California’s New Oil Company Rules Will Increase Gas Prices, Businesses Tell Regulators

California’s New Oil Company Rules Will Increase Gas Prices, Businesses Tell Regulators

Storage tanks at Marathon Petroleum's refinery in Carson, Calif., on March 11, 2022. (Bing Guan/Reuters)

Jill McLaughlin

Jill McLaughlin

3/21/2024

Updated: 3/21/2024

Oil and gas industry representatives and small business owners urged the California Energy Commission March 18 to delay new emergency reporting requirements on oil and gas companies, saying the rules could raise gas prices.
The energy commission held a workshop Monday to discuss new data reporting requirements under Gov. Gavin Newsom’s oil company price-gouging law signed in March 2023.
The law created new regulations and extensive state oversight for oil companies and refineries selling fuel in California. Mr. Newsom claims it will “take on big oil” by capping profits and reducing price spikes.
During the workshop, the energy commission outlined proposed rules that will take effect May 20. The timeframe has been expedited using emergency rulemaking, leaving less time for public comment.
The rules would require oil companies to report more details on their profits, provide advance notice of refinery maintenance schedules, and submit more data about crude imports.
The governor’s new law created a watchdog group inside the energy commission—the Division of Petroleum Market Oversight—which oversees activities within the oil industry after gas prices spiked in 2022, reaching $6.44 per gallon just before midterm elections.
The oversight division, which began operating in June 2023, has the power to refer any cases of alleged “price gouging” to the California Attorney General’s Office, but has not yet filed civil or criminal actions against any company for violating regulations, an energy commission spokeswoman told The Epoch Times on March 9.
Industry leaders, small businesses, and health care organizations disagreed with the regulations Monday, with some saying the rules would add more paperwork and reporting to an industry that is already overburdened with data requirements in California.
Upon passage of the price-gouging law in March 2023, Gov. Gavin Newsom said: "California took on Big Oil and won." (Office of Gov. Newsom)

Upon passage of the price-gouging law in March 2023, Gov. Gavin Newsom said: "California took on Big Oil and won." (Office of Gov. Newsom)

The new rules could also increase the price of gas at the pump, many feared.
Nick Payzant, founder and CEO of Cerna Healthcare in Orange County, asked the commission to reconsider new regulations.
“We provide care to hundreds of fixed-income seniors and jobs to women of color,” Mr. Payzant said. “Our challenge is gas prices.”
The regulations could raise prices, he said, making it harder for people on fixed incomes to afford care, and increasing costs for workers who drive to clients’ homes.
“You will affect seniors’ health and low-income workers and their gas prices,” he added.
Tim Taylor, the California legislative director for the National Federation of Independent Business, was concerned about the commission’s move to pass the regulations through its emergency process, instead of allowing the public and businesses enough time to comment.
“We don’t believe an issue that is as far-reaching and serious as this should be jammed through as an emergency rule,” Mr. Taylor said.
A sign shows gasoline fuel prices at a Shell gas station in Los Angeles on Oct. 5, 2023. (Patrick T. Fallon/AFP via Getty Images)

A sign shows gasoline fuel prices at a Shell gas station in Los Angeles on Oct. 5, 2023. (Patrick T. Fallon/AFP via Getty Images)

Other organizations, unions, and citizens asked the commission to reconsider inserting state control over oil refining facilities, over fears of compromising worker and community safety.
Sophie Ellinghouse, the general counsel for Western States Petroleum Association, said the added regulations, especially the state’s plans to intervene in refinery operations and maintenance, could create safety problems.
“The [energy commission] is not the proper agency to step into this arena,” Ms. Ellinghouse said. “The unintended consequences are likely to make the situation worse. The [energy commission] will need to answer to the public and to those who suffer damage as a result.”
Timothy Jefferies, a journeyman and representative of the International Brotherhood of Boilermakers—a diverse union representing workers in industrial construction, repair, maintenance, manufacturing, and other fields—said politics should not factor into refinery operations.
“I came here today to strongly urge you not to allow refinery turnaround to be politicized,” Mr. Jefferies told the commission. “This could have dangerous results for community safety. This is not something politicians should have their hands in.”
Another union representative, Chuck Leonard of the Plumbers and Steamfitters Local 342 in Northern California’s Contra Costa County, said the idea of the commission running refinery operations “scared” workers.
“Safety for the workers should be the No. 1 priority,” Mr. Leonard said. “The unintended consequence to having the state instructing and overseeing maintenance and turnaround in these facilities, quite frankly, scares the heck out of us. It sends a clear message that safety may not be the No. 1 priority.”
The public can submit comments to the California Energy Commission through April 1.
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Jill McLaughlin

Jill McLaughlin

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Jill McLaughlin is an award-winning journalist covering politics, environment, and statewide issues. She has been a reporter and editor for newspapers in Oregon, Nevada, and New Mexico. Jill was born in Yosemite National Park and enjoys the majestic outdoors, traveling, golfing, and hiking.

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