Gov. Newsom Signs New Minimum Gasoline Reserve Law to Prevent CA Gasoline Price Spikes
The oil industry spent around $8.3 million on lobbying in published disclosures for the second quarter of 2024.
Sacramento, CA – Consumer groups yesterday lauded California Governor Gavin Newsom’s signing of California’s new gasoline minimum inventory law, ABX2-1, as a “pivotal moment” in the fight against California gas spikes, while the oil industry condemned the bill for “ignoring” their concerns.
“The single most important thing California can do to prevent gasoline price spikes is to require adequate inventories when refineries go into periods of maintenance,” said Consumer Watchdog president Jamie Court. “Governor Newsom rightly called a special session to make sure this critical protection for consumers takes effect in 2025, not 2026. Other states that want to protect against refiner profiteering, like Washington, would be well advised to adopt the same protections.”
“The legislature answered the Governor’s call over the objections of Chevron and the other three big refiners that make 90% of California’s gasoline and sent a signal that California won’t fall for the same old games that have plagued the state with price spikes for two decades. The problem has been well established since the time of the 2000 Attorney General Gas Pricing Taskforce but this is the first time any Governor has taken on the big oil refiners to make them play fair,” he said.
Court also urged other states to pass legislation similar to ABX2-1.
“Governor Newsom is to be congratulated for breaking through the taboo in Sacramento that you can’t beat Big Oil. Other states should be encouraged to follow in California’s footsteps,” Court concluded.
ABX2-1 — authored by Assemblymembers Gregg Hart and Cecilia Aguiar-Curry and Senator Nancy Skinner — allows the state to require oil refiners to maintain a minimum inventory of fuel to avoid supply shortages that create higher gasoline prices for consumers and higher profits for the industry, according to the Governor’s Office. It also authorizes the California Energy Commission to require refiners to plan for resupply during refiner maintenance outages. A signing message can be found here.
“Price spikes have cost Californians billions of dollars over the years, and we’re not waiting around for the industry to do the right thing — we’re taking action to prevent these price spikes and save consumers money at the pump,” said Newsom in a statement. “Now, the state has the tools to make sure they backfill supplies and plan ahead for maintenance so there aren’t shortages that drive up prices. I’m grateful to our partners in the Senate and Assembly for acting quickly to push this forward and help deliver relief for Californians.”
In advance of the ABX2-1 final Assembly vote, the Western States Petroleum Association (WSPA), the largest and most powerful corporate lobbying group in Sacramento, blasted the legislation as a “smokescreen for future government gas price hikes.”
“Our government leaders spent significant time and money in a special legislative session and came up empty-handed,” said WSPA President and CEO Catherine Reheis-Boyd, the former head of the Marine Life Protection Act (MLPA) Initiative Blue Ribbon Task Force to create marine protected areas in Southern California, in a statement.
“Even worse, they knew a 47-cent-per-gallon gas tax increase is coming in 2025, and this session served as a smokescreen to hide it from Californians. Legislators still fail to understand our industry or what drives high gas prices. Regulators remain fixated on controlling businesses with more taxes, fees, and costly demands,” she stated.
“Most alarming, our leaders ignored the men and women in the oil and gas industry who stepped forward to offer real expertise and express grave concerns,” she continued.
“For Californians hoping for lower energy prices, stable food costs, and answers about the approximate $1.30 per gallon in taxes and fees they already pay at the pump—they’ll have to wait for new leadership,” Reheis-Boyd-Boyd claimed.
The oil industry continues to spend millions of dollars lobbying California officials to thwart climate bills and other environmental legislation opposed by Big Oil.
The oil industry spent around $8.3 million on lobbying in published disclosures for the second quarter of 2024. Aera Energy and California Resources Corporation, Chevron, and the Western States Petroleum Association (WSPA) spent a combined $6.8 million alone.
Chevron topped the oil industry spending with $4,070,286 pumped into lobbying, followed by the Western States Petroleum Association with $1,782,919 and Aera Energy with $784,852.
The $15.3 million spent in the first two quarters sets Big Oil to surpass its $26.2 million record set in 2017, according to a statement from the Last Chance Alliance. In 2023, the second-highest industry spending year on record after 2017, Big Oil spent around $25.4 million.
The Alliance forecasted that for a two-year legislative session, the oil industry is “likely to spend more than it ever has on a biennial basis — $44 million in 2017-2018 — by the end of the year, already sitting at $42 million spent halfway into 2024.”
“Chevron, Aera, and CRC — collectively the top idle wells holders statewide — all lobbied to stave off the legislative momentum amassing around AB 1866, a bill which would compel oil drillers to plug all idle wells statewide within a decade. Their lobbying group, WSPA, also lobbied against the bill — as did California Independent Petroleum Association (CIPA), another oil industry lobbying group,” the Alliance revealed.
WSPA and Big Oil wield their power in 8 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups; (5) working in collaboration with media; (6) creating alliances with labor unions; (7) contributing to non profit organizations; and (8) sponsoring awards ceremonies, including those for legislators and journalists.
WSPA and Big Oil have for years worked closely with media outlets and more recently have sponsored awards for legislators and journalists. For example, the Western States Petroleum Association was one of the “lede sponsors” of the Sacramento Press Club’s Annual Journalism Awards for the past two years: sacpressclub.org/...
