Governor Gavin Newsom signed legislation that could force the oil industry to cap profits and reveal gas price data.
It has only been a few weeks ago that California’s Gov. Newsom called the oil industry the second most powerful force on earth, trailing only Mother Nature in its ability to bend the elements — both physical and political — to its will, according to The Associated Press.
Yet the legislation Newsom approved Tuesday extends a winning streak for the governor against oil companies, one of the most formidable lobbying powers in California’s state capital.
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.
On signing the legislation, 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.”
The legislation 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.
The oil industry doesn’t mind a David vs. Goliath comparison “as long as you think we’re David and not Goliath,” Kevin Slagle, spokesperson for the Western States Petroleum Association, said about the industry’s influence at the state Capitol. “Just look at the results the last couple of years on legislation.”
“I think what we’ve seen is the governor has put this industry in the crosshairs for a number of years now,” Slagel said. “With a supermajority and the ability of governors to pull levers with legislators, it’s a tough policy environment for us for sure,” he added reports, Politico.
While big oil appears to have lost much of its clout in California, the industry is still asserting itself. The Western States Petroleum Association spent $11.7 million lobbying lawmakers in the 2021-2022 legislative session, far more than any other single group.
Chevron followed behind it, spending $8.6 million, according to state campaign finance filings. The next closest single spender was the California Teachers Association, at $7.1 million.
The industry also spent millions on campaign contributions in the 2022 election, supporting both Democrats and Republicans. More than a quarter of all 120 seats in the Legislature are newly elected members.
Newsom acknowledged Monday the importance of oil for the global economy, telling reporters: “I’m driving home tonight” and “I’m flying this weekend.”
“Oil has built the American economy, built the industrial economy, I get it,” Newsom said. “But we are transitioning. And all I’m asking for is don’t rip us off anymore.”
