After months of little visible progress,

government Gavin Newsom’s proposal to hold the oil industry responsible for high gas prices and discourage price gouging

after months with few outward signs of progress,

is now on its way to passage in the California legislature.

A deal between the governor and

L

legislative leaders, announced earlier this week,

was passed by the Senate on Thursday and will now go to the General Assembly for a vote next week

.

the dee

I’m leaving Gov. Gavin Newsom is urging the legislature to place a cap on oil company profits and instead empower state energy regulators to impose one through public process.

Admittedly, it’s a weaker plan that shows state lawmakers are unwilling to directly address California’s multibillion-dollar oil industry, which wields enormous political clout in a state that consumes nearly twice as much gasoline as any other. state anyway.

stands

and pays the highest gas prices in the country. But

there is a strong argument that it might be a more effective, actually better way

T

o have regulators than state legislators adopt

the collection work

and analyze

data and imposing sanctions

for excessive profits

on such a powerful industry.

from the hands of state legislators.

The Western States Petroleum Assn. is the largest lobbying spender in Sacramento, and oil companies have handed out millions in campaign money to vote Republicans and Democrats friendly to their industry.

Big oil is

This

the most powerful industry in the world

,

and has been mobilized against the price gouging fine

they are mobilized against it

since

day one day one

said Kassie Siegel, who directs the Climate Law Institute at the Center for Biological Diversity.

This

new

approach takes decisions about fines for excessive profits out of the purely political realm

other

in the administrative world of data-driven regulation and brings much needed

increased

supervision.

It’s a promising idea, and the new version of it

the bill

written by Senator Nancy Skinner (D-Berkeley) was released Monday, passed hearings within days, and cleared the Senate on Thursday. Legislators the General Assembly s

must immediately vote to send it to the governor’s desk.

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Once empowered, state regulators need to get moving

diligent though

quick to hold this industry accountable.

Newsom has pushed for oil refinery profits to be penalized since last year, when gas prices rose to more than $6.40 a gallon.

more than about

$2.60 per gallon above the national average. While Californians struggled

afford to

filling their tanks in a time of rapid, economy-wide inflation, oil companies

harvested rotated

their biggest win ever. Chevron, which operates oil refineries in El Segundo and Richmond, recorded record profits of $36.5 billion in 2022

,

and Valero, with refineries in Benicia and Wilmington, had its best year ever with earnings of $11.5 billion

.

It should be clear by now that oil companies have been overcharging Californians for years, with consumers paying a mystery gas surcharge of 30 to 40 cents per gallon since 2015, amounting to an additional $40 billion or more that cannot be accounted for by the states higher taxes and stricter environmental regulations.

Stricter oversight is desperately needed, especially as oil demand begins to shrink as California’s emissions policy tightens

force a transition to replace gas-powered cars

electric vehicles a shift that is expected to reduce petroleum consumption in the state by more than 90% over the next two decades.

the

governors

Proposal would create an independent Petroleum Market Oversight Division within the California Energy Commission, with subpoena powers to investigate industry sales and pricing and identify consumer abuses. But just as important are the bill’s transparency provisions, which should help shed light on gas prices by forcing companies to provide state regulators with detailed new information about transactions, servicing activities and refining profit margins.

Because it authorizes, but does not require, the California Energy Commission to impose a price gouging fine, regulators may collect and analyze the new data oil companies submit only to determine that no action is warranted.

But that seems unlikely. California is dominated by just five major oil refineries, and the forces driving up gasoline prices remain shrouded in mystery. The bill’s transparency measures alone could go a long way in curbing an industry that has long operated in the shadows and with far less oversight than other energy providers, such as electric and natural gas companies. State regulators

remain largely in the dark, and

need more information to determine if the market is being manipulated.

It’s d

Disclosure in itself could act as a deterrent and deter the industry from disowning consumers

to begin with, and make sure oil companies don’t use their money and power to take advantage of consumers

other

Unpleasant

to punish

scary

California

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because of its aggressive climate policy.

Significantly, the oil industry is hesitant about the demands that would make

it them

provide more information to state officials. Transparency shouldn’t be a problem if

these companies

have nothing to hide.