Gavin Newsom signs bill aiming to prevent California gas price spikes, swipes at oil industry
Gov. Gavin Newsom on Monday signed a bill that could force oil refineries in the state to hold onto a minimum amount of fuel — a policy he aggressively pushed lawmakers to pass in a special session as a way to prevent future spikes in gasoline prices.
The new law will require the California Energy Commission to study the effects of having a mandate and allow the agency to force companies to meet certain criteria before starting non-emergency maintenance work on the state’s nine refineries. The commission could penalize companies as much as $1 million a day for not following the new rules.
Newsom ordered the session after it was clear lawmakers were not going to approve the measure by an Aug. 31 deadline, when their work was supposed to finish for the year.
During the special term, Republicans and some Democrats questioned the effectiveness of a potential mandate and also the need to pass it now, saying lawmakers could have voted on the measure next year. They also said the state could be doing more to lower gas prices for Californians. The average price in the state per gallon is about $1.47 more than the country as a whole, according to AAA.
“Even if, in theory, it stops price spikes, it still doesn’t bring them down,” Nicolaus Assemblyman James Gallagher, the top Republican in the body, told reporters Monday. “And the problem is the price is too damn high, right now.”
Newsom, during a press conference after signing the bill, said lawmakers would do more on the issue of prices at the pump in the future.
“There’s a deep understanding that this is not the final word as it relates to the issue of gas prices in the state of California. Quite the contrary.”
Newsom also took swipes at oil companies and the Western States Petroleum Association trade group for what he said were “mistruths” about the bill in recent weeks.
“They’ve been manipulating you, they’ve been lying to you, they’ve been playing you.”
Newsom has accused companies of spiking their profits by not keeping more gasoline on hand ahead of maintenance work. The state’s Division of Petroleum Market Oversight estimates refinery maintenance last year caused a price spike that cost Californians up to $2.2 billion.
“Today’s press conference was not about solving California’s real challenges — it was a political performance,” said Catherine Reheis-Boyd, the petroleum association’s CEO. “Instead of offering real solutions, the Governor chose to demonize an industry that powers California’s economy and fuels the daily lives of millions.”
The trade group argued the bill could actually raise prices by forcing refiners to hold onto more gasoline than it might otherwise. It also criticized the bill for giving the unelected energy commission the power to instill and oversee a potential mandate. Members of the commission are appointed by the governor and confirmed by the Senate.
The State Building and Construction Trades Council of California also opposed the bill due to a concern that refineries could be more unsafe for workers if companies don’t have as much say on when they conduct maintenance.
Lawmakers tried to address some of the worries about the new law by requiring the commission to protect the health and safety of workers and to only implement a minimum fuel requirement if it determines that doing so will save customers more money than it will cost.
Newsom signed the bill after the Assembly earlier in the day confirmed changes that were recently approved by senators.
This story was originally published October 14, 2024 at 4:08 PM.
