California’s legislative proposal aims to tackle soaring gas prices through stringent regulations and financing for clean energy, but the political battle is just beginning.
At a Glance
- Gov. Gavin Newsom calls for a special session to address California’s high gas prices.
- The legislative package tackles oil company regulations, pricing transparency, and clean energy financing.
- Main proposals include regulating refinery operations and suspending the gas tax for a year.
- There is significant opposition from Senate leaders and the oil industry.
California’s Legislative Push to Control Gas Prices
With gas prices in California averaging $4.64 per gallon, Governor Gavin Newsom has called a special legislative session to address the crisis. This session, extended until November 30, aims to address comprehensive energy bills that didn’t pass in the regular session due to time constraints and legislative resistance.
Newsom’s new legislative package includes Senate Bill 950, aimed at regulating refinery maintenance, and Assembly Bill 3121, which proposes household credits. Furthermore, Assembly Bill X2-2, introduced by Tom Lackey, advocates suspending the gas tax for one year, potentially lowering prices by over 68 cents per gallon. These measures are intended to provide immediate financial relief to consumers.
There's been no new gas taxes imposed.
No new fees.
No new regulations in the state of California.
Why are gas prices rising in the state when they're falling elsewhere?
Big Oil is taking advantage of us. pic.twitter.com/cGTTeerKFn
— Governor Newsom Press Office (@GovPressOffice) September 9, 2024
Political Landscape and Challenges
The push for these reforms isn’t without controversy. Senate President Pro Tem Mike McGuire rejected Newsom’s call for a special session this fall, though he expressed openness to future discussions. Assembly Speaker Robert Rivas supports the session and plans to begin hearings soon to address the issues at hand.
“The Senate always had the votes and was ready to get these important measures across the finish line this legislative year,” McGuire said. “We won’t be convening a special session this fall, but we look forward to continuing conversations with the Governor and Speaker about this critical issue in the days and weeks to come.”
In contrast, Senate Republican leader Brian Jones and Republican members of the California Assembly have criticized Newsom’s approach as undemocratic. They argue that increasing regulations could potentially worsen the situation by increasing costs.
Impact on Consumers and the Oil Industry
The oil industry has voiced strong opposition to the proposed regulations, claiming they could lead to higher prices rather than alleviating the financial burden on consumers. The Western States Petroleum Association has argued that a key bill mandating minimum fuel inventory for refiners would raise costs by withholding supplies. Data shows an increase in the number of days with fewer than 15 days of gas supply in California from 2021 to 2023, emphasizing the volatility of the current supply.
Newsom’s legislation includes giving the California Energy Commission more authority over refinery operations, which he believes is essential to prevent future price spikes. The governor has criticized oil refineries for profiting from these spikes and emphasizes the need for transparency in pricing practices.
