California Senate Special Committee on Fuel/Price Spikes Passes Gov. Newsom’s Bill to Create Gas Shortages

You are probably getting tired of me rhetorically asking, “If the ‘Big Oil’ companies are so greedy, why are they only greedy in California and not greedy in every state?”

The California Senate Special Committee on Fuel Supply and Price Spikes (you read that right) voted Monday to pass Governor Gavin Newsom’s proposal to decrease the state’s gas supply, which will clearly result in even higher gas prices at the pump.

Californians are already paying the highest gas prices in the entire country – even higher than Hawaii, according to AAA today. The US average price per gallon of gas is $3.18 – California’s average is $4.68 – a $1.50 difference – just about the exact amount of California’s gas taxes.

Texans pay $2.77 per average gallon of gas. That’s a difference of nearly $2.00 per gallon that Californians pay a premium for.

The highest priced gas in California is in Mono County where one gallon of gas costs $5.96. In Alpine County it’s $5.80. Humbolt County $5.41, Sacramento County $4.74, Los Angeles County $4.58, San Diego $4.60, and $5.03 per gallon in San Francisco.

California Governor Gavin Newsom called for a special legislative session after accusing California’s oil refineries of price gouging – a clear sign that he is economically illiterate, or he is trying to create gas shortages. The governor claimed that “Gas price spikes on consumers are profit spikes for oil companies, and they’re overwhelmingly caused by refiners not backfilling supplies when they go down for maintenance.”

The Governor’s ABX2-1 will give the California Energy Commission more authority to impose new mandates for oil storage requirements on oil refineries in California, even as California is on the verge of an energy crisis with the push for electrification by 2035, as John Kabatek, California State Director, National Federation of Independent Business warned last week. “The regulation requirements in ABX2-1 will artificially create a fuel shortage crisis due to limiting the distribution of fuel.”

Where yesterday’s hearing is disconcerting is that the committee chairman Sen. Steven Bradford expressed concerns and skepticism ABX2-1 will result in any good even saying it could do more harm. KCRA reported:

Committee chair, Senator Steven Bradford, noted that a special advisory committee established through the last special session on gas prices has yet to materialize because Newsom’s administration has yet to appoint anyone.

Bradford also noted that the CEC is three months behind on a refiner management report.

“How can we justify more requirements on agencies when they can’t respond in a timely manner?” Bradford posed.

Thank you Senator Bradford for stating the obvious.

However, he still voted to pass the grievously flawed bill out of the committee, which passed mostly along party lines.

“California ranks third in the nation in oil refining capacity. The state’s 17 refineries – located in the Central Valley, Los Angeles County and the San Francisco Bay Area – have a combined capacity of nearly two million barrels per calendar day,” the Western States Petroleum Association says.

After the Assembly passed Newsom’s ABX2-1, WSPA reported:

“As California’s special session unfolds, the notion of mandating refineries to store fuel supplies may seem like a simple fix to price spikes, but the reality is far more complex. The math behind this proposal is incomplete and fails to address key operational questions. For example, how many days of supply will refiners be forced to withhold from the market? What will the storage costs be? And crucially, what happens if a price spike never materializes—are Californians then stuck paying more year-round for no reason?

“This theory of cost savings is just that—a theory. Without a deep understanding of the complexities of refinery operations, policymakers are gambling with consumers’ wallets. We, as an industry, are ready to roll up our sleeves and address the root causes of California’s volatile energy market, which has been shaped by decades of policies. We call on legislators to do the same. Californians deserve solutions grounded in reality, not rushed ideas pushed through during a special session. This bill lacks the time, detail, and diligence required to truly address the problem.

Indeed, Californians deserve solutions grounded in reality, not rushed ideas pushed through during a special session.

The other thing that happened Monday is “Senate Democrat leadership blocked Senator Rosilicie Ochoa Bogh’s (R-Yucaipa) bill to immediately halt the state’s gas tax and provide significant economic relief to California consumers at the pump,” Sen. Ochoa Bogh reported Monday.

“Senator Ochoa Bogh’s measure would have suspended the gas tax for one year and ensured cost savings were passed directly to the consumer. If passed, the bill would have taken effect immediately.”

She reported that the same bill has been introduced in this Extraordinary Session in the Assembly, but was not given a hearing.

“It’s shameful that Senate Democrats are engaging in political theatrics while California families continue to bear the brunt of the highest gas prices in the nation,” added Senator Ochoa Bogh. “They’re putting on a show while families are struggling to make ends meet. My bill would have lowered gas prices by 60 cents per gallon – real savings for real people.”

What California voters and taxpayers are witnessing is the failed state of California breaking down under a treacherous Democrat supermajority.

“Newsom’s scheme won’t do a damn thing to lower gas prices, and he knows it,” said Assembly Republican Leader James Gallagher (Yuba City) said last week. “As long as Democrat politicians refuse to stand up to the governor, costs at the pump are only going to increase.”