California: What They’re Saying: Governor Newsom’s Proposal to Hold Big Oil Accountable
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"Profits from California were 30% higher than anywhere else in the world"

"We in California are systematically being gouged"

"It's a data-driven approach that couldn't be wiser"

SACRAMENTO – As Governor Gavin Newsom's special session proposal on gas price gouging continues gaining momentum, passing out of the Senate earlier today, California leaders are making it clear it's time to hold Big Oil accountable. More about the Governor's proposal here.

Attorney General Rob Bonta, co-sponsor: "We're sick of seeing exorbitant profits by big oil companies like Chevron and Exxon while many Californians are struggling to make ends meet. I stand with the Governor in sponsoring this legislation to defend hardworking California families and to provide greater transparency and oversight in the marketplace. Price gouging of California consumers is unacceptable. It's time for big oil to play by the rules, or pay the price."

Senator Nancy Skinner, author (D-Berkeley): "In 2022, while oil companies were hauling in more than $200 billion in profits, Californians were being hit at the pump with record high gas prices — $2.61 per gallon higher than the national average. Those sky-high prices came at a time when the cost of crude oil was down and there were no changes to our state taxes, fees, or regulations. By passing SBX 1-2 today, my Senate colleagues and I made sure every Californian knows that we have your back. SBX 1-2 contains the strongest transparency and oversight measures in the nation so we can hold oil companies accountable if they manipulate prices and pad their profits at the expense of hard-working Californians. I want to thank Gov. Newsom for bringing forward this groundbreaking proposal, my legislative colleagues for their hard work on it, and the Senate for passing SBX 1-2 today."

Senator Dave Min (D-Irvine): "What's become clear as we've looked into this is that this is a fundamentally broken market, and that the primary beneficiaries of this broken market have been the oil refiners. They were making record profits, they were issuing massive dividends, engaging in huge share buybacks at a time when California consumers were paying record prices – $7, $8 in my district, per gallon – and that really is outrageous. And according to the Consumer Watchdog, profits from California were 30% higher than anywhere else in the world… I think it's a moral obligation of this body to try to fix this market, it really is fundamentally broken." (at the Senate Energy, Utilities and Communications Committee Hearing, Mar. 22)

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Senator Anna Caballero (D-Merced): "The biggest issue last year was the price of gasoline – and I can't overemphasize the challenges that people were making to determine whether they actually could get to work or not. And when you're faced with having to commute a long distance.. the high cost of gasoline was debilitating and they expect some kind of action on our part." (at the Senate Energy, Utilities and Communications Committee Hearing, Mar. 22)

Senator Mike McGuire (D-North Coast): "If we're being honest, California consumers have been fleeced, they've been fleeced, and those who have padded their pockets have been some of the biggest corporations in the world. And those, as Senator Durazo eloquently stated, those who are the most vulnerable in our communities have paid the price." (at the Senate Energy, Utilities and Communications Committee Hearing, Mar. 22)

Assemblymember Pilar Schiavo (D-San Fernando Valley): "People were having to make unbelievable choices around the prices of gas during this past year. And it was choices around whether or not they could afford medication, whether or not they could go to the doctor, whether or not they could pay rent, whether or not they could put food on the table for their families. And meanwhile, we see that executives are cashing out on $500 million in stock – and there's a 30% increase, compared to other states, in profits… It almost feels like the system is set up just to function in this fashion… and that we in California are systematically being gouged more than anyone in the rest of the nation." (at the Assembly Utilities and Energy Committee Informational Hearing, Mar. 22)

Senator Josh Becker (D-Menlo Park): "I do believe that this bill tackles both these problems: providing oversight and deterring market manipulation and also trying to put in place planning efforts to maintain stability during a managed decline in the market." (at the Senate Energy, Utilities and Communications Committee Hearing, Mar. 22)

Senator Susan Rubio (D-Baldwin Park): "Some of my residents were expressing how they have to decide how much food they buy because they couldn't afford to drive… A lot of our communities that are low-income, Spanish-speaking, like the communities that I represent, have to drive twice as long to get to their jobs… When I think of this issue, and I think of what we're trying to do here, [it] is trying to make sure that Californians have a reprieve from everything that's been on top of them recently." (at the Senate Energy, Utilities and Communications Committee Hearing, Mar. 22)

Senator Angelique Ashby (D-Sacramento): "We're establishing an information collection program where there hasn't been one before or where it's been inadequate before… We're leaning into transparency, taking transparency and moving it to the top of this dialogue. If there was a marquee for this show, it would say transparency on it. And that's what everyone is singularly focused on. It's a data-driven approach that couldn't be wiser." (at the Senate Energy, Utilities and Communications Committee Hearing, Mar. 22)

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Assemblymember Rebecca Bauer-Kahan (D-Orinda): "Maybe there isn't any [price manipulation], maybe there is. But we should know – and the information in this bill will give us those answers. And at the end of the day, if what we find if there's none, that seems like a good thing for your industry for us to say, 'Oh, look, this all makes a ton of sense.' And I don't know why anybody wouldn't want sunshine on that." (at the Assembly Utilities and Energy Committee Informational Hearing, Mar. 22)

Senator Bill Dodd (D-Napa): "I do represent oil companies in my district, I'm an unabashed supporter of capitalism, and at the end of the day, we're asked to decide on many issues… I think what we've got right now is an opportunity to protect consumers that we didn't have before." (at the Senate Energy, Utilities and Communications Committee Hearing, Mar. 22)

Senator Steven Bradford (D-Gardena): "We're all concerned with consumers and what they pay, and we should – as legislators, regardless of what party – we made that clear, that's at the forefront of everything that we're trying to do here." (at the Senate Energy, Utilities and Communications Committee Hearing, Mar. 22)

Lauren Sanchez, Governor Newsom's Senior Climate Advisor: "Why did we spike to $2.61 above the national average? [State taxes and environmental] fees, when you add them up, maybe explain a $1 difference, not $2.61. That is why what you have before you is a comprehensive proposal to look under the hood and ask those questions. Because we invited all 5 refiners to the Energy Commission hearing when we were trying to figure out what had happened and none of them showed… We hear the same issues around supply and demand, when in fact our refiners have met California demand every year and then they export the rest of the product. Yes, we have a unique operating market, we have required refiners to make cleaner fuels. Why did they charge Californians $8 a gallon?" (at the Senate Energy, Utilities and Communications Committee Hearing, Mar. 22)

And in case you missed this 'illuminating' exchange yesterday…

Assemblymember Phil Ting (D-San Francisco): "Could you illuminate why many of the refineries, many of the companies end up earning greater profit in California versus other parts of the country?"
…

Catherine Reheis-Boyd, Western States Petroleum Association: "It's a cyclic industry and it goes up, it goes down. And industries, like many, have got to make those decisions based on the long-term planning of being able to be profitable as an entity… this industry's rate of return is far below the majority of S&P 500's rate of returns and there's no conversation about that."
…

Ting: "Why is the profit higher in California?"

Reheis-Boyd: "The cost of doing business is higher in California."

Ting: "So because the cost of doing business is higher, then you want to make a higher profit?"

Reheis-Boyd: "It's supply and demand…"

Ting: "Why is the profit higher here?"

Reheis-Boyd: "Sorry, Assemblymember, you don't like my answer but it's the same one I just gave."

Ting: "No, I didn't get an answer, what I got was a lot of generality."

What is Big Oil hiding? California's about to find out.

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