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(The Center Square) – “With this legislation, we’re ending the oil industry’s days of operating in the shadows. California took on Big Oil and won.” Governor Gavin Newsom announced at the signing of the latest legislation touted to rein in the oil and gas industry.
The law is the latest in a slew of new oversight for the oil industry following last year’s legislation on reporting requirements, and drilling restrictions in sensitive areas like neighborhoods and schools.
The approval of SBX1-2 created two new entities within the California Energy Commission (CEC). The yet to be formed Division of Petroleum Market Oversight which will gather data on pricing practices and other relevant industry information and then provide guidance to the governor and the CEC.
The Independent Consumer Fuels Advisory Committee whose members are also from the CEC, would give advice to the division and the CEC.
The strongest state-level oversight and accountability measures on Big Oil in the nation is expected to bring” transparency” to California’s oil and gas industry.
“We’re not only protecting families, we’re also loosening the vice grip Big Oil has had on our politics for the last 100 years,” Newsom said.
SBX1-2, known to Republicans as the “Gavin Gas Tax,” was authored by Senator Nancy Skinner and passed by a super majority in both the Senate and the Assembly. It is expected to cost between $7 million and $10 million to administer.
“I am proud of my colleagues for passing this first-in-the-nation protection against price gouging by Big Oil,” Skinner said in a statement released by the Governor’s office. “This landmark law will allow us to hold oil companies accountable if they pad their profits at the expense of hard-working families. With SBX 1-2, California has sent a clear message to the oil industry: Open your books and prove you’re not price gouging, otherwise Big Oil will pay the price — not consumers.”
Newsom had initially proposed a windfall tax on oil companies which would go back to California taxpayers, in September, but any such plan is still unclear and has not yet been disclosed.
Experts warned California officials against policies increasing gas prices and the need for caution in crafting legislation. The number of refineries operating in California have been steadily in decline with just 9 refineries remaining who can create the special-blend gasoline the state demands.
The law will go into effect on June 26, the 91st day after the end of the special session.
Ria Roebuck Joseph is a contributor at The Center Square.
Originally published by The Center Square. Republished with permission.
To read more about California energy policy, click here, here, and here.
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Regarding those taxes on “excess” profits in the oil industry, with crude being the largest component in the cost of fuel, how is Newsom going to tax Saudi Aramco?
Recently, Saudi Aramco reported the historic record profits of $161 billion in 2022‼️ More than those made by the 5 largest international oil companies – Exxon, Chevron, Shell, BP and Total Energies – combined together….
https://media.licdn.com/dms/image/D4E22AQH8O5mQmG6u3A/feedshare-shrink_1280/0/1679834241852?e=1683763200&v=beta&t=CMDlqL8p0Y9ykseaWZVnFvvO4zRJ-dtdIFn5ITSQR6A
Newsom, by continually decreasing in-state oil production, Newsom’s energy policies continue to force California, the 4th largest economy in the world, to be the only state in contiguous America that imports most of its crude oil energy from foreign countries. That dependence, via maritime transportation from foreign nations for the state’s crude oil energy demands, has increased imported crude oil from 5 percent in 1992 to almost 60 percent today of total consumption.
California’s growing dependency on other nations, like Saudi Aramco, some not particularly friendly to America, is a serious national security risk for all of us. It also deprives Californians of jobs and business opportunities and forces drivers to pay premium prices for fuel.