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Newsom's gas price plan clears Senate, but some Democrats dissent

Lawmakers during the California Senate committee hearing on fuel supply and price hikes at the Capitol Annex Swing Space building in Sacramento Oct. 7, 2024.
Fred Greaves for CalMatters
Lawmakers during the California Senate committee hearing on fuel supply and price hikes at the Capitol Annex Swing Space building in Sacramento Oct. 7, 2024.

Despite defections from several members of the Democratic majority, the state Senate today advanced Gov. Gavin Newsom’s proposal to address gasoline price spikes, placing it on the brink of becoming law.

The Senate passed Assembly Bill X2-1 — which would require oil refineries to maintain additional inventory that they can draw from during maintenance periods to sustain a steady supply for drivers — on a 23-9 vote. Final approval, sending the measure to Newsom for his signature, is expected Monday in the Assembly, which passed a previous version last week.

The vote was not guaranteed. Newsom first pushed the Legislature to consider his proposal before the end of the regular legislative session in August, but the Assembly balked and the governor ordered a special session. Senate President Pro Tem Mike McGuire, a Healdsburg Democrat, initially refused to call his members back to Sacramento, then softened under pressure from Newsom.

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The governor celebrated in a statement today that “Californians are one step closer to getting the protections they need against Big Oil’s price spikes.”

But between absences, abstentions and opposition, eight Senate Democrats — more than a quarter of the caucus — did not vote for his bill, hinting at a lingering uneasiness even among Newsom’s allies. The oil industry and Republicans have been sharply critical of the proposal, which they argue would actually drive up prices at the pump by artificially limiting supply as refiners build up reserves.

Catherine Reheis-Boyd, president and CEO of the Western States Petroleum Association, in a statement criticized the governor for “pushing an extremist agenda that isn’t about lowering gas prices — it’s about intentionally raising them so Californians drive less.”

One Democrat, Sen. Melissa Hurtado of Bakersfield, joined Republicans in voting against the measure, while another, Sen. Richard Roth of Riverside, abstained. Though some of the six absent members might have supported the bill, several are in competitive elections this fall and appeared to be trying to avoid taking a position that could be used against by opponents.

Shortly before the floor session, Sen. Dave Min, an Irvine Democrat who is running for a swing congressional seat, released a statement announcing that he would not participate in the vote.

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“We should be looking to investigate and address why California gas prices are higher than they should be, including the mystery surcharge that penalizes our drivers,” Min said. “However, opponents of ABX2-1 have raised serious concerns about whether the specific policy proposals in this bill will accomplish those goals and also whether this legislation may have counterproductive impacts.”

McGuire dismissed the notion that Democrats might be nervous about supporting the inventory mandate for refineries.

“Lowering gas prices is never bad policy,” McGuire told reporters. “That’s what this bill will do.”

Some prominent experts agree that the approach could dampen the gas price spikes that California regularly experiences during seasonal refinery maintenance. The state estimates that drivers could save as much as $2 billion annually.

But labor unions representing refinery workers, a key political ally for Democrats, have also lobbied heavily against it because they fear state regulations would prioritize economic considerations over their safety and could establish requirements that refineries are unable to meet, forcing them to shut down and eliminating jobs.

As the Senate met this morning, labor representatives sat alongside lobbyists for the oil industry in the back of the chamber, observing the proceedings.