In the latest episode of his political battle with Big Oil, Gov. Gavin Newsom on Thursday called on California lawmakers to pass new requirements for oil refineries during the final two weeks of the legislative session.
Newsom’s last-minute proposal would allow his administration to mandate that petroleum refineries maintain steady stockpiles to prevent fuel shortages and price spikes when refinery equipment is shut down for maintenance, his office said.
The plan marks a continuation of the governor’s campaign and another attempt by Newsom to blame the oil industry for high gas prices in California Blocking legislation through the state capitolNewsom unveiled his proposal nearly two years later. He announced a special session on oil prices, which ultimately fell short of his call for a cap on the industry’s profits.
“A jump in prices at the pump is a jump in profits for Big Oil,” Newsom said in a statement. “Refiners should be required to plan ahead and backfill supplies to keep prices stable, rather than playing games to make even more profits. By requiring refiners to act responsibly and maintain gas reserves, Californians can save money at the pump every year.”
After the Democrats Objections raised against the idea of penalizing the oil industry during the special sessionLawmakers determined that state regulators needed more information about oil pricing so they could understand and prevent price gouging at the oil pump.
Democratic legislators passed a law last year that established new transparency requirements for the oil industry and gave the California Energy Commission the power to cap profits and impose fines through the regulatory process.
The law established the Petroleum Market Oversight Division within the Energy Commission, and gave it authority to collect new data from the industry to investigate price jumps. Earlier this year, the division wrote a letter Based on the findings so far, the report recommends that the state impose minimum inventory and resupply requirements on refiners, arguing that oil companies do not maintain enough refined gasoline to cover production shortfalls or protect against the impact of unplanned maintenance.
“This supply shortage was predictable and could have been prevented, but California refiners are not legally obligated to maintain sufficient supply to adequately protect Californians from price increases,” the division stated.
Assembly Republican leader James Gallagher (R-Yuba City) criticized the governor’s proposal, saying it was “a half-hearted attempt to distract from the simple fact” that state policies are responsible for high gasoline costs.
“If Newsom were serious about lowering prices, he would streamline the approval process for new gas storage projects, stop pushing new regulations that would raise costs even more, and make it easier to produce energy in California,” Gallagher said in a statement. “Democrats have imposed the strictest regulations and the highest gas taxes in the country — and all of that is reflected in the price at the pump.”
It’s not yet clear whether Democratic lawmakers will support Newsom’s proposal or how they would react if a bill is brought before them so late in the legislative process. The Legislature has about two weeks left to act on hundreds of bills before it adjourns for the year at the end of August.
Newsom’s office said he discussed the plan with legislative leaders before making the announcement Thursday. The proposal has not yet been introduced into a bill and was only summarized in a press release by the governor’s office.
“We are in continuing discussions with the governor about his petroleum market oversight proposal,” said Nick Miller, a spokesman for Assembly Speaker Robert Rivas (D-Hollister). “These discussions and consultations with Assembly members will continue.”
A spokesman for Senate President Pro Tem Mike McGuire (D-Healdsburg) did not respond to a request for comment.
Newsom introduced the bill the same day lawmakers followed through on their promise. An agreement was reached with the oil industry To stop the campaign to overturn a law that prohibits the drilling of new oil and gas wells within 3,200 feet of homes, schools, parks and hospitals.
The California Independent Petroleum Association and other supporters of the referendum campaign on the setback law agreed in late June to withdraw the measure from the November ballot.
As part of the compromise, Assemblyman Isaac Bryan (D-Los Angeles) said he agreed to limit the scope of another bill, AB 2716, which would impose a $10,000-a-day fine on operating “low-producing” oil wells within 3,200 feet of so-called “sensitive receptors.” Lawmakers on Thursday officially amended the bill so that it applies only to the Inglewood oil field.
“As agreed, we have limited the scope of this bill to the state’s largest urban oil field, which is directly in my district,” Bryan said. “It’s time to fine this oil field for the harm it has caused to surrounding communities and invest those funds into a sustainable future for the people who live near it.”
He said making sure the original setback law goes into effect immediately is “the most important environmental win we can achieve this year.”
