Governor Gavin Newsom introduced a bill on March 28 that aims to protect gasoline consumers without compromising the environmental promise to end state reliance on fossil fuels. The bill, authored by Sen. Nancy Skinner, and co-sponsored by Attorney General Rob Bonta, was thoroughly debated. The compromise would allow the California Energy Commission to take on responsibilities regarding the imposition of civil penalties on oil companies for their alleged price gouging. The Oil industry has time and time again used their funds in order to assure their profits. This bill is a battle win amidst a political war that has gone on for decades.
Gas prices have risen substantially in the past year. According to a fact sheet from the Governor’s office, California gasoline prices were up to $2.61 higher than the national average. Several areas of California were seeing $6.42 per gallon and some reports even stated prices as high as $8.00. It is no surprise that California is in dire need of gas price regulation, but how the state should go about it is still up for debate.
The aim of this bill is not to automatically penalize, but to acquire pricing information from oil companies. A new state agency composed of five people, chosen and approved by the Governor and the State Senate, will be able to monitor the petroleum market and subpoena oil executives. The information they gather will be investigated by both the new state agency and a panel of experts in order to determine whether or not oil companies are gouging prices and harming consumers. This kind of regulation on oil is long overdue and with this type of monitoring, California residents are more likely to be protected from overcharge.
It’s possible the prospect of transparency will be enough motivation for these companies to cease taking advantage of California customers. “If we force folks to turn over this information, I actually don’t believe we’ll ever need a penalty because the fact that they have to tell us what’s going on will stop them from gouging our consumers,” said Assemblymember Rebecca Bauer-Kahan.
Republican Sen. Kelly Seyarto has suggested that the energy policy is what needs to be revised. The previous Thursday, Republicans pushed to suspend gas regulations and taxes for a year; however, the Democrats voted not to bring the Republican’s bill up for debate.
The California Reformulated Gasoline Standard, CaRFG, regulates the gasoline allowed to be sold within the state. It dictates that California gas is made into a specific blend in order to minimize carcinogenic fumes and reduce smog forming emissions. The CaRFG is an important environmental and health regulatory policy – dismantling it would be irresponsible and tactless.
Kevin Slagle, a spokesman for Western States Petroleum Association indicated that the real issue is the existing regulations that encumber fuel supply. There are also concerns that lawmakers rushed the bill through the Legislature and there is resentment for not allowing the oil industry more input. Regardless of these oppositions, the industry continues to lobby lawmakers. During the 2021-2022 legislative session alone, the Western States Petroleum Association spent $11.7 million on lobbying efforts. They have also contributed millions of dollars to various campaigns for both Democrats and Republicans. While oil companies continue to depict themselves as the victims of slander by the state government– there is no absence of influence by the oil industry in California politics.
Newsom told reporters, “When you take on big oil, they usually roll you — that’s exactly what they’ve been doing to consumers for years and years and years,” and, “The Legislature had the courage, conviction and the backbone to stand up to big oil.” The oil industry has consistently been a looming shadow on the California government. This bill is but a small win in the ongoing battle against lobbying industries that sway legislative processes for profit.