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James Gallagher
Assemblyman James Gallagher. (Photo: Kevin Sanders for California Globe)

Governor Newsom’s Gas Tax Scheme Passes Assembly – But Not Without a Splendid Fight

‘Stand up for yourselves – We make the policy’

By Katy Grimes, March 27, 2023 5:20 pm

UPDATE below: The California Assembly hosted a side show Monday, when after jamming SBX1-2, Gov. Gavin Newsom’s Gas Tax, through an expedited hearing earlier, pretended that was enough exposure to the public, and debated the bill and voted on it.

Gov. Gavin Newsom’s Gas Tax, as it is being called in some circles, would create a new panel of unelected bureaucrats with subpoena power, to investigate oil and gas companies, impose penalties, new costs and regulations, which would inevitably lead to gas shortages, rationing and price spikes. The bill creates a new government agency to arbitrarily decide how much profit oil and gas businesses are allowed to make, disrupting California’s energy market and threatening the reliability of the state’s fuel supply, according to Assembly Republicans.

The governor’s scheme is to “create a new independent watchdog within the California Energy Commission charged with monitoring California’s petroleum market on a daily basis to ensure market participants play by the rules.”

Like something out of Venezuela, where the oil and gas industry were nationalized, the amended bill actually states:

This bill would authorize the commission to establish a maximum gross gasoline refining margin at an unspecified amount per gallon and would authorize the commission to annually adjust the maximum gross gasoline refining margin, as provided.

The bill would require the commission, if the commission establishes the maximum gross gasoline refining margin, to establish a penalty for exceeding the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to petition the court to enjoin a refiner from exceeding the maximum gross gasoline refining margin. The bill would also authorize the commission to assess impose an administrative civil penalty on a refiner for exceeding the maximum gross gasoline refining margin.

Democrat Assembly leaders and members however, also received a lesson in Econ 101 and Civics.

Assembly Republican Leader James Gallagher asked Assembly colleagues why they would allow Gov. Gavin Newsom to drive state policy with his bill, which was only in print one week. While the Extraordinary Legislative Session was called back in December 2022, ostensibly to address the “windfall profits” of the oil and gas industry in California, according to Gov. Newsom, there has been plenty of time to openly debate how to address the governor’s concerns, as well as hear from the oil and gas industry.

As California Globe contributor Chris Micheli recently addressed, “For those watching the Senate and Assembly Floors on Thursday, March 23, 2023, one bill jumped through several procedural hurdles in a single day. The bill is SBX1-2 (or SB 2x) dealing with the maximum gross gasoline refining margin. It is a special session (in the First Extraordinary Session) bill.”

“Because SB 2x is a special session bill, it is not subject to a number of legislative rules,” Micheli explained – which explains the antics.

However, Republicans duly noted that Democrats and the governor have had 6 months to present the bill in various committees and debate its merits. “You are about to vote on a bill in print one week,” Assemnbly republican Leader Gallagher said. “We’ve been in extraordinary session six months.”

“You are allowing the governor to drive policy, and not the Legislature,” Gallagher said. “He doesn’t care about our ideas. The whole time we’ve heard one idea – his. No other bills or ideas got heard – there was no discussion.”

“You’ve gotten a week. What kind of process is this?” Gallagher asked incredulously.

“Stand up for yourselves – We make the policy,” Gallagher added.

He said the Assembly could continue to hold the extraordinary session and listen to all of the ideas and proposals. And he noted at one hearing on an earlier version of the gas tax increase, Berkeley and Stanford experts agreed the policy would lead to higher prices.

“Democrats have spent years driving up the cost of gas with a steady stream of taxes, fees and regulations. This bill is no different,” said Gallagher. “When we see gas lines and soaring prices, Democrats will have only themselves to blame, and I’m confident that Californians will hold them accountable. If Democrats were serious about lowering gas prices, they would back our efforts to give drivers a gas tax holiday.”

Assemblyman Bill Essayli. (Photo: ad63.asmrc.org)

Assemblyman Bill Essayli (R-Riverside) said that it is California policy driving up gas prices. And he noted that is exactly what Democrats want – to drive up gas prices enough, that people are forced out of their cars and onto public transportation. “I’m saying the quiet part out loud, that the state wants to drive people away from gas powered cars,” he said.

“Interest groups want people out of their cars,” he added, noting that most of the bill’s supporters are environmental justice and climate change groups.

Today California imports about 75% of the oil we consume. In 1982, California had 43 operational oil refineries and a population of nearly 25 million; today we have 11 operational oil refineries and a population of nearly 40 million.

Ironically, Essayli said that the California Energy Commission, which will oversee the new oil and gas regulatory commission, can’t even manage California’s electricity prices. “If the CEC can demonstrate they can bring down electricity prices, then maybe we give them this.”

Essayli also noted that if it’s excess profits Democrats have such a problem with, Gov. Newsom’s own state budget is exceedingly larger than last year’s, and the year before, and the year before. “What about government excess profits?” he asked.

Assemblyman Vince Fong, a Republican who represents Kern County and the oil industry said,  “With little public input, the Governor jammed his proposal that demonizes domestic energy production in our state – a policy that will only harm hard-working Californians. By creating a hostile business climate, the Governor is putting Californians out of work and will make California more dependent on foreign sources of oil and natural gas.”

As one oil and gas industry expert told the Globe recently, “Currently, the convenient scapegoat for all our pain at the pump is Vladimir Putin. Well, historical facts in California paint a different picture. California set it’s record for the retail cost of gas in June of 2008 at $4.53 a gallon, according to the Energy Information Agency (EIA), Global oil averaged $131.00 a barrel that month. In October 2012 we hit that cost of gas again but crude only averaged $103.00 that month. We broke that all time record, not when Putin invaded Ukraine, but on November 15, 2021, when crude oil averaged $82.00 a barrel- more than 3 months before the invasion of Ukraine. The prices of gas and diesel have continued to climb since that day.”

When it came time for the entire Assembly to vote, SBX1-2 passed 52-19 on the floor.

Assemblyman Health Flora (R-Ripon) made a motion to lock the roll vote, and not allow any add ons, which is typically happens when not all members cast a vote during the floor debate and voting. His motion didn’t pass but as the Globe Tweeted, remember these votes:

California Assembly SBX1-2 vote. (Photo: screen capture assembly.ca.gov)

We will follow up and report who changes their vote, or adds on.

UPDATE March 27, 2023: The final vote was 58-19 with 3 non-votes. The 6 add-on votes were Assembly members Mike Gipson, Stephanie Nguyen, Cottie Petrie Norris, Freddie Rodriguez, Avelino Valencia, and Carlos Villapudua. One Democrat voted no: Assemblywoman Jasmit Baines.

For more information, read: Gov. Newsom’s ‘Stronger Proposal to Hold Big Oil Accountable’ is Full of Organic Matter, where we explain how and why you are paying the same or less for the crude oil contained in a gallon of gas or diesel, but a lot more for government.

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22 thoughts on “Governor Newsom’s Gas Tax Scheme Passes Assembly – But Not Without a Splendid Fight

  1. Excellent to hear about “a splendid fight.” A real stirring up that sure sounds like progress.

  2. Democrat Assembly leaders and members received a lesson from Assembly Republican Leader James Gallagher? That’s doubtful? Democrats fall in line and do whatever hair gel Hitler Newsomlini commands.

    1. Democrats were provided the Civics lesson – I don’t know if it was received or not. But they heard it.

    2. They have NO capacity to THINK for themselves….if they EVEN dare to cross the line…they know they will be CANCELLED….it’s ALL about HAIR GEL and prepping him for the WH…which I hope will never be.

  3. “The governor’s scheme is to “create a new independent watchdog within the California Energy Commission charged with monitoring California’s petroleum market on a daily basis to ensure market participants play by the rules.”” No, The governor’s scheme is to drive petroleum out of the state to so that “green” is all that available. California is on the path to being a “turd-world” country where we have oxen pulling shells of old automobiles for transportation.

  4. Thumbs up to Assemblyman James Gallagher! At least someone in the Legislature will stand up to Governor Climate Change!

    1. YES, John. Applause and appreciation for Asm Bill Essayli, too, who has really come out swinging since being elected to the assembly. Grateful to other outspoken legislative Republicans, too.
      I am not aware of any other reporter in California but Katy Grimes who has laid out in such detail what is going on here with the gas price issue, just to name one thorn in our side. It counters the fake “Big Oil is gouging” narrative so effectively that — if what she has written is well enough understood by the public — it is only a matter of time before the ridiculous Dem/Marxist wall begins to crack from the pressure. Dem votes have turned before and they can turn again. These effective Repub voices arguing for the true facts on such a high-profile issue paired with pressure from the public CAN eventually turn the tide. But we have to be vigilant and do our part to keep the pressure on the Dem go-alongs.

      1. Showandtell, I watched a video a couple of months ago involving two pickup trucks pulling identical 7,000lb camper trailers east of Denver. One truck was an electric GMC Hummer and the other truck was Dodge Ram 2500 diesel. The objective was to see how far each truck could go on a “fill up” pulling identical trailers. The electric Hummer ran out of electrons at 126 miles. 126 FREAKING MILES!!! That certainly bodes well for California’s electric vehicle future.

  5. Why isn’t Rudy Salas listed on the voting screen?

    I’m not complaining – Vince Fong is a much better representative for Kern County.

    1. Rudy Salas left office December 5, 2022 – after running for Congress against David Valadeo and losing Nov. 2022.

  6. Asm Jasmeet Bains was the lone Democrat to stand strong and vote NO on this tax scheme, indicating she was unwilling to throw her constituents under the bus. Makes sense to sensible people who still have their wits about them! Gov Newsom responded to her tweet with what sounded like a threat to isolate her. Go check out the Globe/Katy Grimes twitter feed.
    Great admiration here for this Democratic Assemblywoman! She will prevail against the Newsom-led bullying.

  7. The California voters chose this madness. I blame THEM. They are addicted to self-destruction on liberty, economics, and energy issues. SUICIDAL.

    1. That’s right Abe. It’s got nothing to do with voter fraud or ballot harvesting, does it?

    2. No, no we didn’t… the electronic voting systems did it for us…
      We voted to recall Newsom….

  8. If I was the oil and gas industry, I would just pull out of California completely. Declare that the state is so hostile to them that there is no point even selling gas in the state anymore. Close all the refineries, all the gas stations and just let the Democrats spin as they face a massive mob of angered voters who can no longer put the gas in their cars that they need to go to work and actually be productive.

  9. The California Democrat Supermajority have embarrassed and belittled themselves!
    They look like the lapdogs that they are.
    Gov Gav says jump and they respond with “how high?”

    I guess it is an easy paycheck for them. Seriously, what an embarrassment.
    We have no representation. They can’t even do the job they so desperately campaigned for. They really are empty suits and pantsuits.

  10. ““I’m saying the quiet part out loud, that the state wants to drive people away from gas powered cars,” he said.”

    This is Newsom and his Democrat cabal executing their World Economic Forum Agenda 2030 playbook… No ICE engines, preferably no individual automobiles at all (and electric ones that can be shut down centrally), 15-minute cities loaded with “stack & pack” housing, no yards and no meat, preferably insect-based protein sources….

    Think I’m kidding or making this up?

  11. How will this Bill drive up gasoline prices, when oil prices are determined by global oil supply and demand?

    1. How you ask?
      Increased taxes.
      More regulations will lead to higher prices.
      Penalties and fines will be passed to the consumer.
      Also, some producers will just pack up and scarcity will set in and lead to higher prices.
      Just in case your question was not rhetorical.

    2. @Earl Richards. It is true that a portion of the price of oil in California is determined by global oil supply and demand – the price of wholesale oil which is currently around $78/barrel (Brent crude) . That oil has to be imported, refined and distributed from somewhere domestically to retailers (your local gas station). During the Trump administration, domestic oil production was maximized so that we were not so dependent on foreign oil imports (the global oil supply) and domestic gasoline prices were much lower, even in California. In fact, we were an oil exporting nation. Although, California’s gasoline prices remained highest among the states because of state tax policies and regulations (through agencies like CARB, CEC and local authorities) that increase the COST of in-state gasoline production, distribution and, therefore, PRICES within the state. In other words, there is a positive correlation between the price of gasoline in California and the number of in-state regulatory agencies. The more agencies involved (which is what this Bill creates) the higher the gasoline prices. In addition, the Biden administration has blocked all of the Trump policies to increase domestic production and distribution, so we are now back to depending on foreign imports and we have a nationwide gasoline price spike. California just gets the worst of it – a double whammy. Dumb and getting dumber, if that is even possible. Hope this helps. 🙁

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