California Governor Gavin Newsom signed a new law on Monday aimed at preventing sudden spikes in gas prices, marking the latest development in his ongoing confrontation with the oil industry over energy costs and the effects of climate change.
High Gas Prices in California
Californians are currently facing the highest gasoline prices in the United States, primarily due to taxes and stringent environmental regulations. As of Monday, the average price for regular unleaded gas in California was approximately $4.68 per gallon, significantly higher than the national average of $3.20, according to AAA.
The new law stems from findings by the state’s Division of Petroleum Market Oversight, which indicated that gas price surges are largely attributed to increases in global crude oil prices and unexpected refinery outages. The legislation empowers energy regulators to mandate that refineries maintain a specific fuel reserve. This measure aims to mitigate sudden price hikes when refineries go offline for maintenance, with proponents arguing that it could save Californians billions of dollars at the pump.
During the signing ceremony at the state Capitol, Newsom criticized the oil industry for its efforts to block the legislation. He stated, “They continue to lie, and they continue to manipulate. They have been raking in unprecedented profits because they can.” His remarks reflect a broader frustration with the industry’s practices amid soaring gas prices.
Although Newsom signed the measure just weeks before the November elections, he asserted that the legislation was not politically motivated. With two years left in his second term, the governor emphasized that the decision was rooted in the need for immediate action rather than electoral considerations.
Concerns from Opponents
Opponents of the law have raised concerns that it could unintentionally lead to increased overall gas prices and compromise worker safety by granting the state more control over refinery maintenance schedules. Critics argue that delaying essential maintenance could result in accidents, exacerbating safety risks.
Catherine Reheis-Boyd, president of the Western States Petroleum Association, stated, “Legislators still fail to understand our industry or what drives high gas prices. Regulators remain fixated on controlling businesses with more taxes, fees, and costly demands.”
Assembly Republican Leader James Gallagher attempted to adjourn the Assembly before lawmakers voted on the bill, which ultimately passed and was sent to Newsom’s desk on Monday. Republicans had proposed their own measures aimed at lowering gas prices, but these were blocked by the Democrat-dominated Legislature. One notable proposal that did not advance would have exempted transportation fuels from California’s cap-and-trade program.
Newsom first unveiled this legislation in August during the last week of the regular legislative session. However, Assembly lawmakers indicated that they needed more time to assess the bill. Consequently, the governor called a special session of the Legislature to facilitate its passage.
This is not the first time Newsom has convened lawmakers in a special session regarding gas prices. In 2022, he called them together to enact legislation that penalizes oil companies for excessive profits, showcasing his commitment to addressing the issue.
State Senate President Pro Tempore Mike McGuire emphasized that the new law represents just one facet of the state’s broader efforts to alleviate the cost of living for residents. He stated, “This bill sets the stage to ease gas price spikes and provide additional certainty through enhanced storage and oversight. I firmly believe Californians are tired of the price spikes.”
Potential Impact of the Law
The implications of this new legislation could be significant for California’s economy and its residents. By aiming to stabilize gas prices, the state government hopes to provide relief to consumers who have been facing financial strain from high fuel costs. Proponents believe the law could save Californians billions at the pump by curtailing price spikes.
Governor Gavin Newsom’s signing of this new law underscores the state’s determination to combat rising gas prices and hold the oil industry accountable. As Californians grapple with the highest fuel prices in the nation, this legislation aims to provide a framework for stabilizing costs and enhancing oversight of the oil market.
With the political landscape shifting and an election on the horizon, Newsom’s actions reflect not only a response to immediate economic pressures but also a long-term strategy to address the complexities of energy pricing and climate change in California.
Featured image credit: Gage Skidmore via Flickr
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