New Legislation Aims to Boost Oil Production and Stabilize Market After Years of Restrictive Policies
Governor Gavin Newsom has signed a package of energy bills designed to stabilize California’s volatile gasoline market and lower energy costs for consumers.
The move marks a significant shift in strategy for the administration, which has previously pursued strict environmental regulations that many analysts say have contributed to rising gas prices and refinery closures across the state. The new legislation aims to facilitate oil development in Kern County and encourage refiners to continue their operations.
The bills come as two major refineries, Valero and Phillips 66, are scheduled to shut down, threatening to further strain the state’s fuel supply.
One analysis projects that these closures could push gas prices to as high as $8 a gallon. California residents already face the highest gas prices and gas tax in the nation. Newsom’s office claims the new measures will help “avert severe price spikes at the pump,” and will save millions of Californians “billions on their energy costs.”
This policy reversal follows years of the governor’s office and state regulators imposing strict rules on the oil and gas industry. These regulations, including the state’s cap-and-trade program, have been cited as a primary reason for refineries leaving the state. The new legislation, however, extends the cap-and-trade program, a move that some analysts warn could still lead to increased gas prices.
Despite the new focus on stabilizing the oil market, the administration maintains its commitment to the state’s long-term environmental goals. The bills affirm a goal of net-zero emissions by 2045 and make “polluters pay for projects that support our most impacted communities.” The legislation also provides a stable source of funding for California’s beleaguered high-speed rail project, which has faced significant budget overruns and delays.
The governor has previously been a vocal critic of the oil and gas industry, filing lawsuits against companies and accusing them of “manipulating” prices and “lying.” Just last year, his administration filed a lawsuit against the Trump administration to protect California’s de facto electric vehicle mandate and sued major oil companies for alleged climate change damages.
For some, the new policy represents a dose of reality. “After years of pushing radical climate policies that punished working families, Governor Newsom is finally waking up to what Californians need,” said Jason Isaac, CEO of the American Energy Institute. He called the shift an act of “survival,” rather than leadership. The new laws represent a complex balancing act as California tries to reconcile its ambitious climate goals with the immediate economic pressures faced by its citizens.
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