Nick Pope
Contributor
Democratic California Gov. Gavin Newsom enacted a law Monday that will empower state bureaucrats to monitor and dictate inventory levels at oil refineries in an attempt to prevent gas price hikes.
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.” (RELATED: Blue State Dems Throw Wrench In Plan To Extend Life Of Zero Emission Power Plant)
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 in part by California’s unforgiving business environment.
“Chevron is concerned by the recent Committee and Assembly passages of ABX2-1 and seek 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.
California currently has the highest gas prices of any state in the U.S., according to AAA gas price data. While many California Democrats blame corporate greed and manipulation for those prices, stringent environmental regulations and taxes on energy producers are primarily responsible for driving up those costs, energy experts previously explained to the Daily Caller News Foundation.
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Just Stop Oil for Califorlorny so the homeless can get Green jobs!
It’s probably a good thing that Gavin Nuisance isn’t running in Kamala’s stead
Isn’t California the home to boutique blends of gasoline fuels too?
Its not as simple as stocking one blend of ‘gasoline’ in storage tanks, its the specific blends called for at different times of the year as well …
Man, why do you focus on such itty bitty trees? Newsom’s got the whole forest to think of, and all your itty bitty mind can think of is itty bitty trees?
C’mon, man!
It’s not that itty bitty if you happen to be filling your tank at $5.95.9 per gallon instead of the National Average $3.26.9. Thats $80 per tank vs $45 every week or $4,640 vs $2,540 per year … not small trees
The downward spiral continues.
Do ANY Democrats understand basic economics?
Say the refiners are looking for a risk-adjusted 6% ROI to keep their California operations going. There are large portions of the year where they may only be making a 3-4% return. I suspect that over most two year periods, the refiners had a brief period of higher profits during a spike, that allowed their average returns to be acceptable.
California gas prices now going UP in … 3, 2, 1.
No, they don’t.
They only understand the version they learned in “college,” which these days is worth less than a turd on the sidewalk.
See economics degree holder AOC who thinks thete are no consequences to printing all the money you need to do whatever you want. 🤬
They understand “opportunity economics” wetf that is.
Why nationalize an industry when you can control its every decision by bureaucratic fiat? Same disastrous socialist failure.
You misspelled fascist.
Because nationalization would be Communist, and notwithstanding all the self-proclaimed Marxists in academia, this is realpolitik where they can’t do that.
So they borrow a page from the fascists and Nazis and let you keep your property as long as you dance their tune. And that makes you the fascists!
It’s very clever. Don’t you admire clever people?
Hobbling a horse, then blaming it for not running fast enough.
The political results of a one party state are always the same. The state takes power because they can.
Californians can change this at anytime at the ballot box. They won’t of course and so people vote with their feet instead. This is what is happening in California now. Eventually the whole house of cards collapses as there are no controls and productive people leave.
In my opinion,the unions basically run politics in California from the SEIU to the Teachers Union to the smaller unions such as the Prison Guards union, State Police union and on and on. They have a huge vested interest in supporting democrats ie pension plans etc. I first moved there in 1973 when the state was basically conservative and watched it deteriorate over the years.
You’re exactly correct. Public Employee unions.
People (illegals) vote with their feet to go INTO Wokeachusetts which takes great care of them- giving them everything they need- at tremendous cost.
No wonder people and businesses are exiting California in its’ race to the bottom. One party states do not represent Democracy.
“With this new law, big oil companies are now responsible for stabilizing prices at the pump.”
Literal reading is probably not what it’s speaker wanted to say, yet true in a way the speaker probably dies not advertise.
They’ll be “stabilized” at a higher price.
And the only reason the Eco-Nazis running CA give a rat’s ass about gas prices is because it hurts them politically. They would LOVE to just BAN gas cars in Commiefornia.
Back in the early 1980s I had to point out to the IEA and the British government that inventory mandates (post Iranian revolution) have a substantial cost: they have to be financed, and the tankage must be available and maintained. The result is higher pump prices, unless government wants to fund the cost, in which case it is higher taxes.
Those in the industry are actually mostly very well tuned to inventory management, and particularly for such issues as covering refinery turnarounds, where buying in product all at once to cover for a shutdown refinery just pushes up your costs and makes your filling stations uncompetitive.
NYMEX offers the opportunity to hedge commodity cost by the multi truckload (21,000US gallons): it cannot offer a hedge against regulatory stupidity.
I can’t wait for Cali-4-ni-yay’s first Five Year Plan!
Lousy and corrupt government doing what it does best. Screwing everything up. They are disgusting.
Someone here at WUWT referred to the Governor as Gabbing Nuisance, I intend to steal that moniker and employ it at every opportunity.
Oh yeah! Good one!
In addition to dictated the minimum wholesaler reserves, the economic geniuses that run California could also require that all new gasoline cars are to be equipped with a secondary fuel tank that is at least 20% as large as the primary tank; then mandate that the small tank volume cannot be depleted except for emergencies and that it has to be full at all times.
Put the cost & inefficiency not only where the voters can see it … put it where they feel it directly.
CA gas prices are high because of excessive government regulation and meddling.
So the solution must be…MORE excessive government regulation and meddling!
Something about the “definition of insanity” comes to mind…
California has the highest state taxes on gasoline in the US: . . . as of January 2024, at a whopping 68.1 U.S. cents per gallon, or about 15% of the average price of $4.46/gal for all grades of gasoline for all of 2023 (ref: https://taxfoundation.org/data/all/state/state-gas-tax-rates-2024/ )
And what have California ICE motorists received in exchange for those taxes? Zippo . . . Nada . . . a big fat NOTHING! California roadways, from freeways to city streets to suburban neighborhoods to rural roads, are in pitiful disrepair with a degree of dangerous potholes and undermining/landslides that have repeatedly made national news. Also, congestion on most roadways has increased dramatically due to the State’s lack of building new roads/widening existing ones, despite many billions raked in from gas taxes each year:
“. . . the motor vehicle fuel taxes generated $6.5 billion in revenue in 2021–22 and will produce an estimated $7.4 billion in 2022–23,”
— https://advocacy.calchamber.com/policy/issues/californias-gas-tax/ , published January 2023
California has the means to readily lower gas prices for its citizens, if only its bureaucrats would stop feeding so voraciously at the public trough.
The clowns are running the circus in this state. We’re doomed.
…..and more of them keep coming out of the car…
it is amazing that sooo many of the fricking dem clowns can fit n that car.
I fret that in too few years we will all be pining for the “good-ol-daze” of gas at $5.99-6.99 a gallon. Now with Phillips pulling the plug on another of our few remaining refineries that day will be coming very soon.
Arizona and Nevada will likely become collateral damage, soon to be sucked into the black hole of California…