The State Assembly passed two bills last week to address concerns about spiking oil and gas prices and overall fuel supply in California. Senate President pro Tempore Michael McGuire (D -North Coast) has now agreed to convene the Senate beginning Oct. 7.

Gov. Gavin Newsom had issued a proclamation Aug. 31 calling for the Special Session on Petroleum and Gasoline Supply. The Assembly held two days of informational hearings in the middle of September. At the end of the month, a day was spent debating nine separate bills focusing on this issue. Democrats had their bills and Republicans offered their bills. On Oct 1, two bills were passed the Assembly.

Although Newsom called for the Special Session on Aug. 31, McGuire did not immediately call the Senate back to session. He maintained that action could have been taken during the regular session, which ended Aug. 31.

Now that the Assembly has acted McGuire announced on Oct. 1 that “The Senate intends to work quickly and efficiently so that we can get Californians the relief they deserve at the pump, we appreciate the Assembly’s work on this issue, and we’ll be kicking off our legislative process on October 7. . . We’ll be ready to roll next week.”

After Senate hearings this week, a floor vote is tentatively scheduled for Friday, Oct. 11.

The Assembly passed Assembly Bill X2-1 on a 44-18 vote. This bill allows the state to require oil refiners to manage a minimum inventory of fuel to avoid supply shortages that create higher gasoline prices for consumers. It would also authorize the California Energy Commission to require refinery operators to plan for resupply during their maintenance outages.

The argument was that when refineries have unplanned maintenance or need to take a plant offline for a while, this reduces total State fuel supply. Consequently, spot market prices jump, which ultimately raises prices at the pump.

“I’m grateful to the Assembly for joining with me in our efforts to prevent gas price spikes and save Californians money at the pump,” Newsom said in the press release announcing the Assembly’s action.

AB-x2-1 also “. . . protects frontline communities by prohibiting the construction of additional storage, mandating that workforce safety is the primary consideration when establishing regulations, and reinstates the stakeholder advisory committee ensuring that industry, labor and environmental justice have a seat at the table,” according to Assembly Speaker Robert Rivas (D-Salinas).

In a separate press release before the Assembly’s vote, the Governor’s Office shared the comments of several Stanford University economists on the Governor’s proposal.

“The California gasoline market does not function properly… In-state suppliers are highly concentrated, with five companies controlling a whopping 98 percent of the capacity to produce California-grade gas. With so much market power, the incentives to build up robust reserves are limited,” they noted in a Sacramento Bee story.

They also challenged the oil industry’s talking points that the proposal would require new infrastructure and drive prices in the West higher. “During a supply crunch, anything, the release of these inventories would put downward pressure on prices in California. If this additional supply would free up refinery capacity to serve Nevada and Arizona, also reducing prices in these markets.”

The 44-18 vote, with 17 members not voting, was not strictly along party lines. Several Democrats opposed it or abstained, including local Assemblywoman Sabrina Cerevantes (District 58) of Corona. They also had concerns about the effect of this legislation on prices and supply. There will be no immediate price adjustment.

“The facts are clear- when gas prices spike, it costs everyday Californians billions at the pump, while the oil industry profits. ABX2-1 will hold oil refineries accountable and promote stability in the fuel market. Price-gouging at the pump should not be the norm,” said Assemblymember Gregg Hart (D-Santa Barbara), who authored the bill.

In their press release, Assembly Republicans called the bill a “reckless proposal” and warned “[it] could increase prices and cause gas shortages.”

“Newsom’s scheme won’t do a damn thing to lower gas prices, and he knows it,” said Assembly Republican Leader James Gallagher (Yuba City). “As long as Democratic politicians refuse to stand up to the governor, costs at the pump are only going to increase.”

The State’s efforts to reduce air pollution by gradually eliminating the sale of gas-powered vehicles does have an impact on gasoline prices. The State leads the nation in the number of zero-emission vehicles on the roads.

Between 2000 to 2022, emissions fell by 20% while California’s gross domestic product increased by 78%, pointing to the effectiveness of the state’s climate change and air quality programs, according to a September press release from the California Air Resources Board.

The second bill AB x2-9, which passed 68-0 with 11 abstentions, mandates the CEC, in consultation with the CARB, to complete a review of increased ethanol fuel blend by summer 2025, This could provide for gasoline with 15% ethanol, which would be more affordable. It would also allow modifying the timing of when to blend summer gasoline.

On Oct. 7, the average cost of a gallon of gasoline in California was $4.68 compared to a $3.17 nationwide average. A year ago, the average cost of a gallon in of regular gas in the State was $5.83. Last week, in Riverside County, the average cost of a gallon was $4.43.