California Democrats keep gas price spike bill moving forward despite bipartisan concern
California lawmakers took a big step on Friday towards passing a bill that could eventually force oil refineries in the state to hold onto a minimum amount of fuel in an effort to prevent some spikes in gasoline prices.
The Senate voted in favor of the controversial measure during a special session of the Legislature, which was called for by Gov. Gavin Newsom. The proposal would require the California Energy Commission to study what effects such a mandate could have at the pump.
The Assembly passed an earlier version of the bill Oct. 1 and will need to sign off on it one more time before it goes to Newsom.
“I’m really happy this got out” said Senator Nancy Skinner, a Berkeley Democrat who co-authored the measure, “it was a great day.”
The governor ordered lawmakers to take up the bill outside of their regular legislative calendar after they failed to do so by Aug. 31, when their work for the year was supposed to finish.
Newsom said immediate action was necessary because of “significant risk that prices could spike in the coming months” due to supply shortages caused by maintenance at the state’s nine refineries.
The state’s new Division of Petroleum Market Oversight estimates refinery maintenance last year caused a price spike that cost Californians up to $2.2 billion.
But Republicans argued the bill doesn’t do anything that is urgent and that the special session was a waste of taxpayer money.
“At what point do we say ‘no’ to the governor and we say ‘no’ to these extraordinary sessions,” said Senator Marie Alvarado-Gil, R-Jackson, “and take back our power as a state Legislature?”
Newsom accuses oil companies of spiking their profits by not keeping enough fuel in reserves when they undergo maintenance. The bill would also allow the energy commission to create criteria refiners must meet before starting maintenance projects. The agency could penalize companies as much as $1 million a day for not following the new rules.
“Californians are one step closer to getting the protections they need against Big Oil’s price spikes,” the governor said in a statement after the Senate vote.
Along with Newsom, the bill was supported by Attorney General Rob Bonta and many environmental groups.
It faced significant opposition from the Western States Petroleum Association, a major trade organization representing oil companies. Zach Leary, a lobbyist for the group, warned Senators this week that the policy could actually lead to higher costs for drivers because refiners would be forced to hold onto fuel that could be otherwise be used to fill up gas tanks.
The organization criticized the plan for giving the energy commission, and its unelected leaders, the power to oversee the new policies. The commissioner’s five members are appointed by the governor and must be approved by the Senate.
“Governor Newsom and the bill’s authors are pushing an extremist agenda that isn’t about lowering gas prices—it’s about intentionally raising them so Californians drive less,” the association’s CEO Catherine Reheis-Boyd said in a statement following the vote.
The State Building and Construction Trades Council of California also opposed the bill. Jeremy Smith, a lobbyist for the labor union, this week shared concerns with Senators that essential maintenance, and ultimately worker safety, could be jeopardized by the measure. And that the bill, and other legislative actions, could push refiners out of the state, causing its members to lose jobs.
Senators tried to ease some of the safety worries by amending the bill to emphasize the importance of protecting workers and people living near refineries. It was not immediately clear how quickly the Assembly will take up the modified measure.
Senate Republicans and some Democrats also voiced apprehension about what it could ultimately cost the state to carry out and enforce the new policies. They also questioned what, if any, effect it would have on gas prices for Californians.
In a clear example of that pushback Senator Dave Min, an Irvine Democrat, declined to vote on the measure, saying in a statement he had not heard a compelling reason as to why the bill needed to be considered now instead of next year. Min is running for Congress. Other Democrats didn’t initially vote for the measure Friday before eventually doing so.
Californians are paying an average of roughly $4.67 for a gallon of regular gasoline, more than $1.40 above the rate for the country as a whole, according to AAA. Much of that is due to taxes and costs related to environmental protections that are not tacked onto gas prices in other states. Democratic lawmakers shot down a Republican effort during the special session to suspend a state gas tax. Senate Pro Tem Mike McGuire, D-Healdsburg said it was outside the scope of what was lawmakers were supposed to consider, according to the governor’s order.
“If you want to actually help Californians drop the gas price, take the taxes off for Christ sakes,” said Brian Dahle, a Bieber Republican.
The bill approved Friday only allows the energy commission to enforce minimum fuel requirements if it determines that doing so will save customers more money than it will cost. The commission also must come up with a plan to waive the mandate in certain circumstances.
This story was originally published October 11, 2024 at 12:22 PM.
