An Assembly panel voted Thursday to move two bills forward in a special session, called by Gov. Gavin Newsom in an effort to tamp down seasonal gasoline price spikes.
But lawmakers rejected a third bill, proposed by the Assembly’s top Republican, to exempt gasoline from the state’s cap-and-trade program, which GOP legislators argued would have immediately cut the price of gas and saved drivers money.
The main bill, proposed by Newsom in the final days of the legislative session, would require oil refineries to maintain a supply of gas using existing storage. It would direct the California Energy Commission to come up with the specific regulations.
The goal is to have larger reserves in case refiners go offline for maintenance, whether planned or unplanned. In recent years, such maintenance has led to sharp price hikes at the pump.
Market regulators say the price spikes have cost California drivers up to $2 billion and directly profit oil companies.
“This legislation aims to protect the health and safety of the workforce and the frontline communities around refineries while also safeguarding consumers from skyrocketing gas prices,” said bill author Asm. Gregg Hart, D-Santa Barbara. “That is not is not an easy thing to do, but it is a worthwhile task.”
Industry, business and labor groups raised concerns that additional regulations on California’s oil market would push more refineries to close and place lower prices at the pump ahead of worker safety.
Two Democrats on the 19-member committee abstained from voting on the measure and said they want stronger assurances from state regulators that the proposals will actually bring down the cost of gasoline in California. Several also raised concerns that maintaining reserve supply would disincentivize refiners from doing proper safety checks and maintenance.
The proposal has faced strong opposition from the Western States Petroleum Association, which represents oil companies, since it was introduced in late August. Lobbyists for the group have repeatedly decried the heavy environmental rules imposed on refiners by the state, saying more regulations would drive prices further up.
But Assembly member Cottie Petrie-Norris, the Orange County Democrat chairing the special session committee, said the group had failed to refute math
“The status quo is costing between one to $2 billion a year, and this alternative will cost $50 million,” she said, citing analysis by the energy commission and its new Division of Petroleum Market Oversight.
“You have said that’s wrong. You said it’s going to raise costs. We repeatedly asked you to help us understand that,” Petrie-Norris said to WSPA lobbyist Zachary Leary. “And to this moment, you have been unable to present the reason that their math is wrong.”
A second bill approved by the committee would direct regulators to study the impacts of increasing the amount of ethanol permitted in California’s fuel blends from the current 10% to 15%. Petrie-Norris, the proposal’s author, argued the shift could save California drivers $2.7 billion and could yield environmental benefits.
The committee rejected a third bill brought forward by Assembly Republican Leader James Gallagher, R-Nicolaus, to exempt gasoline from California’s Cap and Trade program after he refused to amend it.
The Cap and Trade program requires industries to reduce greenhouse gas emissions or pay fees to offset carbon emissions.
Gallagher said the special session’s mission to address price spikes was focusing “on the wrong thing.”
“The price is already too damn high,” he said. “I’m thinking about the average Californians, the working Californians. ”
The two bills passed Thursday were the culmination of more than 15 hours of public hearings on the topic in recent weeks. The full Assembly is scheduled to convene on Oct. 1 to vote on the proposals.
The state senate has yet to formally begin the special session. Senate President pro Tem Mike McGuire had wanted to approve the minimum inventory proposal at the tail end of the regular session, which ended in August.
McGuire has said the Senate will convene after the Assembly takes action on the bills. But his office signaled Thursday that the chamber would need time to review amendments to both proposals.
“The Senate has been very clear in our support for the language in ABx2-1 as long as it’s consistent” with the bill unveiled at the end of the legislative session, McGuire’s office said in a statement. “If substantial changes are made to the bill, or if additional bills are added, the Senate will need to review those new policies thoroughly.”
Meanwhile, Newsom on Thursday hosted a group of environmental and consumer advocates who support the minimum inventory proposal.
“There’s a reason why leaders from across our state are supporting our plan to prevent gas price spikes — we’re all impacted when Big Oil fleeces us at the pump,” the governor said in a statement. “Last year alone, price spikes cost California families billions of dollars while refiners made record profits. And with the help of the legislature, we’re going to protect Californians from future price gouging.”
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