SACRAMENTO, Calif. — The California State Senate passed Governor Gavin Newsom’s proposal to stop rising gas prices in the state.
ABX2-1 requires oil refineries to maintain a minimum inventory level to decrease price spikes during peak driving months, and to monitor when refineries undergo either planned or unplanned maintenance.
“Californians are one step closer to getting the protections they need against Big Oil’s price spikes. I’m grateful to our partners in the Senate for helping to save Californians money at the pump. Price spikes cost consumers more than $2 billion last year, and we’re taking the action necessary to help put this to an end,” said Newsom in a statement.
Californians pay some of the highest prices at the pump. According to data from AAA, California’s average gas price is $4.66, over a dollar more than the national average.
The bill was inspired by findings from the state's Division of Petroleum Market Oversight, which demonstrated that gas price spikes are largely caused by increases in global crude oil prices and unplanned refinery outages.
“Rising gas prices impact everyone in California and nearly every facet of our lives – from how much we’re paying at the pump to the cost of what we’re buying at the store. Putting mechanisms in place to help prevent costs from spiking and sending family budgets into a tailspin benefits us all," said Senate pro tem Mike McGuire in a statement.
At the Special Senate floor session, the measure passed with a vote of 23-9, with several Democrats abstaining.
State Senator Dave Min from Irvine, was one of the Democrats who abstained from voting. He released a statement saying he has concerns about whether the proposals would accomplish the goal of lowering gas prices for Californians.
“These concerns deserve a fair and full vetting,” he said.
Gas companies like Chevron oppose Newsom’s gas bill. Andrew Walz, Chevron’s President of the Downstream, Midstream and Chemicals Division, sent a letter asking lawmakers to reject the bill.
"There's no place to put extra product. There's no tanks where the refineries are full. What's happening is that they've been shutting refineries because it's not a place where people want to operate or invest in that business. California is directly trying to get us out of business, and therefore, there's no longer the same amount of capacity," Walz said.
The bill would require the California Energy Commission, in collaboration with an advisory committee, to develop the minimum requirement standards. They would also be in charge of overseeing its implementation. Refineries that do not comply with the proposed standards could have civil penalties.
Senate Republicans tried to pass another bill at the special session that would have suspended the state’s gas tax, but the measure was not brought up for a vote.
“I’m deeply disappointed in the legislature’s decision to continue ignoring real solutions for lowering gas prices. It is our legislative duty to support struggling families, and one critical step we can take is to provide immediate relief from the burdensome state excise tax,” said Rosilicie Ochoa-Bogh in a statement.
Last month, governors representing Nevada and Arizona, which import gas from California, sent a letter urging Newsom to reconsider the proposal. They said at the time they were concerned it could increase prices in their states.
ABX2-1 heads back to the Assembly for a final vote on Monday, Oct. 14.
