By Wes Venteicher, POLITICO
The agency Gov. Gavin Newsom and lawmakers created a year ago to do something about gasoline price spikes is pitching two changes the oil industry doesn’t like: publicizing price data and requiring refiners to store more gas to help stabilize prices.
What happened: Tai Milder, director of the California Energy Commission’s Division of Petroleum Market Oversight, published a letter to Newsom on Wednesday outlining the proposals.
Why it matters: The actions the division takes under the oil oversight law Newsom signed last March could determine whether California succeeds in its attempt to minimize price disruptions as it phases out carbon-emitting fossil fuels.
Reaction: Western States Petroleum Association spokesperson Kevin Slagle said both actions proposed by Milder could have unintended consequences ranging from market manipulation by traders to logistical problems obtaining and storing extra supplies.
“The two main points we heard today don’t jibe with how things work in the real world and the refineries,” he said.
Background: Newsom called a special session of the Legislature at the end of 2022 in a show of urgency to find a solution after gasoline prices reached $6.42 per gallon, accusing Big Oil of “gouging” consumers. The industry has blamed California policies and supply limitations for the prices.
After pushing for a per-gallon cap on refineries’ profits, Newsom reached a compromise with the Legislature that created the new CEC division to analyze markets and recommend options, including a potential profit cap. Wednesday’s policy recommendations are the first from the division since it began collecting and analyzing massive amounts of price and market data over the summer.
CEC Vice Chair Siva Gunda said in a press call Wednesday he expects the division to offer a recommendation on any profit cap by the end of the year.
Jamie Court, president of consumer advocacy group Consumer Watchdog, said that’s not fast enough.
“It’s basically bureaucracy and the inability of a bureaucracy to move quickly to meet an urgent need that the governor was so concerned about he called a special session of the Legislature,” he said.
What’s next: Gunda said the CEC plans to consider Milder’s recommendation to make oil data public at its February business meeting. The agency will weigh the recommendation on storing supplies through a rulemaking.
