California Gov. Gavin Newsom (D) on Monday signed into law a controversial plan that would tighten storage rules for fuel refineries to prevent future fuel shortages and higher pump prices.
of AB×2-1 The bill, approved by the California Assembly on Monday morning and the state Senate in a special session on Friday, would allow state regulators to oversee how much fuel refiners hold in their inventories. By maintaining these stocks, avoid deficit According to the governor's office, this will ultimately lead to higher gasoline prices.
“What I'm so proud of is that we stood up and we didn't back down. Everyone here had the courage to stand up for what they believed in and they stood tall,” Newsom said. He spoke at a press conference after signing the bill. “Big oil won't be on our side – of course. Full stop.”
Although ABx2-1 ultimately received support from the Legislature and became state law, its push was not unanimous and received support from oil companies, labor unions, Republican lawmakers, and even some state Democrats. There was no backlash.
Here's what you need to know about the law:
What does this bill do?
Once the bill goes into effect within 90 days, the California Energy Commission, the state regulator, would have the authority to set limits on storage levels for each refiner, each fuel, and each blend component under the bill. The agency could also adjust inventory minimums and establish conditions under which refiners can draw down or rebuild inventories.
The bill would also allow regulators to ensure refiners have resupply plans in place in advance of maintenance outages and set standards that must be met before such an event occurs.
“This bill protects Californians from rising gas prices by requiring refineries to plan for shutdowns and supply chain disruptions,” said ABx 2-1 co-author and Assembly Majority Leader Cecilia. Aguiar Curry (D) said before the final consent vote in Congress on Monday. floor.
Why is it controversial?
Final agreement on the bill on the Assembly floor, which was required after the state Senate originally amended the text, ended with a vote of 41 in favor and 16 against.
The Senate tally on Friday was 23-9, compared with a 44-18 vote on an earlier version in the House earlier this month. Some Democrats sided with Republicans in opposition, but many chose to abstain from voting altogether.
Debate is growing over both the provisions of the bill itself and the need to hastily convene a special session near the end of the regular session to pass the bill.
According to the California Constitution, the governor: special session — despite doing so no guarantee According to the statement, both houses of Congress will convene. Karmatters.
Measures approved and signed during such sessionstake effectAfter 90 days. As a point of comparison, if lawmakers had delayed the bill until the next regular session, it would have taken effect on January 1, 2026 at the earliest.
newsome invited to this session His office said: “Higher prices for consumers are a spike in profits for oil companies, driven in large part by refineries not backfilling supply when they are shut down for maintenance.” He explained.
The day before Mr. Newsom made his formal declaration, Assembly Speaker Robert Rivas (D) indicated that the chamber was willing to consider the bill outside of the regular session.
“Congress stands ready to stop rising gas prices and provide Californians with significant relief that will lower their monthly energy bills,” Rivas said. stated in a statement at that time.
“We share Governor Newsom’s understanding of the absolute urgency to get this done,” he continued. “If the governor calls a special session, we will do our job and get results.”
But Rivas stressed that he does not want to “force a vote on a bill that has not been thoroughly vetted in public hearings,” adding: “Doing so could have unintended consequences in the pockets of Californians.” Ta.
Unlike the Legislature, the state Senate did not jump on board. Shortly after Newsom called for Congress to convene, state Senate President Pro Tempore Mike McGuire (D) declared that the chamber: No special sessions will be held.. He said the Senate had “spent the better part of a year” working on a companion bill and was prepared to muster enough votes to “cross it over the finish line during the legislative year.”
“While we do not plan to call a special legislative session this fall, I look forward to continuing our dialogue with the Governor and the Speaker of the House on this important issue in the coming days and weeks,” McGuire said at the time.
But in the end, McGuire agreed to convene The special session after the Legislature passed the initial text on Oct. 1 made clear that the state Senate plans to “work quickly and efficiently” to provide relief to Californians.
The bill faced opposition from both oil companies and labor unions.
After ABx2-1 received legislative approval but before it was introduced to the Senate floor, Chevron sent a letter to lawmakers describing the bill as “inaccurate and flawed.” first reported According to local television station KRCA.
“Economic fundamentals drive prices higher when demand exceeds supply,” the letter said, warning that imposing further constraints on inventories would only lead to higher prices.
another letterA statement sent by multiple labor unions said last week that the California Energy Commission, an organization funded by unelected ratepayers, “bureaucratically controlled the safety of the state's refineries. It disputed the fact that it would gain “unprecedented regulatory powers to direct.”
The authors warned that “the loss of a workforce with first-hand knowledge and insight into refinery operations and maintenance” could jeopardize the safety of members.
“With fuel prices currently falling in California, there is no policy reason why this issue was not raised in January,” they concluded, noting the opening date of the next regular legislative session.
State Senator Brian Dahl (Republican)caused concernLast week, he said the plan would “create artificial shortages by restricting supply” and that the bill was a “scheme to collect money at the pump from oil refineries and consumers.”
Rep. Esmeralda Soria (Democratic) voted against ABx2-1 received its first hearing in Congress because of its reluctance to “take risks regarding new regulations that could result in higher gas prices.”
Soria said the bill's measures are “unproven,” noting that she is the daughter of farmworkers and knows firsthand the daily hardships faced by Californians. [and] “It's dangerous,” he added, “and it could ultimately harm the communities that can least afford it.”
How did members of Congress respond to criticism of the bill?
The revised version of ABx2-1, which passed the state Senate on Friday and was approved by the Assembly on Monday, included several changes to be more inclusive of workers.
The final document specifies that the governor will be appointed to represent “labor organizations with experience in operating refineries” to the Independent Consumer Fuels Advisory Board, a watchdog arm of the California Energy Commission.
The revised text also maintains employees' authority to perform emergency shutdowns and necessary maintenance work for safety reasons, prioritizing the “health and safety of employees, the community, and the public.”
“The amendments adopted by the Senate provide additional protections for workers and the public,” Aguiar-Curry said ahead of the House vote. “This bill clearly states that we will not proceed with any regulation unless there is a direct benefit to California gas consumers.”
Rep. Greg Hart (D), a co-author of the bill, said it would clarify current law in a way that “protects the health and safety of refinery workers, including stoppage authority for emergency and necessary maintenance outages.” Touted a bill to make it.
“The amendments make clear that regulations issued under this bill do not change the requirements for a skilled and trained workforce in refineries,” Hart added.
