### New Legislation Aims to Curb Gas Price Spikes in California

Governor Gavin Newsom signed into law on Monday a bill designed to stabilize gas prices and save Californians money at the pump. The legislation, known as ABX2-1, empowers the state to mandate oil refiners maintain minimum fuel inventories to prevent supply shortages, which often lead to price increases. Additionally, the law grants the California Energy Commission the authority to compel refiners to have resupply plans during outages.

"Price spikes have cost Californians billions of dollars over the years, and we're taking steps to prevent further financial strain," stated Gov. Newsom during the signing ceremony. He emphasized that the new law provides the state with essential tools to manage fuel supplies and avoid maintenance-related shortages that can drive up prices.

The Governor, at a press conference, labeled the legislation "a big damn deal," accusing major oil companies of exploiting California residents through deceptive practices. His office cited data from the Division of Petroleum Market Oversight, suggesting that had the proposal been implemented last year, Californian consumers could have saved hundreds of millions, if not billions, of dollars in 2023.

The passage of ABX2-1 did not come without controversy. Initially, California Senate President pro-Tempore Mike McGuire indicated reluctance to convene a special session as the Senate already had adequate votes for the California Made and Clean Energy Package. However, an Extraordinary Session was eventually convened at the beginning of October, making it the second such session in two years.

Opposition arose from labor leaders and refinery representatives. Union representatives argued that the legislation could force oil companies to retain supplies instead of distributing them, potentially jeopardizing worker safety and resulting in job cuts. Jeremy Smith, Chief of Staff for the State Building and Construction Trades Council, emphasized the need for maintenance schedules based on infrastructure conditions and equipment lifecycles.

California refiners also voiced their concerns, arguing that the new requirements would escalate costs and necessitate the construction of additional storage tanks, a process that could take years and cost tens of millions of dollars. Mark Nechodom from the Western States Petroleum Association criticized the bill, stating it would disrupt the current just-in-time system.

Chevron swiftly reacted, issuing a letter urging California legislative leaders to reject the law, citing potential new costs and operational burdens. Moreover, the governors of Nevada and Arizona expressed apprehension that the legislation could also drive up gas prices in their states.

As of Monday, California drivers were paying an average of $4.67 for a gallon of regular gas, the highest nationwide, according to AAA data. While Gov. Newsom acknowledged that noticeable price drops might not occur until the summer of 2025, he noted that the legislation would remain in effect until 2032, at which point lawmakers will decide whether to extend or repeal it.