News : Greased tracks for oil penalty bill

Thursday, March 23, 2023

Greased tracks for oil penalty bill

Mar 23, 2023

By Lara Korte, Jeremy B. White, Matthew Brown and Ramon Castanos

Presented by Elected Officials to Protect America - Code Blue

THE BUZZ: Another first-in-the-nation initiative is on its way to becoming law. Whether that’s a good thing, however, depends on where you sit.

After languishing in the Senate for several months, Gov. Gavin Newsom’s legislation on oil profits cap passed its first committee Wednesday. The administration earlier this week struck a deal with Democrats in the Legislature to allow the state’s Energy Commission to create a profit cap, and importantly, set the specifics around thresholds and penalties.

If you’re Newsom, you’re likely adjusting your cap for another feather. For months, the governor has been railing full-force against oil companies for last year’s eye-popping gasoline price spike that saw millions of commuters getting pummeled at the pump, and was followed by oil companies raking in record profits. His push to install a price-gouging penalty was met with a lukewarm response last fall. But after weeks of private persuasions with Legislators, he seems to have finally won the votes needed to land a law — albeit, with several big adjustments.

By far the biggest concern voiced by senators at an initial informational hearing last month was the risk for unintended consequences. Conservatives and industry experts argued such a penalty would actually raise gas prices — something no lawmaker wants to be blamed for. The new version erects some specific guardrails to make sure that doesn’t happen. The commission would create a penalty through a public rulemaking process, only if it determines doing so wouldn’t cause undue harm to consumers.

Furthermore, the bill requires the state auditor to investigate any penalty by 2033 — and if it’s not meeting the goal of reducing price spikes, the commission will have to terminate it.

If you’re the oil industry, you’re annoyed, to say the least. Western States Petroleum Association lobbyist Eloy Garcia painted a dire picture in the committee, saying that allowing an unelected body to control factors around refinery outages and planned maintenance is a huge concern. But his main complaint was the rapid acceleration of the bill. “Ten days for a first-of-its-kind legislation does not suggest that we're fully considering all the concerns," he said.

Some lawmakers, like Sen. Susan Rubio, agreed the quick turnaround was not ideal, saying “that that's not how I like doing business,” but added the current version is better than the first. Sen. Dave Min echoed that sentiment. “I don't think this is a perfect proposal,” he told bill author Sen. Nancy Skinner. “But I do appreciate the strides that you have made in getting to a place that I feel more comfortable with.”

The legislation now heads to the Appropriations committee before a vote on the Senate floor, which could happen as soon as today.

The next challenge will be in the Assembly, where moderate Democrats could pump the brakes on the bill. More on that next week.

BUENOS DÍAS, good Thursday morning. Los Angeles educators and school employees are embarking on the third and final day of a strike that has has canceled classes for more than half a million kids.

Got a tip or story idea for California Playbook? Hit us up at jwhite@politico.com and lkorte@politico.com or follow us on Twitter @JeremyBWhite and @Lara_Korte.

QUOTE OF THE DAY: "As a Republican, we don't make the rules here. This bill will get passed. It's being jammed through in a fast approach. I'm just a watchman on the wall. ... This is socialism." GOP Sen. Brian Dahle commenting on the oil profits penalty on Wednesday.

TWEET OF THE DAY:

A California license plate submerged by flood water in Pajaro, CA.

corinne_perkins

WHERE’S GAVIN? Nothing official announced.

A message from Elected Officials to Protect America - Code Blue:

Five oil refiners produce nearly all of California’s gasoline. In 2022, refiners used their market dominance to set high gasoline prices, making excessive profits while Californians struggled to make ends meet. Californians paid $2.61/gallon more than the national average while refiners tripled their yearly profits. Vote yes on SBX1-2 to hold Big Oil accountable by creating transparency and oversight of oil markets while authorizing the CEC to impose a price gouging penalty.

TOP TALKERS

— "Ridley-Thomas rests defense, calling two former L.A. County supervisor colleagues," by the Los Angeles Times' Matt Hamilton: "There’s no allegation in the case that Ridley-Thomas pressured his colleagues on the board to vote a certain way. But the testimony of Hahn and Kuehl — no more than 15 minutes in length — was among a parade of mostly current or former L.A. County staff and officials summoned to tell jurors about local government."

— “Deadly Bay Area storms kill at least 5 people, 2 in San Francisco,” by the San Francisco Chronicle’s Rachel Swan and Annie Vainshtein: “The deaths were a "grave reminder of how serious and dangerous this storm became. The repeated storms have been challenging, but our public workers have been out keeping residents safe, limiting damage as much as possible and quickly cleaning up the city,” San Francisco Mayor London Breed said in a statement.”

— "2 injured as SoCal tornadoes damage dozens of structures, snapping beams and ripping off roof," by the Los Angeles Times' Christian Martinez, Brennon Dixson, Hayley Smith and Deborah Netburn: "The unusual event also sent an HVAC unit hurtling out of the top of a building, and caused skylights to break and wood crossbeams to snap."

DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS– DOWNLOAD FOR ANDROID.

CALIFORNIA AND THE CAPITOL CORRIDOR

— "Labor unions objections delay California investigation into wage theft system," by the Los Angeles Times’ Paige St. John: “A surprise objection by labor unions helped delay a state investigation into California’s broken wage theft system, putting pressure on Gov. Gavin Newsom to fix a backlog of worker claims and other concerns that have only worsened with years of failed reform."

— “Newsom steps into saga over S.F. tower planned for a Nordstrom parking lot,” by the San Francisco Chronicle’s John King: “Newsom’s move applies to 469 Stevenson St., a stretch of flat asphalt tucked between Market, Fifth, Mission and Sixth streets. The city’s Planning Commission in June of 2021 approved a 27-story, 495-unit apartment tower on the site — only to have the Supervisors stall the project four months later by demanding new environmental studies.”

— “Who buys electric cars in California — and who doesn't?” by CalMatters’ Nadia Lopez and Erica Yee: “CalMatters’ statewide analysis of ZIP codes reveals a strikingly homogenous portrait of who owns electric vehicles in California: Communities with mostly white and Asian, college-educated and high-income residents have the state’s highest concentrations of zero-emission cars. And most are concentrated in Silicon Valley cities and affluent coastal areas of Los Angeles and Orange counties.”

— “Deadly fungus that spread rapidly during COVID was reported in California, CDC says,” by The Sacramento Bee’s Hanh Truong: “Candida auris is considered an urgent antimicrobial resistance threat, the agency stated, because it has shown resistance to several antifungal drugs, spreads quickly and can cause severe infection with high death rates. The fungus is transmitted person-to-person or via contact with contaminated surfaces, according to the California Department of Public Health.”

— “Workers at 23 CSU campuses are bargaining for higher wages. Will they follow UC and strike?,” by The Sacramento Bee’s Maya Miller: “Close to 60,000 workers across the California State University’s 23 campuses are banding together to demand higher wages, better benefits and improved working conditions. Without scheduled step raises, wages have stagnated over the last 15 years”

— “New bill aims to outlaw caste discrimination in California,” by The Associated Press’ Deepa Bharath: “California may become the first state in the nation to outlaw caste-based bias, a safeguard people of South Asian descent say is necessary to protect them from discrimination in housing, education and the tech sector where they hold key roles.”

— “California bill would require all public high schools to hand out free condoms,” by the Los Angeles Times’ Vanessa Arredondo: “Senate Bill 541, co-sponsored by GENup, aims to reduce pregnancies and sexually transmitted infections, particularly in underserved rural areas. The schools would be required to post a prominent notice of available products on campus with additional contact information for these services.”

A message from Elected Officials to Protect America - Code Blue:

BIDEN, HARRIS AND THE HILL

— McCarthy’s newest challenge: Keeping the House GOP peace on war powers, by POLITICO’s Jordain Carney and Sarah Ferris: As the Senate churns toward a bipartisan vote to repeal a pair of decades-old war authorizations, McCarthy has pledged to find a compromise that can pass on his side of the Capitol. But landing an agreement without exposing awkward internal divides may prove near-impossible.

SILICON VALLEYLAND

SILICON SATIVA — “Cannabis brands can now advertise on Twitter — but should they just say no?” opines Jennifer Boeder in the Rolling Stone: “Widespread bans on digital advertising are one of the thousand cuts that have condemned many cannabis businesses to untimely deaths. Google does not allow ads that promote cannabis consumption, sales or purchases — you can’t even provide informational content about cannabis. Facebook has a similar policy.”

MAYBE TRY LINKEDIN? — “Tech layoffs: Job sites Indeed and Glassdoor to slash their workforces,” by the San Francisco Chronicle’s Chase DiFeliciantonio: “It was not immediately clear how many of the affected jobs are in San Francisco, where the company has offices on Mission Street, or in the Bay Area more broadly. The California Employment Development Department said it had not received a WARN notice of the layoffs from Indeed, which are required under state law when an employer cuts at least 50 employees during any 30-day period.”

— “California bill would force Big Tech to pay for news content,” by the Los Angeles Times’ Jaime Ding: “The California Journalism Competition and Preservation Act, announced by Assemblymember Buffy Wicks (D-Oakland) on Monday, if approved, would direct digital advertising giants to pay news outlets a “journalism usage fee” when they sell advertising alongside news content. Additionally, the bill would require publishers to invest 70 percent of the profits from that fee in journalism jobs.”

— “Bay Area tech and biotech layoffs worsen, Microsoft slashes more jobs,” by The East Bay Times’ George Avalos “The latest round of tech and biotech layoffs alone will eliminate 115 tech and biotech jobs in the Bay Area, Microsoft revealed plans to eliminate 56 positions in Mountain View and San Jose.”

A message from Elected Officials to Protect America - Code Blue:

California lawmakers must protect families from Big Oil’s greed. SBX1-2 will hold Big Oil refiners accountable by mandating transparency and oversight of oil markets while authorizing the California Energy Commission to impose civil penalties on refiners who have engaged in price gouging.. Chevron, Marathon, Phillips 66, Valero and PBF Energy produce 98% of the gasoline consumed in California and in 2022, they used their market dominance to nearly triple their yearly profits by hiking up the price of gas. Last year, California families struggled to make ends meet as they were charged $2.61/gallon more than the national average. SBX1-2 will establish a new independent watchdog to deter Big Oil from ripping off Californians, while improving transparency in the oil industry so the state can root out the causes of pricing irregularities. Learn more

MIXTAPE

— “How organ donation in California is about to totally change,” by the San Francisco Chronicle’s Shira Stein.

— “See California's drought nearly disappear in just six months,” by The Mercury News’ Harriet Blair Rowan.

— “City blacklists 4 more firms tied to Mohammed Nuru scandal,” by the San Francisco Chronicle’s Michael Barba.

— "'Little Delano' prevails in international trade dispute with Argentina," by Bakersfield.com.

CALIFORNIA POLICY IS ALWAYS CHANGING: Know your next move. From Sacramento to Silicon Valley, POLITICO California Pro provides policy professionals with the in-depth reporting and tools they need to get ahead of policy trends and political developments shaping the Golden State. To learn more about the exclusive insight and analysis this subscriber-only service offers, click here.

Want to make an impact? POLITICO California has a variety of solutions available for partners looking to reach and activate the most influential people in the Golden State. Have a petition you want signed? A cause you’re promoting? Seeking to increase brand awareness amongst this key audience? Share your message with our influential readers to foster engagement and drive action. Contact Jesse Shapiro to find out how: jshapiro@politico.com.