Newsom Pushes for New Oil Refinery Regulations in Final Legislative Push

 In a dramatic turn in his ongoing battle with the oil industry, California Governor Gavin Newsom has urged state lawmakers to pass new regulations on oil refiners before the end of the legislative session. The governor's late-stage proposal aims to ensure that refiners maintain a stable inventory to avoid fuel shortages and price hikes during maintenance shutdowns.

Newsom’s move is part of his broader campaign to hold the oil industry accountable for California’s high gas prices. This proposal comes nearly two years after his special session on oil prices, which failed to achieve his goal of capping industry profits. "Price spikes at the pump are profit spikes for Big Oil," Newsom stated. "Refiners should be required to plan ahead and keep supplies steady, instead of manipulating the market for higher profits. By enforcing these requirements, we can help Californians save money at the pump."

The governor’s latest proposal faces uncertainty as Democrats previously hesitated to impose penalties on the oil industry. Instead, they opted to gather more data on oil pricing to address price spikes effectively. Last year, Democrats enacted a law to enhance transparency in the oil sector and empowered the California Energy Commission to regulate profits and impose penalties through a new regulatory process.

The new law created the Division of Petroleum Market Oversight, tasked with investigating price spikes and gathering data from the industry. This year, the division recommended that the state impose minimum inventory and resupply requirements for refiners, citing insufficient gasoline reserves to mitigate production shortfalls and maintenance impacts. "This lack of supply was foreseeable and preventable, yet refiners aren't legally bound to maintain adequate reserves," the division noted.

Assembly Republican Leader James Gallagher criticized Newsom’s proposal, dismissing it as a distraction from the real issue—state policies contributing to high gasoline prices. "If Newsom was serious about reducing prices, he would streamline gas storage project approvals and ease regulatory burdens," Gallagher argued. "Democrats have imposed the strictest regulations and highest gas taxes in the nation, and that’s reflected in pump prices."

With just two weeks left in the legislative session, it remains to be seen whether Democratic lawmakers will support Newsom’s proposal or if it will face obstacles. The Legislature has a packed agenda as it approaches the end-of-August adjournment.

Newsom’s office confirmed that the governor discussed the proposal with legislative leaders before its public announcement. The proposal has yet to be formally introduced as a bill, and details are currently limited to a press release.

Nick Miller, spokesperson for Assembly Speaker Robert Rivas, indicated ongoing discussions about the proposal. "We are continuing to talk with the governor about his petroleum market oversight proposal and will consult with Assembly members," Miller said.

A spokesperson for Senate President Pro Tem Mike McGuire did not provide a comment.

In related developments, lawmakers have upheld their end of a deal with the oil industry to withdraw a referendum aimed at overturning a law restricting new oil and gas wells near sensitive areas. As part of the compromise, Assemblyman Isaac Bryan agreed to narrow the scope of a bill imposing penalties on low-production oil wells within 3,200 feet of sensitive receptors. The bill now specifically targets the Inglewood oil field.

Bryan emphasized that enforcing the setbacks law is a significant environmental victory. "It's crucial that this oil field, which has impacted surrounding communities, contributes to a sustainable future for the residents nearby," Bryan said.