Gov. Newsom Bulldozing Californians with Draconian Climate Change and Electrification

In March, 2023 the California Assembly jammed SBX1-2, Gov. Gavin Newsom’s Gas Tax, through an expedited hearing, pretending that was enough exposure to the public, and debated the bill and voted on it.

Gov. Gavin Newsom’s Gas Tax created 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 created 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 Globe has addressed Gov. Newsom’s claim that oil companies “are ripping you off. Their record profits are coming at your expense.” Newsom leaves out the part where in 2021 he largely killed hydraulic fracturing for natural gas in California as part of his overall plan to end oil extraction. He also announced his action to halt issuance of fracking permits by 2024.

The governor described his scheme as “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.”

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 was plenty of time to openly debate how to address the governor’s concerns, as well as hear from the oil and gas industry.

What exactly are “excess profits” or “windfall profits?” There really isn’t such a thing – except in Socialism/Marxism/Communism.

Like something out of Venezuela, where the oil and gas industry were nationalized, SBX1-2 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.

“We’re making major progress with the Legislature to hold Big Oil accountable for fleecing Californians at the pump,” Gov. Newsom said. Only, it is the governor fleecing Californians at the pump, going back to 2017 when then-Gov. Jerry Brown, supported by then-Lt. Gov. Gavin Newsom, signed Senate Bill 1, which substantially increased vehicle registration fees as well as taxes on diesel and gas. SB1 also increased taxes on gas and diesel annually based on inflation every July 1st – it has been increasing annually since that date.

Again – is that “Big Oil” or California Democrat politicians fleecing Californians at the pump?

However, a bill to prioritize California oil production over foreign imported oil was passed unanimously by the Senate Environmental Quality Committee in March 2023, less than a day after Governor Gavin Newsom signed the SBX1-2 oil company oversight bill into law.

Senate Bill 15 by Senator Shannon Grove (R-Bakersfield) encouraged the production of environmentally responsible oil in California. Sen. Grove clarified her intent:

“Much of the oil we import could be replaced by California’s in-state producers, providing California jobs, if we were allowed to expand production. By relying on expensive foreign oil imports, we have placed California’s energy security into the hands of countries that are actively hostile to California’s values when it comes to human rights, labor rights, and environmental rights. I am hopeful SB 15 will begin a process to bring back thousands of jobs to California that have been lost to foreign countries that do not share our democratic values or respect for the environment. Instead, we can produce oil right here in California by Californians for California consumption.”

Grove’s bill was heard in fits and jerks by several legislative committees, until it made it to the Assembly Appropriations Committee, where good bills go to die, and it was placed on suspense… indefinitely… for a second time. She had an almost identical bill the year before which met with the same fate.

Which makes one wonder why exactly wouldn’t the governor and Legislature want to encourage the production of environmentally responsible oil in California, and reap the economic benefits, as well as having plenty of oil and gas without having to import it from foreign nations with demonstrated human rights abuses or nations with lower environmental standards than those in California.

Grove’s SB 15 would also have required the Air Resources Board to report on the amount of particulate matter released into the air from tanker ships that import oil into the state.

Her bill was clearly in the best interest of the people of California.

Gov. Newsom knows full well that he and his administration and progressives in the Capitol are the main culprits in the spike in fuel costs. He doesn’t want these continued soaring prices to derail his electrification agenda – or Oval Office ambitions – so he deflects accountability by the creation of this government behemoth that will set gas prices and processes in our state. But his fingerprints are all over it.

The creation and initial action of this new state government commission is appalling. The government-run price setting from Newsom and his administration – when will it stop? Notably, the government-set fuel prices could be just the beginning of an earth-scorching approach affecting other California commodities and services.

Voters and taxpayers need to ask and understand how and why a government agency, and not the market, is setting oil and gas prices. There are currently food shortages in Venezuela because the government is setting prices on everything from bananas to medical supplies. Is this where California is headed?

In October 2022, Sen. Shannon Grove (R-Bakersfield) boiled down the actual problem of California’s highest-in-the-nation gas prices and gas taxes to this in a letter to the governor:

“With isolated markets, an inability to access additional fuel that meets California’s stringent standards, the most hostile regulatory requirements, the most aggressive environmental policies, the extraordinary expense of cap and trade, the highest tax per gallon of gasoline, impossible standards that are not found in any other state in the nation, and limited supply, there is really no need for additional explanation of why California has the highest and most volatile, gas prices in the nation. Simply put, your [Governor] policies have created this problem and have caused the pain at the pump that is hurting every single California family. In fact, federal judges have continued to throw out cases alleging price conspiracies by the fuel industry finding no basis for the allegations that you continue to levy.”

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. And these 40 million residents are driving more cars, living in more houses and apartments, working in more commercial buildings, shopping in more stores and malls, and traveling more across the state – all of which takes more traditional energy.

Here is Sen. Grove’s letter to the governor. This should be required reading in every Econ 101 class:

There will be a “Rulemaking Workshop” Monday, March 18, during which time they purport to hear from stakeholders – “The public can participate in the workshop consistent with the attendance instructions below:”

An industry source told the Globe they expect it will be more of the same deceptive shenanigans – telling Californians what the Administration will be doing to “hold Big Oil accountable,” while driving up costs even higher for Californians and heaping more burdens on what business and industry remains in California. This workshop is where the CEC is expected to determine and actually set limits on fuel profits and establish penalties for what they determine is increased prices, with another emergency regulation – and another “jam job” rule setting to follow.