California Gov. Gavin Newsom (D) on Monday signed into law a controversial
slate of plans to tighten fuel refinery storage rules in an effort to
prevent future fuel shortages and price spikes at the pump.

The ABx2-1 bill, approved during a special legislative session by the
California Assembly on Monday morning and by the state Senate on Friday,
will allow state regulators to oversee the amounts of fuel that oil
refiners keep in their inventories. The maintenance of these stocks will
serve to avert deficits that end up raising gasoline prices, according to
the governor�s office.

�What I�m so proud of is that we stood up, we didn�t step back. Everybody
here had the courage of their convictions, and they stood tall,� Newsom
said at a press conference after signing the bill into law. �Big oil does
not have your back � period. Full stop.�

Although ABx2-1 ultimately earned the Legislature�s favor to become state
law, its advancement was neither unanimous nor without pushback � from oil
companies, labor unions, Republican lawmakers and even some state
Democrats.

Here�s what you should know about the legislation.

What will the bill do?
When the bill takes effect in 90 days, a state regulatory agency, the
California Energy Commission, will have the authority to set constraints
on storage levels for each refiner, each fuel and each blending component,
per the bill. The agency will also be able to adjust inventory minimums,
as well as establish conditions under which refiners can draw down or
rebuild reserves.

The legislation will also allow the regulator to ensure that refiners have
resupply plans in place ahead of maintenance outages and to set criteria
that must be met before such events occur.

�This bill will protect Californians from surging gas prices by requiring
refineries to plan for shutdowns and supply chain disruptions,� ABx2-1 co-
author and Assembly Majority Leader Cecilia Aguiar-Curry (D) said prior to
Monday�s final concurrence vote on the Assembly floor.

Why is it controversial?
The final concurrence on the legislation on the Assembly floor, required
after the state Senate amended the initial text, concluded in a vote of 41
ayes and 16 noes.

The Senate tally on Friday was 23-9, following a 44-18 Assembly floor vote
on the initial version earlier in the month. Certain Democrats sided with
Republicans in opposition, while many legislators chose to abstain from
voting entirely.

Debate has mounted over both the terms of the bill itself and the need for
the rushed gathering of a special legislative session, just as the regular
session was ending, in order to pass it.

Per California�s constitution, the governor can call for a special session
� although doing so doesn�t guarantee that the chambers will convene,
according to CalMatters.

Measures approved and signed into law during such a session take effect
after 90 days. As a basis of comparison, if lawmakers had postponed this
bill until the next regular session, the earliest it could have gone into
force would have been Jan. 1, 2026.

Newsom called for this session on Aug. 31, with his office explaining that
�price spikes on consumers are profit spikes for oil companies, and
they�re overwhelmingly caused by refiners not backfilling supplies when
they go down for maintenance.�

The day before Newsom made the official proclamation, Assembly Speaker
Robert Rivas (D) signaled his chamber�s readiness to take on the
legislation outside of the regular session.

�The Assembly has been ready to stop skyrocketing prices at the gas pump
and deliver significant relief to Californians to lower their monthly
energy bills,� Rivas said in a statement at the time.

�We�re on the same page with Governor Newsom about the absolute urgency of
getting this done,� he continued. �If the Governor calls a special
session, we�re going to do the work and deliver results.�

Rivas stressed, however, that he was unwilling to �push through bills that
haven�t been sufficiently vetted with public hearings,� adding that �doing
so could lead to unintended consequences on Californians� pocketbooks.�

Unlike the Assembly, the state Senate was not immediately on board. Just
after Newsom called for the session, state Senate President Pro Tempore
Mike McGuire (D) declared that his chamber would not hold a special
session. He said that the Senate worked on a related package �for the
better part of a year� and had been ready with sufficient votes to get it
�across the finish line this legislative year.�

�We won�t be convening a special session this fall, but we look forward to
continuing conversations with the Governor and Speaker about this critical
issue in the days and weeks to come,� McGuire said at the time.

Ultimately, however, McGuire agreed to convene a special session following
the Assembly�s Oct. 1 passage of the initial text � clarifying that the
state Senate planned �to work quickly and efficiently� to bring
Californians relief at the pump.

The legislation faced opposition from both oil companies and labor unions.

After ABx2-1 received Assembly approval but before it went to the Senate
floor, Chevron sent a letter to lawmakers describing the bill as
�inaccurate and flawed,� as first reported by local television station
KRCA.

The letter warned that �economic fundamentals force prices up when demand
outstrips supply� and that imposing further constraints on inventory would
only result in price increases.

Another letter, sent from multiple labor unions last week, took issue with
the fact that the California Energy Commission, an unelected, ratepayer-
funded entity, would gain �unprecedented regulatory authority to
bureaucratically dictate safety maintenance at in-state refineries.�

The writers warned that �leaving out the workforce with direct knowledge
and insight into refinery operations and maintenance� could jeopardize the
safety of their members.

�Fuel prices are currently down in California, and there is absolutely no
policy reason that this issue could not have been raised in January,� they
concluded, referring to the start date of the next regular legislative
session.

State Sen. Brian Dahle (R) raised concerns last week that the plans would
�create artificial shortages by limiting supply,� describing the
legislation as �a scheme to collect money from oil refineries and
consumers at the pump.�

Assemblywoman Esmeralda Soria (D) voted against ABx2-1 during the initial
Assembly floor hearing due to her unwillingness to �take a risk on new
regulations that could result in higher gas prices.�

Stressing that she is a daughter of farmworkers and is familiar with the
everyday struggles Californians face firsthand, Soria described the bill�s
measures as �unproven [and] risky,� adding that it �could ultimately hurt
the communities that can least afford it.�

How did lawmakers address criticism of the bill?
The amended version of ABx2-1 passed by the state Senate on Friday, and
then approved by the Assembly on Monday, did contain some changes that
were more inclusive of workers.

The final text specifies that the Independent Consumer Fuels Advisory
Committee � a watchdog for the California Energy Commission � will have a
gubernatorial appointee who represents �a labor organization with
experience in refinery operations.�

The amended text also maintains the authority of workers to conduct
emergency shutdowns and necessary maintenance work for safety reasons,
while prioritizing �the health and safety of employees, local communities
and the public.�

�The amendments taken in the Senate provide more protections for workers
and the public,� Aguiar-Curry said prior to the Assembly floor vote. �This
bill clearly states that no regulations will move forward unless there is
a direct benefit to the California Gas consumers.�

Assemblymember Gregg Hart (D), co-author of the bill, touted the
legislation for clarifying existing law in a way �that protects refinery
workers� health and safety, including stop work authority for emergency
and necessary maintenance shutdowns.�

�The amendments make it clear that any regulations issued under this bill
will not modify skilled and trained workforce requirements at refineries,�
Hart added.

https://thehill.com/policy/energy-environment/4933177-california-
legislation-gas-prices/