California Senate passes controversial fuel reserves bill

California lawmakers in the State Senate approved a controversial bill requiring oil refineries to keep a minimum supply of fuel reserves to avoid future supply shortages and price hikes for consumers.

The bill, spearheaded by Gov. Gavin Newsom and Assembly Speaker Robert Rivas (D-Salinas), would also authorize the California Energy Commission to require refiners to plan for resupply during maintenance outages.

Penalties would be imposed on refiners who fail to follow the new guidelines.

“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 action necessary to help put this to an end,” Newsom said in a statement.

However, not everyone is on board with the proposed plan.

“Without a deep understanding of the complexities of refinery operations, policymakers are gambling with consumers’ wallets. We, as an industry, are ready to roll up our sleeves and address the root causes of California’s volatile energy market, which has been shaped by decades of policies. We call on legislators to do the same. Californians deserve solutions grounded in reality, not rushed ideas pushed through during a special session,” Catherine Reheis-Boyd, president and CEO of the Western States Petroleum Association, said in a statement ahead of the vote.

Sen. Dave Min (D-Irvine) declined to vote on the measure. In a statement , he noted that while he supports it, opponents have raised “serious concerns” that deserve a “fair and full vetting.”

“At the same time, I have not heard a compelling rationale as to why this bill needs to be advanced in October 2024 as opposed to being heard when the Legislature reconvenes in January 2025,” Min, who is also running for Congress, said in a statement.

The bill now moves to the state Assembly for its final vote.

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