California bill aims to stop soaring gas prices – NBC Bay Area

The California State Assembly on Tuesday approved a bill, backed by Gov. Gavin Newsom, aimed at preventing gas prices from skyrocketing, especially in the late summer months when demand for gas increases.

The legislation would authorize state energy regulators to require companies to keep a certain level of fuel on hand – using existing storage facilities to avoid a spike in gas prices if refineries are shut down for maintenance. The state would first need to determine whether the benefits of the minimum inventory provisions outweigh the potential costs to consumers under the act.

“This bill encourages fuel refiners to plan proactively, saving Californians – consumers – billions at the pump while maintaining profits,” said Assemblyman Gregg Hart, a Democrat representing Santa Barbara who authored the bill. “Let’s take action to help Californians who need gas in their cars to get to work, take their children to school, vote and visit loved ones.”

The Assembly also introduced a bill requiring state energy officials to submit a report to lawmakers by July 1, 2025, on proposals to increase gas supplies. The bills still need to be approved by the state Senate before they reach the governor’s desk.

Supporters of the bill say it would save Californians billions of dollars at the pump. But opponents say it could unintentionally raise overall gas prices and threaten worker safety by giving the state more oversight over refinery maintenance schedules. They argued that delaying necessary maintenance could lead to accidents.

“Without a deep understanding of the complexities of refinery operations, policymakers are playing with consumers’ wallets,” Catherine Reheis-Boyd, CEO of the Western States Petroleum Association, said in a statement.

Newsom’s proposal has intensified an ongoing fight with the oil industry over its emissions and profits. His administration says oil industry profits rise during gas price spikes. Newsom introduced the legislation in August, during the last week of the regular legislative session.

Democratic leaders in the state Senate wanted to pass the bill before the legislative deadline, but Democrats in the Assembly wanted more time to consider it. Newsom then called the Legislature into a special session to try to pass the proposal.

Pro-interim Senate President Mike McGuire said at the time that the Senate would not convene for a special session, but his office said Tuesday evening that the chamber would vote on the bill next week.

“The Senate intends to act quickly and effectively so we can get Californians the relief they deserve at the pump,” McGuire said in a statement. “We appreciate the Assembly’s work on this issue and we will start the legislative process on October 7.”

This isn’t the first time Newsom has tried to pressure the Legislature to pass oil and gas legislation. He called a special session in 2022 in an attempt to pass a tax on oil company profits. The governor then said he wanted a penalty, not a tax. The bill he signed months later gave regulators the power to punish oil companies for making too much money.

Newsom said Tuesday that his proposal to prevent gas price spikes could help families avoid having to choose “between filling up the tank and putting food on the table.”

Californians pay top rates at the pump due to taxes and environmental regulations. According to AAA, the average price of regular unleaded gasoline in the state is about $4.68 a gallon as of Tuesday, compared with the national average of $3.20.

According to the California Energy Commission, gas prices in California are rising more than in the rest of the country. That’s partly because just four refineries supply about 90% of the state’s gas, meaning one refinery’s decision to take it offline for maintenance has a greater impact on the market, said Tai Milder, director of the Division of Petroleum Market Oversight. committee.

“California consumers are rightfully fed up with paying inflated prices during price spikes,” Milder said at a hearing last week. “These price spikes are not normal.”

Republican lawmakers have opposed Newsom’s minimum inventory proposal, saying there is insufficient evidence that the measure will help California lower gas prices. Assembly Republican Leader James Gallagher introduced a proposal to exclude transportation fuels from the state’s cap-and-trade program to lower gas prices, but it was blocked last week by an Assembly committee that approved the bills in a special session.

They argue that the measure aimed at avoiding gas price spikes doesn’t actually take into account current rates at the pump.

“Isn’t it weird that we have this big special session and we all come back and we don’t consider a single bill that would actually lower the price of gas?” Gallagher asked on Tuesday. “What are we doing here?”

Associated Press reporter Trân Nguyễn contributed.