Governor Gavin Newsom—who last month said it was “not the moment” for him to run for President—and Democratic allies in a special session of the state legislator introduced a proposal this week that would punish big oil companies for price gouging—as the industry did this summer during the crisis of spiking gas prices, Team Newsom announced in a press release Monday.
The proposal would let the state to decide the profit margin that would be allowed by oil companies operating in California. Those oil concerns which choose to trespass those margins would be fined, and the money would be collected in a Price Gouging Fund, and ultimately kicked back to California tax payers.
Something’s got to give, said Newsom.
“California’s price gouging penalty is simple—either Big Oil reins in the profits and prices, or they’ll pay a penalty. Big Oil has been lying and gouging Californians to line their own pockets long enough. I look forward to the work ahead with our partners in the Legislature to get this done.”
To further ease pain at the pump and move towards clean energy, Newsom ordered the change, starting in November, for gas stations to sell winter blend gasoline, which is cheaper to produce.
Newsom’s proposal, of course, must first pass the Legislature.
“Putting the Governor’s proposal in print allows the Legislature and the public to begin discussions on this important issue. No one can deny that California’s gas prices were outrageously high compared to other states. And those high prices hurt California consumers and businesses,” said Senator Nancy Skinner (D-CA).
Oil company profits are at record highs—some would say rapacious—highs. In the third quarter of 2022, many oil companies posted record profits. Just a few examples: Exxon reported their highest-ever $19.7 billion in profits; Phillips 66 profits soared to $5.4 billion, a 1243% increase over last year’s $402 million, and BP posted $8.2 billion in profits, its second-highest on record.
Newsom—who always seems to legislate with the national stage in mind—has been aggressive about building a clean energy program and also going after dirty energy, such as oil companies and diesel rigs. He called for a windfall tax on oil companies, with the money going back to taxpayers.
In Newsom’s biggest bids for clean energy, he fought to ban new gas-powered cars in the Golden State starting in 2035. He also hopes to forbid all new diesel vehicles by 2040, requiring that they, too, go to zero emission. Critics of that plan point out that diesel trucks carry most of the food and other provisions that allow Californians to live to the places where they might easily purchase those goods.
“There is no infrastructure to support this,” Chris Shimoda, vice president of the California Trucking Association, said when Newsom first floated the idea, arguing that even if the state built up the charging infrastructure for electric vehicles starting immediately, good luck providing enough power to run the 400,000 big rigs traversing the state by the deadline.
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