Gavin Newsom enacted a law empowering state bureaucrats to monitor and control inventory levels at oil refineries, aiming to prevent gas price hikes.
Democratic California Gov. Gavin Newsom enacted a law Monday that will empower state bureaucrats to monitor and dictate inventory levels at oil refineries to prevent gas price hikes. [emphasis, links added]
Newsom signed ABX2-1, which will enable regulators to require oil companies to keep a minimum level of fuel on hand and permit the California Energy Commission (CEC) to mandate refiners to make plans to provide resupply during outages for maintenance.
While proponents say the bill is a key step to prevent major corporations from gouging consumers with artificially high prices at the pump during periods of low supply, industry interests have slammed the bill as political hostility directed at the oil and gas industry.
“With this new law, big oil companies are now responsible for stabilizing prices at the pump. It’s a critical accomplishment, but our work is not done,” California Assembly Speaker Robert Rivas, a Democrat, said of the new law.
“I will continue to fight to lower the cost of living, because housing, groceries, and everyday necessities must be more affordable for all Californians.”
Andy Walz, a senior executive at Chevron, slammed the new bill in a Tuesday letter to state lawmakers.
Chevron opted in August to move its headquarters out of California, a decision that Walz described as motivated partly by California’s unforgiving business environment.
“Chevron is concerned by the recent Committee and Assembly passages of ABX2-1 and seeks to address some of the inaccurate and flawed arguments made by its proponents. As the Senate prepares to vote, it is crucial that it makes a fact-based decision. The political posturing that has characterized these proceedings must stop, including baseless and frankly ridiculous claims that the industry is engaging in price gouging,” Walz wrote in his letter.
Walz added that “the claim that regulation is justified because ‘price spikes are profit spikes’ is misleading” and that “these statements about price spikes also overlook that supply shortages are an outcome of California’s regulatory policy and fail to reflect the energy industry’s cyclical nature.”
The Western States Petroleum Association, a trade association, also ripped the new law, saying that “regulators remain fixated on controlling businesses with more taxes, fees, and costly demands” in a Monday statement.
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