(The Center Square) – California Assembly Speaker Robert Rivas, a Democrat, refused to hold a vote on California Gov. Gavin Newsom’s proposed oil and gas regulations that drew widespread backlash from the industry and from neighboring states that rely on California for its refineries.
“If the Governor calls a special session, we’re going to do the work and deliver results,” said Rivas in a statement to KCRA. “What I’m not going to do is push through bills that haven’t been sufficiently vetted with public hearings.”
The bill in question, SB 950, would have created new requirements for maintaining high supplies of gasoline reserves so when one of California’s 10 aging refineries goes down for repairs, as they often do, there would be enough supplies to ensure there are no price spikes when demand exceeds refining capacity. California has some of the most stringent refining and environmental regulations in the country, and has ordered the phase-out of new gasoline-powered vehicles by 2035.
Newsom has publicly blamed gas refiners for “greed” and “price gouging,” but his own expert appointees say increasing the supply of gasoline is key to preventing price spikes for consumers when one of the state’s handful of refineries shuts down.
Vice Chair Siva Gunda of the California Energy Commission, a Newsom appointee who testified earlier this year that his commission has found no evidence of price-gouging, said, “By increasing supply in the market, we will reduce the spot market volatility and hence protect the consumers.”
The CEC has thus been pursuing a supply and refinery maintenance mandate via SB 950 so it has a say in how much gasoline has to be stored and when refineries can be shut down for maintenance, but Chevron, the state’s largest refinery operator and producer of nearly ⅓ of the state’s refinery capacity, says this bill would result in higher consumer prices and create safety risks.
“California policymakers continue to risk making the state ‘uninvestable,’ which erodes energy infrastructure and increases consumer costs,” wrote Chevron in a letter. “Without investment in the critical energy infrastructure that allows California consumers to live their daily lives these products will, most certainly, become more expensive and unreliable.”
Chevron said giving the CEC “unbridled authority” over “maintenance” and “arbitrary inventory mandates will conflict with safety.” It also said each storage tank will cost $10 million and ten years to build, and that “constraints on permits and a gasoline vehicle sales ban” mean there’s no way to recover that capital other than passing costs “onto the consumer.”
Chevron and elected officials from neighboring states also noted concerns that the new regulation would result in less supply and thus higher prices for the Arizonans and Nevadans who rely on California refineries for their gasoline.
Newsom is pushing for a special session to enact the proposals in SB 950, and others, after the official end of the legislative session on August 31, which would mean calling back California’s full-time legislators from their time off before they normally reconvene in January.