing state in the country without such a tax. Alaska’s runs at 15 per cent, Louisiana at 12.5 per cent and Texas at 4.6 per cent. But when the revenue is to be spent on green energy, that might threaten the future of oil instead of say, schools or healthcare, that, it seems, is when the gloves come off. And the stars and the cash come out.

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