News: Newsom runs up the score on oil

Wednesday, March 29, 2023

Newsom runs up the score on oil

Mar 29, 2023

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

THE BUZZ: Gov. Gavin Newsom has California’s oil industry on a losing streak.

Newsom completed his quest to cap industry profits Tuesday, signing a bill that he swiftly muscled through the Legislature over the protests of the Western States Petroleum Association and its allies. The governor made victory a political imperative after spending months decrying the industry’s greed and vowing a response. He prevailed thanks to some serious legislative legwork — and in doing so kept the fossil fuel industry on its heels.

Rewind to last summer. Climate-focused Democrats and their environmentalist allies had suffered a string of defeats on bills to curtail emissions and separate new oil wells from homes. Many expressed despair at overcoming an alliance between oil companies and the Building Trades and disillusionment with the governor’s legislative inaction.

And then Newsom engaged. He dropped by legislative caucuses to rally the troops for a renewed climate campaign, and — with oil industry attack ads running in Florida — framed the fight as a righteous test of “whose side we’re on.” He wielded the might of his office to get all but one of the bills across the finish line and then went on a victory lap. “Big oil lost, and they’re not used to losing,” he told a crowd in New York.

Now they’ve lost yet again. Industry representatives warned Newsom’s profits penalty would distort a complex industry and hurt consumers; they urged lawmakers not to rush an unvetted concept into law. But the alacrity was strategic. After spending months wooing lawmakers and crafting amendments — an uncharacteristic level of engagement that signaled his seriousness — Newsom had Democrats move quickly to preempt an industry counteroffensive.

Newsom’s proposal morphed over the months, but his rhetoric did not: Big Oil is ripping you off, he told us over and over, and we’re going to do something about it. Most Republicans and industry representatives blame California’s thicket of regulations and its dwindling refinery supply for exorbitant prices; Newsom and legislative Democrats fault the industry. Soon California will have the data to draw a more precise conclusion, and fines could follow.

Industry-bashing is good politics for Newsom — and that points to a larger dynamic. Oil companies spend millions of dollars to elect moderate Democrats and fill Sacramento’s corridors with lobbyists. They’ve had ample success killing bills that would hurt their bottom line, even if doing so augmented Gov. Jerry Brown’s zeal to a maximum degree.

The politics are shifting: California is moving to abandon fossil fuels, with Newsom urging things along, and intensifying climate change anxiety is affecting voters. That set the table for Newsom to wield the singular power of the governor’s office, accomplishing what legislators alone could not. Here’s our story on the governor overpowering the oil industry.

BUENOS DÍAS, good Wednesday morning. Los Angeles County District Attorney George Gascón narrowly avoided facing a recall, but he still has to stand for re-election this year — and it's likely to be a bruiser. Deputy D.A. Jonathan Hatami today launches an effort that will challenge L.A. line prosecutors’ long battle with their boss.

BUENOS DÍAS, good Wednesday morning. Los Angeles District Attorney George Gascón narrowly avoided facing a recall, but he still has to stand for re-election this year — and it is likely to be a bruiser. Deputy D.A. Jonathan Hatami today launches an effort that will challenge L.A. line prosecutors’ long battle with their boss.

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.

WHERE’S GAVIN? Nothing official announced.

QUOTE OF THE DAY: “Just as there are no atheists in foxholes, it appears that when there is a bank crash, there are no libertarians in Silicon Valley.” Sen. Sherrod Brown at a congressional hearing on Silicon Valley Bank’s collapse.

BONUS QOTD: “We no longer need a true crime podcast in order to solve where the mystery surcharge comes from.” Assemblymember Jacqui Irwin before Newsom signed the oil profits penalty.

TWEET OF THE DAY:

AsmJasmeetBains

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TOP TALKERS

HERE WE GO AGAIN — “'Extratropical cyclone' is bringing severe weather to parts of California. Here's what to expect,” by the San Francisco Chronicle’s Gerry Díaz: “Most of this severe weather will peak Tuesday morning and steadily drop off by the afternoon across most of the Bay Area, but lingering showers and thunderstorms are forecast to hang around through Wednesday afternoon — well after the worst of the storm has passed.”

— “After police killings, families are kept in the dark and grilled for information,” by the Los Angeles Times’ Brian Howey: “For years, law enforcement agencies across California have been trained to quickly question family members after a police killing in order to collect information that, among other things, is used to protect the involved officers and their department, an investigation by the Los Angeles Times and the Investigative Reporting Program at UC Berkeley’s Graduate School of Journalism has found.”

CAMPAIGN MODE

HIGH DESERT SHOWDOWN — Democratic Palmdale City Councilmember Eric Ohlsen is jumping into the race to for the opening 23rd Senate district, which looks like one of the cycle’s most competitive: Democrat Kipp Mueller and Republican former Assemblymember Suzette Vallares are already running for the D+10 seat. Ohlsen enters with an endorsement from Assemblymember Juan Carrillo.

CALIFORNIA AND THE CAPITOL CORRIDOR

LOOSE CHANGE? — “As talks with teachers heat up, LAUSD budget shows a higher ending balance, with caveats,” by the Los Angeles Times’ Howard Blume: “For months, the Los Angeles Unified School District had been saying that, despite an ending balance of $4.93 billion for the current school year, the district could be at financial risk in the future. Part of that equation changed Monday, when the district updated that figure to $5.12 billion — while also stating the system’s potential financial risk is unchanged and the available money for employee raises may be tighter than before.”

— Does S.F. Mayor Breed or do supervisors have more power to fix crime, housing and homelessness? by the San Francisco Chronicle’s Mallory Moench: “The answers are nuanced, but our reporting found in general that Breed has power over the areas of policing and homelessness. Supervisors exert significant influence over housing through legislation, although the mayor runs departments that oversee development.”

— “California farmers flood fields to boost groundwater basin,” by The Associated Press’ Amy Taxin: “Taking some tomatoes out of production for a year is an easy choice if it means boosting future water supplies for his farm about 35 miles (56 kilometers) southwest of Fresno. He’s pumping 300 acre-feet a day — enough to supply hundreds of households for a year — from the gushing North Fork of the Kings River onto former vegetable fields and others dotted with pistachio trees, which can withstand heavy flooding.”

— “The scramble to save California’s heartland,” by The New York Times’ Mark Abramson and Adeel Hassan: “The Central Valley of California is, essentially, a great basin with an intricate plumbing system of reservoirs, dams, levees and spillways. But the dozens of atmospheric rivers — long bands of moisture in the sky — that have walloped the region recently have left no place for excess water to go, forcing farmers and emergency crews to race to save dairies, farmland and orchards.”

CORTESE’S CRITIQUE — “In push for accountability, San Jose's homelessness spending to be audited by the state,” by The Mercury News’ Grace Hase: “On Wednesday, the state’s Joint Legislative Audit Committee voted unanimously to approve an audit request made by Sen. Dave Cortese (D-San Jose) last year. The audit comes at a time when California has spent $15 billion on homelessness over the last several years.”

— “Disney's planned community in California takes shape with nod to 'The Incredibles',” by the Los Angeles Times’ Luke Money: “Officials on Friday released fresh details about the first Storyliving by Disney project in Riverside County, an ambitious effort to infuse a master-planned community with the Burbank entertainment giant’s trademark whimsy and wonder.”

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BIDEN, HARRIS AND THE HILL

— “Inside the backchannel communications keeping Donald Trump in the loop on Republican investigations,” by CNN’s Annie Grayer, Alayna Treene, Melanie Zanona and Kristen Holmes: “The constant, and sometimes direct, communication between Trump and the committees has emerged as a crucial method for Trump to shape Republicans’ priorities in their newly-won House majority. It also underscores the extraordinary sway an ex-president still holds over his party’s lawmakers and the deference many still afford him.”

SILICON VALLEYLAND

JUST A HICCUP? — “Silicon Valley Bank bought, but Silicon Valley has already moved on,” by The Mercury News’ Ethan Baron: “‘We don’t even think about it anymore except to say, ‘Oh my gosh, remember how crazy it was?’’ said Chon Tang, general partner at SkyDeck, UC Berkeley’s startup accelerator.”

— “Tinkering with ChatGPT, workers wonder: will this take my job?” by The New York Times’ Lydia DePillis and Steve Lohr: “It is too early to tally the enabled and the endangered, or to gauge the overall impact on labor demand and productivity. But it seems clear that artificial intelligence will impinge on work in different ways than previous waves of technology.”

MIXTAPE

— “Two men beat S.F. drug dealing charges after lawyers argue they were human trafficking victims,” by the San Francisco Chronicle’s Megan Cassidy.

— “A campaign aide didn’t write that email. A.I. did,” by The New York Times’ Shane Goldmacher.

— “Three inmates died in Los Angeles County jails in just over a week,” by the Los Angeles Times' Keri Blakinger.

— “The jobs most exposed to ChatGPT,” by The Wall Street Journal’s Lauren Weber and Lindsay Ellis.

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.

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