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The California Energy Commission said that on 63 days last year
California refiners maintained less than 15 days of supply of
gasoline, a situation that it said spiked prices and cost
drivers $650 million.
“Price spikes at the pump are profit spikes for Big Oil.
Refiners should be required to plan ahead and backfill supplies
to keep prices stable, instead of playing games to earn even
more profits," Newsom, a Democrat, said in a release.
It was unclear when the plan could take effect and Newsom's
office did not immediately respond to a request for comment.
Under the plan, which industry has criticized as attacking
producers, California’s oil refiners would be required to
demonstrate resupply plans that are adequate to address losses
in production when their plants are undergoing maintenance work.
California found that in 2023 gasoline prices spiked largely due
to refineries going offline without adequately planning to
backfill supplies.
The plan comes three months after the U.S. Department of Energy
sold its 1 million barrel Northeast gasoline reserve, which
Washington created after 2014's Superstorm Sandy left motorists
scrambling for fuel supplies. The U.S. Congress mandated the
sale after the reserve was criticized as expensive to maintain
and for not increasing energy security.
California, the most populous U.S. state, is home to some of the
country's highest average gasoline prices and has had a fraught
relationship with oil companies. The state has ambitious targets
for electric car adoption and is the only one with a waiver from
the federal environmental regulator to set its own vehicle
emissions regulations.
This month, U.S. oil company Chevron said it was moving its
headquarters to Houston from San Ramon, California.
Catherine Reheis-Boyd, president and CEO of the Western States
Petroleum Association said Newsom's plan was "nothing more than
a political attack on consumers and our industry."
"To impose new operational mandates on energy producers based on
such falsehoods is regulatory malpractice, and ignores the
logistical challenges and costs associated with such a plan,"
she said.
(Reporting by Timothy Gardner; Editing by Josie Kao)
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