Gov. Gavin Newsom signed a bill aimed at curbing “surging gas prices in California”. Karma Dickerson reports for the NBC4 News at 4 p.m. on Oct. 14, 2024.
California’s special legislative session came to an end Monday with a victory for Gov. Gavin Newsom and Democrats pushing for gas price regulation. The governor and Democratic lawmakers are celebrating, oil companies aren’t happy and drivers are hoping to see some positive results.
The new law requires oil refineries to keep a minimum amount of gas in storage. Supporters say when refineries go offline for maintenance there would then be enough backup gas on hand to prevent price spikes.
The California Assembly gave its final approval with a 41-16 vote. Several Democrats did not vote and four outright rejected the measure. A small group of Republican lawmakers and oil companies also dissented.
“This is the fourth largest market," Newsom said in a press conference. “This is a big damn deal.”
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Despite the success the governor touts, UC Berkeley professor and Faculty Director for the Energy Institute at the Haas School of Business Severin Borenstein doubts this new law will be the relief consumers crave.
“Well, unfortunately, I don't think this is going to make a lot of difference to our gasoline prices,”
Borenstein said. “It will potentially help during some of the big price spikes we've seen over the last couple of years. Those price spikes don't occur very often.”
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Many of the details of the new law are not yet clear. The bill calls for the specifics including the required size of the gas on reserve to be determined by the committee.
Leaders of the Western States Petroleum Association say the new law doesn't reflect the actual reason for high gas prices. President and CEO of the WSPA Cather Reheis- Boyd says to lower prices, investment is needed for infrastructure and local oil production. She predicts the new law will be unsuccessful.
“It is not about minimum inventory levels at refineries who are already running near capacity,” she said. “[The] chances of this causing the opposite effect is large, which is causing more increase in price, not less, because it isn't really bringing supply to market in a way that matters.”
To read more about the new legislation, click here.
