Following record gas price hikes and profits, Governor Newsom signed his special session bill to hold Big Oil accountable – the latest measure the Governor has taken to rein in the industry.
SACRAMENTO – Today, surrounded by legislators and community leaders in the rotunda of the California State Capitol, Governor Gavin Newsom signed legislation to implement the strongest state-level oversight and accountability measures on Big Oil in the nation – bringing transparency to California’s oil and gas industry, shining new light on the corporations that have for decades operated in the shadows while ripping families off and raking in record profits.
It is the latest instance in which the Governor has successfully taken on the historically powerful industry for putting profits over people. Last year, Governor Newsom signed legislation adding new reporting requirements to oil refiners, as well as a law protecting neighborhoods and schools from oil drilling.
What Governor Newsom said: “With this legislation, we’re ending the oil industry’s days of operating in the shadows. California took on Big Oil and won. We’re not only protecting families, we’re also loosening the vice grip Big Oil has had on our politics for the last 100 years.”
HOW IT WORKS: Authored by Senator Nancy Skinner (D-Berkeley), co-sponsored by Attorney General Rob Bonta and approved by a supermajority in both the Senate and Assembly, SBx1-2 creates a dedicated, day-in and day-out, independent watchdog to root out price gouging by oil companies and authorizes the California Energy Commission (CEC) to create a penalty to hold the industry accountable. The law will go into effect on June 26, the 91st day after the end of the special session.
WHY TRANSPARENCY MEASURES MATTER: When the law’s new transparency and oversight requirements go into effect at the end of June, the state will begin receiving more information than ever before, including last year when it appeared that oil producers suppressed supply to drive up prices and rake in record profits. Industry knows that the new independent watchdog division will be closely monitoring them and will refer any violation of law – including industry misconduct or market manipulation – to the Attorney General for prosecution.
WHAT THEY’RE SAYING:
- Attorney General Rob Bonta: “Record high retail gas prices — and record-breaking profits for Big Oil — hurt those who can least afford it most of all. For too long, Californians have been left in the dark when it comes to the practices of the gas industry. And while oil companies have been lining their pockets, many Californians are struggling to make ends meet. I proudly stand with the Governor as he signs into law our cosponsored bill to bring accountability and transparency to the gas industry. Together, we are fighting to even the scales for California consumers and take this burden off their shoulders.”
- Senate President pro Tempore Toni G. Atkins (D-San Diego): “This bill provides important tools to help Californians get the answers we deserve about oil company profits and price gouging. Through the leadership of Senators Skinner, Bradford, Limón, and McGuire, and our colleagues in the Assembly and the Administration, these new reforms are strong on transparency and accountability. That’s a big part of what it will take to stop any wrongdoing and protect California consumers.”
- Assembly Speaker Anthony Rendon (D-Lakewood): “Assemblymembers deserve praise for developing and passing this legislation, collaborating with the Governor and the Senate in the face of oil company intransigence. Our deliberations have been rigorous and transparent. Transparency is what we need now from the gas pricing system. That’s what this bill is about.”
- Senator Nancy Skinner (D-Berkeley), author of SBX1-2: “I am proud of my colleagues for passing this first-in-the-nation protection against price gouging by Big Oil. Californians faced outrageously high gas prices last year, prices that strained family budgets an extra $600 or more a month. In calling for immediate action, Governor Newsom responded decisively in proposing SBX 1-2, the strongest, most effective transparency and oversight measure in the nation. This landmark law will allow us to hold oil companies accountable if they pad their profits at the expense of hard-working families. With SBX 1-2, California has sent a clear message to the oil industry: Open your books and prove you’re not price gouging, otherwise Big Oil will pay the price — not consumers.”
- Assemblymember Jacqui Irwin (D-Thousand Oaks): “A supermajority of the Legislature, in partnership with the Governor, has just delivered for Californians struggling to afford gasoline. Not only will this new law provide real transparency and oversight with dedicated expertise to oversee the gasoline market, it will also create a plan to achieve our low carbon and clean air future. While the work is just beginning, experts will now have the tools they need to address outrageous prices at the pump.”
- Dwayne Crenshaw, President, Greater Sacramento Urban League: “For far too Iong, Californians have been wrongly taxed at the pump by Big Oil. This tax has especially impacted those in low-income, urban communities of color, where residents struggle to pay for basic needs and can’t afford price gouging at the pump. Governor Newsom’s bold proposal addresses economic, environmental health and racial justice, while holding Big Oil accountable.”
- Mary Leslie, President, Los Angeles Business Council: “The key to creating a clean energy economy that’s good for business and consumers is ensuring transparency and accountability in our fuel markets. Governor Newsom’s price gouging law protects California families and workers, while supporting our clean energy transition which is a big win for all of us. We thank the Governor and the Legislature for their quick action to bring much-needed transparency to the industry.”
- Max Vargas, VP of Economic Justice, Latino Community Foundation: “We applaud Governor Newsom’s leadership to tackle gasoline price gouging in California. Latino workers and small businesses are the backbone of local economies, but they’re still reeling from the pandemic’s disproportionate fallout, which oil company price hikes are further exacerbating. The creation of an independent watchdog for an industry this powerful is especially affirming for grassroots community leaders across the state who serve the working families directly affected by this price gouging.”
- Melanie Morelos, California Strategy Senior Program Manager, The Greenlining Institute: “We applaud Governor Newsom, and the California State Legislature’s swift action to tackle Big Oil’s ongoing corporate greed. Too many California families are forced to choose between filling up the tank in order to get to work, over essential expenses like rent and childcare while oil executives line their pockets with record-breaking profits. This landmark legislation sends a clear message that we will not allow corporations to take advantage of our communities and that the reign of unchecked Big Oil is coming to an end.”
- Teri Olle, California Campaign Director, Economic Security Project Action: “Finally, California called Big Oil’s bluff and won. The real reason this handful of massive corporations charge California twice as much for gas is that they can. We applaud Governor Newsom and the legislature for taking significant steps in addressing the unchecked corporate concentration which has been keeping our gas prices so high and in creating a more equitable and fair economy.”
- Jamie Court, President, Consumer Watchdog: “This landmark reform makes California the first state in the nation to authorize a windfall profits cap on oil refiners so that they can no longer gouge consumers at the pump. Combined with unprecedented transparency measures and a new watchdog bureau, this price gouging penalty will prevent Californians from enduring the price spikes and profits spikes that have plagued the gasoline market last year. Governor Newsom has balanced the scales on behalf of millions of Californians who no longer will have to choose between $6 per gallon gas and putting food on their tables.”
- Matt Petersen, CEO, LA Cleantech Incubator: “The small business owners and startup founders we support–and the workforce they employ–are the engine of our state’s growing cleantech innovation economy, yet they all suffer from price gouging at the pump that is enriching oil companies. We applaud Governor Newsom and the Legislature’s leadership for pushing back to keep money in our cleantech workers’ and small business’ pockets while growing our economy–the fourth largest in the world–while putting in place bold, equitable climate action.”
- Irvine Mayor Farrah Khan: “I’ve supported the Price Gouging Penalty bill (SBX1-2) from the beginning because I saw first-hand the effect high gas rates had on our residents. Thanks to Governor Newsom’s fast action, Californians will no longer be charged unfairly at the gas pump by big oil companies.”
- Meghan Sahli-Wells, California Director, Elected Officials to Protect America (EOPA), Former Culver City Mayor: “I am proud to join over 150 local elected officials throughout California who support transparency and accountability for an industry that has put their profits over our health, safety and wellbeing for far too long. We represent communities on the frontlines of fossil fuel pollution, unbreathable air and climate disaster, that, to add insult to injury, Big Oil has held hostage by unprecedented price hikes at the pump. We applaud the Governor for heralding, the and legislature for passing, this first in the nation bill to hold multi billion-dollar corporations accountable for price gouging, and laying the groundwork for a healthier, more just and economically vibrant California for all.”
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