On Thursday, a California Assembly panel voted to advance two bills aimed at reducing seasonal gasoline price spikes. This special session was called by Governor Gavin Newsom. However, the panel rejected a third bill proposed by Assembly Republican Leader James Gallagher. Gallagher’s bill sought to exempt gasoline from the state’s cap-and-trade program, which GOP legislators argued would have immediately lowered gas prices for drivers.
The primary bill, introduced by Newsom during the last days of the legislative session, mandates that oil refineries maintain a supply of gasoline using their existing storage facilities. It also tasks the California Energy Commission with developing specific regulations. This measure aims to ensure that refineries have larger reserves available in case of maintenance shutdowns. According to market regulators, price spikes have cost California drivers up to $2 billion and have directly benefited oil companies.
Assembly member Gregg Hart, a Democrat from Santa Barbara and author of the bill, stated, “This legislation aims to protect the health and safety of the workforce and frontline communities around refineries while also safeguarding consumers from skyrocketing gas prices. It is not an easy task, but it is a worthwhile endeavor.” However, various industry, business, and labor groups expressed concerns. They fear that additional regulations might lead to more refinery closures and may compromise worker safety in favor of lower prices. Two Democrats on the committee abstained from voting, seeking stronger assurances from state regulators that the proposed measures would effectively reduce gasoline costs.
The Western States Petroleum Association has opposed the proposal since its introduction in late August. Lobbyists from the group have criticized California’s stringent environmental rules, asserting that increased regulations will further elevate prices. In response, Assembly member Cottie Petrie-Norris, who chairs the special session committee, countered that the current situation costs between $1 billion and $2 billion annually. She argued that the proposed alternative would only cost $50 million, citing analysis from the energy commission.
“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 a WSPA lobbyist. “And to this moment, you have been unable to present the reason that their math is wrong.”
Additionally, the committee approved a second bill that will instruct regulators to study the effects of increasing the ethanol content in California’s fuel blends from 10% to 15%. Petrie-Norris, who also authored this proposal, believes it could save California drivers $2.7 billion and provide environmental benefits.
The committee rejected Gallagher’s third bill aimed at exempting 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 their emissions. Gallagher criticized the special session’s focus, stating, “The price is already too damn high. I’m thinking about the average Californians, the working Californians.”
The two bills that passed on Thursday followed over 15 hours of public hearings on the issue. The full Assembly is scheduled to meet on October 1 to vote on the proposals. Meanwhile, the state Senate has yet to formally begin its special session. Senate President pro Tem Mike McGuire expressed interest in approving the minimum inventory proposal during the regular session that concluded in August. McGuire’s office indicated that the Senate would need time to review any amendments to the 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 stated. “If substantial changes are made to the bill, or if additional bills are added, the Senate will need to review those new policies thoroughly.”
On Thursday, Governor Newsom met with environmental and consumer advocates who support the minimum inventory proposal. He stated, “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. Last year alone, price spikes cost California families billions of dollars while refiners made record profits. With the help of the legislature, we’re going to protect Californians from future price gouging.”
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