Newsom Moves To Limit Oil Company Profits In Energy-Strapped California
California Governor Gavin Newsom attends California Governor Gavin Newsom's press conference for the official reopening of the state of California at Universal Studios Hollywood on June 15, 2021 in Universal City, California.
Alberto E. Rodriguez via Getty Images

Democratic California Governor Gavin Newsom unveiled a “price gouging penalty” for oil companies this week as Golden State lawmakers assembled to deliberate energy policy.

The proposal, introduced by State Sen. Nancy Skinner (D-CA), would compel oil companies to reduce their profits to avoid a civil penalty from the California Energy Commission. Neither a penalty size nor an official profitability threshold appears in the proposal, which would also expand the agency’s authority to obtain information regarding price policies.

“Big Oil has been lying and gouging Californians to line their own pockets long enough,” Newsom said in a press release. “I look forward to the work ahead with our partners in the Legislature to get this done.”

Newsom convened a special session of state lawmakers on Monday to consider the price gouging policy, which as many as 60% of Californians support, according to a recent poll from Consumer Watchdog. Legislators only held the session for minutes before adopting rules and appointing new leadership, according to a report from the Associated Press.

“Putting the Governor’s proposal in print allows the Legislature and the public to begin discussions on this important issue,” Skinner remarked in the press release. “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.”

Indeed, average gas prices in California are presently $4.66 per gallon, according to data from AAA, far surpassing national average gas prices at $3.36 per gallon. The press release nevertheless lauded Newsom for purportedly reducing prices at the pump from a high of $6.42 per gallon earlier this year. President Joe Biden has made similar claims amid the nationwide decrease in gas prices, which are currently 41% higher than costs recorded on his first day in the White House.

The price gouging policy occurs after the California Air Resources Board issued new rules requiring 35% of new vehicles in the state to produce zero emissions by 2026, a standard that will rise to a 68% level by 2030 and a 100% level by 2035. Experts have warned that the state’s electric grid, which often makes national headlines for experiencing widespread blackouts, will require upgrades to manage a rapid transition away from internal combustion vehicles.

Renewable energy sources such as biomass, solar, and wind were responsible for one-third of the state’s power generation as of two years ago, according to data from the California Energy Commission.

Congressional Democrats have also attributed rising energy costs to price gouging. House Speaker Nancy Pelosi (D-CA) expressed support earlier this year for legislation that would permit the president to declare an “energy emergency,” granting him the ability to regulate prices by preventing fuel companies from selling their products at rates deemed to be “unconscionably excessive” and “exploiting” such an emergency.

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The Daily Wire   >  Read   >  Newsom Moves To Limit Oil Company Profits In Energy-Strapped California