California energy regulators pause efforts to penalize oil companies for high profits

SACRAMENTO, Calif. -- California vigor regulators Friday enactment the brakes connected plans requiring lipid companies to wage a punishment if their profits ascent excessively high, a impermanent triumph for the fossil substance manufacture 2 years aft the politician declared the authorities had "finally bushed large oil."

The postponement by the California Energy Commission until 2030 comes aft 2 lipid refineries accounting for astir 18% of the state's refining capableness announced their plans to adjacent successful the coming months. The committee has the authorization to walk a penalty, not a request to bash so.

The punishment was considered a landmark portion of Democratic Gov. Gavin Newsom's authorities and the state's ambitious goals to curb clime change. The authorities faces challenges successful its efforts to instrumentality connected the lipid manufacture portion ensuring a unchangeable and affordable substance supply. His medication is besides proposing to temporarily streamline approvals of caller lipid wells successful existing lipid fields successful an effort to support a unchangeable substance supply.

Jamie Court, the president of Consumer Watchdog who supported the law, said the vigor commission's ballot is "basically a giveaway to the industry."

"I'm truly disheartened and disgusted by Newsom," helium said. "I consciousness similar this is conscionable a full about-face. And successful the extremity it's going to effect successful greater terms spikes."

But the Western States Petroleum Association recommended that the authorities postpone a punishment for 20 years.

"A borderline headdress and punishment would beryllium a misguided argumentation that fails to code the basal causes of California's elevated state prices - precocious costs, costly regulations, proviso constraints, and the world that gasoline is, and volition remain, a captious operator of our state's economy," spokesperson Jim Stanley said successful a connection earlier this month.

In 2022, Newsom called the Legislature into a peculiar league to walk a instrumentality aimed astatine holding lipid companies accountable for making excessively overmuch wealth aft a summertime of record-high state prices successful California. The politician signed a instrumentality the pursuing twelvemonth authorizing the vigor committee to penalize lipid companies for excessive profits.

Julia Stein, lawman manager of a clime institute astatine UCLA School of Law, said authorities officials are inactive intent connected advancing their efforts to modulation distant from fossil fuels.

"But I deliberation determination is besides a consciousness astatine the authorities level that we're entering a antithetic signifier of the modulation wherever immoderate of these problems are going to beryllium presented much acutely," she said. "And folks are benignant of present trying to recognize however they're going to attack that successful existent time."

California has the highest state prices successful the nation, mostly owed to taxes and biology regulations. Regular unleaded state prices were $4.59 a gallon Friday, compared to a nationalist mean of $3.20, according to AAA.

The committee hasn't imposed a azygous punishment 2 years aft Newsom gave it the authorization to bash so, nor has it determined what counts arsenic an excessive profit.

Setting a punishment could beryllium risky for the authorities due to the fact that it could unintentionally discourage accumulation and thrust prices up, said Severin Borenstein, an economist and nationalist argumentation prof astatine the University of California, Berkeley.

"It's beauteous wide they are shifting towards much absorption connected affordability and designation that the precocious prices successful California whitethorn not beryllium associated with the existent refinery operations," helium said of authorities officials.