SACRAMENTO, Calif. – California Gov. Gavin Newsom signed a law Monday aimed at preventing gas prices from spiking, marking the Democrat's latest move in a battle with the oil industry over energy prices and the impacts of climate change.
Californians pay the highest rates at the pump in the U.S. due to taxes and environmental regulations. The average price for regular unleaded gas in the state was about $4.68 per gallon as of Monday, compared to the national average of $3.20, according to AAA.
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The new legislation was inspired by findings from the state’s Division of Petroleum Market Oversight that showed that gas price spikes are largely caused by increases in global crude oil prices and unplanned refinery outages. The law gives energy regulators the authority to require that refineries keep a certain amount of fuel on hand. The goal is to try to keep prices from increasing suddenly when refineries go offline for maintenance. Proponents say it would save Californians billions of dollars at the pump.
Newsom joined lawmakers at the state Capitol to sign the law and criticized the oil industry for its efforts to keep the legislation from passing.
“They continue to lie, and they continue to manipulate,” he said. “They have been raking in unprecedented profits because they can."
Newsom signed the measure just weeks ahead of the November election, but he said the legislation was not about politics. He has two years remaining in his second term.
Opponents of the law have said it could unintentionally raise overall gas prices and threaten the safety of workers by giving the state more oversight over refinery maintenance schedules. Some argued delaying necessary maintenance could lead to accidents.
“Legislators still fail to understand our industry or what drives high gas prices," said Catherine Reheis-Boyd, president of the Western States Petroleum Association, in a statement. "Regulators remain fixated on controlling businesses with more taxes, fees, and costly demands.”
Assembly Republican Leader James Gallagher made a motion for lawmakers to adjourn before the Assembly voted to send the bill to Newsom's desk Monday. Republicans introduced proposals of their own aimed at lowering gas prices, but they were blocked in the Democrat-dominated Legislature. One of the bills that failed to advance would have exempted transportation fuels from the state’s cap and trade program.
Newsom unveiled the legislation in August, during the last week of the regular legislative session. But lawmakers in the state Assembly said they needed more time to consider it. The governor called the Legislature into a special session to pass it.
Newsom also called lawmakers into a special session in 2022 to pass legislation aimed at penalizing oil companies for making too much money.
State Senate President Pro Tempore Mike McGuire said the new law is just one part of the state's efforts to help lower the cost of living for Californians.
“This bill sets the stage to ease gas price spikes and provide additional certainty through enhanced storage and oversight,” he said. “I firmly believe Californians are tired of the price spikes.”
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Austin is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow Austin on Twitter: @ sophieadanna