California Gov. Gavin Newsom Signs Law to Curb Gas Price Spikes \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ California Governor Gavin Newsom signed a new law aimed at preventing sudden gas price spikes, marking his latest clash with the oil industry. The legislation grants regulators more oversight on fuel supplies, requiring refineries to maintain fuel reserves to prevent shortages. While proponents say the law could save Californians billions, critics argue it could lead to unintended consequences, such as increased gas prices and refinery safety risks.
Newsom Signs Law to Prevent Gas Price Spikes: Quick Looks
- New law: Newsom signed a bill giving regulators power to require refineries to maintain fuel reserves, preventing price spikes during outages.
- California’s high gas prices: As of Monday, Californians were paying an average of $4.68 per gallon, much higher than the national average of $3.20.
- Legislative pushback: Oil industry groups and some lawmakers argue the law could raise prices and compromise refinery safety.
- Newsom’s stance: The governor accused the oil industry of manipulating prices for profit and defended the law as essential for consumer protection.
- Political context: Newsom signed the law ahead of the November election, though he denied any political motivation.
Deep Look
California Governor Gavin Newsom signed a groundbreaking law on Monday aimed at preventing sudden spikes in gas prices, marking another chapter in his ongoing battle with the oil industry over energy prices and climate policy. The new legislation is designed to give state energy regulators more authority over refinery operations, particularly when it comes to maintaining fuel supplies to prevent shortages that could cause prices at the pump to soar. This is the latest move by Newsom to address Californians’ frustrations over the state’s high fuel costs, which are consistently the highest in the nation.
As of Monday, the average price for regular unleaded gas in California was $4.68 per gallon, according to AAA, compared to a national average of $3.20. The high prices are attributed to California’s environmental regulations and taxes, which contribute to the cost of fuel. However, Newsom and his supporters argue that the oil industry has also played a role in manipulating prices for profit. Newsom’s new law aims to mitigate price spikes by ensuring that refineries keep a certain amount of fuel on hand, even when they undergo planned maintenance or unplanned outages.
The legislation was inspired by findings from the state’s Division of Petroleum Market Oversight, which concluded that unexpected refinery outages, combined with global fluctuations in crude oil prices, were the primary drivers of gas price spikes. By giving energy regulators the authority to require refineries to maintain fuel reserves, proponents of the law believe it will stabilize the market and help prevent price surges. Advocates estimate that the law could save California drivers billions of dollars by reducing the likelihood of sudden increases at the pump.
Governor Newsom, who signed the legislation at the state Capitol alongside supportive lawmakers, delivered sharp criticism of the oil industry during the signing ceremony. “They continue to lie, and they continue to manipulate,” Newsom said, accusing oil companies of profiting from California’s high gas prices. “They have been raking in unprecedented profits because they can.” Newsom emphasized that the law was a necessary step to protect Californians from what he described as industry exploitation.
The timing of the law’s signing is significant, as it comes just weeks ahead of the November elections. While Newsom is not up for re-election himself—he has two years left in his second term—some political analysts suggest the move could be seen as an effort to bolster his party’s standing with voters. However, Newsom dismissed suggestions that the legislation was politically motivated, stating that it was part of a long-term effort to address the state’s high cost of living and protect consumers from predatory business practices.
Despite the support from Democratic lawmakers, the legislation faced strong opposition from the oil industry and some Republicans in the state Legislature. Critics argue that the law could have unintended consequences, such as increasing overall gas prices and compromising refinery safety. By granting the state more oversight over refinery maintenance schedules, opponents fear that the law could lead to delays in necessary repairs, which could, in turn, lead to accidents.
Catherine Reheis-Boyd, president of the Western States Petroleum Association, issued a statement criticizing the legislation. “Legislators still fail to understand our industry or what drives high gas prices,” Reheis-Boyd said. “Regulators remain fixated on controlling businesses with more taxes, fees, and costly demands.” She and other industry representatives argue that the law places an unnecessary burden on the industry, which could have the opposite of its intended effect, driving up prices instead of stabilizing them.
Republicans in the Legislature also voiced their opposition, with Assembly Republican Leader James Gallagher making a motion for lawmakers to adjourn before the bill could be voted on. Gallagher and other Republicans introduced their own proposals aimed at lowering gas prices, but those efforts were blocked by the Democratic majority. One such bill, which failed to advance, proposed exempting transportation fuels from California’s cap-and-trade program, which is designed to reduce greenhouse gas emissions but has been criticized for contributing to higher fuel costs.
Newsom originally unveiled the legislation in August during the final week of the regular legislative session. However, lawmakers in the Assembly argued that they needed more time to fully consider the bill. As a result, Newsom called the Legislature into a special session to ensure that the bill would be passed. This is not the first time Newsom has taken decisive action on energy prices; in 2022, he convened another special session to push through legislation aimed at penalizing oil companies for generating excessive profits during periods of high gas prices.
State Senate President Pro Tempore Mike McGuire praised the new law, calling it a critical step toward easing the financial burden on Californians. “This bill sets the stage to ease gas price spikes and provide additional certainty through enhanced storage and oversight,” McGuire said. “I firmly believe Californians are tired of the price spikes.” He emphasized that the legislation was just one part of the state’s broader efforts to lower the cost of living for residents, many of whom have been hit hard by high energy costs and inflation.
The passage of this law represents a victory for Newsom in his ongoing efforts to hold the oil industry accountable for what he views as exploitative practices. However, the law’s long-term impact on gas prices remains to be seen. While supporters believe that increased oversight and fuel reserves will help prevent price spikes, opponents warn that the added regulations could backfire, leading to higher costs and safety risks.
As the state moves forward with implementing the new law, the debate over how best to balance environmental regulations, industry oversight, and consumer protection will likely continue to play out in California’s ongoing struggle with high energy costs.
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