From the Daily Caller
Nick Pope
Contributor
Democratic California Gov. Gavin Newsom on Monday enacted a law empowering state bureaucrats to monitor and regulate refinery inventory levels to prevent rising gas prices.
Newsom signed ABX2-1, which will allow regulators to require oil companies to maintain minimum levels of fuel on hand and allow the California Energy Commission (CEC) to require refineries to develop plans to provide supplies for maintenance during outages. While supporters say the bill is a critical step in preventing big companies from defrauding consumers by artificially inflating oil prices during periods of supply shortages, industry interests have blasted the bill as politically hostile to the oil and gas industry.
“With this new law, Big Oil now has the responsibility to stabilize prices at the pump. This is an important achievement, but our work is not done yet,” California Assembly Speaker Robert Rivas, a Democrat, said said when it came to the new law. “I will continue working to lower the cost of living because housing, groceries and everyday necessities must be more affordable for all Californians.” (Related: Blue-state Democrats abandon plan to extend life of zero-emission power plants)
Top Chevron executive Andy Walz blasted the new bill in a letter to state lawmakers on Tuesday. Chevron chose to move its headquarters out of California in August, a decision Walz said was driven in part by the state's tough business environment.
“Chevron is concerned about the recent committee and Assembly passage of ABX2-1 and seeks to address some of the inaccurate and flawed arguments advanced by its proponents. As the Senate prepares to vote, it is critical to make fact-based decisions. The political posturing that characterizes these proceedings, including the baseless and frankly ridiculous claims that the industry is driving up price gouging, must stop,” Walz wrote in the letter.
“It is misleading to argue that regulation is justified because 'higher prices mean higher profits,'” Walz added. “These statements about rising prices also ignore that supply shortages are the result of California's regulatory policies and fail to Reflecting the cyclical nature of the energy industry. The Western States Petroleum Association, an industry association, also dismissed the new law in a statement on Monday, saying “regulators remain focused on reining in companies through more taxes, fees and costly requirements.”
According to AAA natural gas price data, California currently has the highest natural gas prices among U.S. states. Energy experts previously explained to the Daily Caller News Foundation that while many California Democrats blame these prices on corporate greed and manipulation, strict environmental regulations and taxes on energy producers are the main reasons for driving up these costs.
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