The bill would have allowed victims of natural disasters, including fires, floods and hurricanes, to sue fossil fuel companies over harm to themselves or their property for damage totaling at least $10,000. Home insurers would also have been able to seek damages under the legislation. The proposal was announced weeks after the Los Angeles-area fires broke out in January, burning thousands of homes and killing at least 30 people.

The Senate Judiciary Committee rejected the bill late Tuesday, with several Democrats abstaining, but left open the possibility for it to be reconsidered later this year. Opponents also said it would threaten jobs in the energy industry by dealing a blow to business, and that it would be difficult to prove a specific company’s responsibility for a particular natural disaster.

State Sen. Scott Wiener, a Democrat representing San Francisco who authored the bill, rejected the argument that it would lead to higher gas prices. He said it was about holding the fossil fuel industry accountable for the impacts of climate change. The bill would have eased the burden on disaster survivors and insurance companies to cover damage costs, he said.

“Today’s vote is a setback for the victims of the Los Angeles wildfires and for the cost of living in California,” Wiener said in a statement. “Victims of the Eaton and Palisades Fire — and of all climate disasters — deserve accountability for the decades of Big Oil lies that devastated their communities.”

When fossil fuels such as oil and gas are burned for energy, carbon dioxide and other emissions enter the Earth’s atmosphere, causing the planet to warm. Climate change has made natural disasters more frequent and intense.

State Sen. Anna Caballero, a Democrat representing part of the Central Valley, said ahead of the vote that lawmakers’ decision not to support the bill shouldn’t be viewed as a move to deprioritize environmental policy. And she said it wouldn’t help people who lost their homes to recent fires rebuild.

“If this was going to actually result in building homes in the fire zones faster, better and with more efficiency, I would probably support it,” she said. “But from my view, this is more about lawyers. This is about litigation.”

Wiener said it was important for California to remain a climate leader, invoking President Donald Trump’s efforts to roll back environmental policies.

Trump signed an executive order Tuesday to identify state rules he said could hinder “America’s energy dominance.” He called out California’s cap-and-trade program, as well as other climate policies in New York and Vermont.

The California bill’s failure to advance comes after lawmakers in recent years blocked a proposal that would have made oil companies liable for the health problems of people who live close to oil wells.

California, a U.S. trendsetter on climate policies, has approved policies over the years to limit emissions from cars, lawn mowers, trucks and trains. But some of those measures have faced threats from the Trump administration. The state Air Resources Board pulled back its requests for federal approval to enforce rules curbing pollution from diesel-powered big rigs and trains ahead of Trump’s return to office.

Other major California rules are at risk. Congressional Republicans introduced proposals last week to block state policies approved by President Joe Biden’s administration that would ban the sale of new gas-powered cars by 2035, cut tailpipe emissions from medium- and heavy-duty vehicles, and curb smog-forming nitrogen oxide pollution from trucks.

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As California lawmakers advance a bill that could ultimately punish oil companies for excessive profits, the state’s attorney general says that the legislative action will help hold oil companies accountable.

Last year, Gov. Gavin Newsom convened a special session of the Legislature and tasked lawmakers with taking action to protect consumers after the state saw gas prices skyrocket over the summer.

While the original plan of taxing oil companies did not advance in the Legislature, lawmakers and the governor settled on a bill that would let a state commission determine whether to impose penalties on oil companies.

“We experienced over the last year gas prices bordering on $7, almost $3 more than the national average,” Attorney General Rob Bonta said in an interview with Inside California Politics. “And we learned that $200 billion in profit went to oil companies and gas companies during that time.”

The bill, SB X1-2, authored by Senator Nancy Skinner, would authorize the California Energy Commission to set a “maximum gross gasoline refining margin” and to set penalties for exceeding it.

The bill also requires oil refiners to include more information in already-existing required reports they provide to the commission.

“This is…to make sure that we are holding oil companies accountable, that there is oversight, that there is transparency,” Bonta said. “[This is to make sure] that they are reporting to a regulator…information that exists but information that is not being shared that a regulator should know and understand to protect Californians.”

The bill passed the California Senate 30-8 on Thursday and the Assembly is expected to vote on it in the coming days.

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Jeremy B. White | Politico

Gov. Gavin Newsom signed legislation that could force the oil industry to cap profits and reveal gas price data in its largest U.S. market – demonstrating his clout in a state dominated by Democrats and the weakening of a once powerful lobby.

The legislation Newsom approved Tuesday extends a winning streak for the governor against oil companies, long one of most formidable lobbying powers in California’s state capital.

The governor overcame strenuous industry opposition in muscling a bill through the Legislature that forces companies to turn over earnings data and exposes them to penalties. It came just months after he pushed through a climate package that fortified emission targets and restricted drilling.

“We proved we can actually beat big oil,” Newsom said at a signing ceremony at the Capitol.

That victory came despite the industry deploying “30-plus lobbyists” to stymie the bill, he said.

The industry acknowledges the setbacks.

“I think what we’ve seen is the governor has put this industry in the crosshairs for a number of years now,” said Kevin Slage, a spokesperson for the Western States Petroleum Association, the main lobbyist for the industry in Sacramento. “With a supermajority and the ability of governors to pull levers with legislators, it’s a tough policy environment for us for sure.”

Newsom has aggressively pursued an ambitious legislative climate agenda since last summer, winning praise from environmentalists who once lamented his hands-off approach and adding to executive orders phasing out gas-powered car sales and fracking. And he has regularly denounced oil companies for standing in his way. Last summer, he excoriated the companies for running ads that framed his push last summer as a matter of righteousness and “which side we’re on.”

“Big oil lost,” Newsom told an audience in New York after pushing the package through the Legislature, “and they’re not used to losing.”

He rode the momentum from those victories into a quest to curtail oil industry profits, announcing his plan before the bill-signing period ended. The proposal has evolved substantially, morphing from a windfall profits tax to a framework for the California Energy Commission to investigate earnings. But Newsom’s rhetoric remained the same: oil companies are ripping you off.

Newsom was uncharacteristically engaged with legislators throughout the process, visiting caucuses and speaking with members individually and in smaller groups. After legislators balked at Newsom’s initial idea, expressing fears it would backfire and raise prices, the administration agreed to language requiring the Energy Commission to ensure the benefits to consumers would outweigh harms.

That both assuaged legislators’ fears of unintended consequences and helped lawmakers feel they were being brought in rather than dragged along. A senior legislative staffer called Newsom’s tactic a “sea change” in his approach to the Legislature and a “very significant factor in how this got landed.”

“This is not something the governor is shoving down our throats,” Assemblymember Jacqui Irwin (D-Thousand Oaks) said on the Assembly floor.

Crafting that language took months. The revamped proposal then rocketed through the Legislature in less than two weeks as Newsom and Democrats sought to preempt a counteroffensive. Oil industry opponents protested that Newsom was rushing through an unvetted proposal that would harm consumers by distorting a complex industry. It didn’t matter.

“Fossil fuel obsolescence is on the horizon,” Assemblymember Alex Lee (D-Milpitas) told members.

That hasn’t always been the case. California’s proud environmentalist bent belies the political and economic might of in-state oil extractors and refiners. Industry groups spend millions of dollars to elect allies to the Legislature — often moderate Democrats — where the corridors teem with lobbyists who are tasked with thwarting legislation that hurts companies’ bottom line. The Western States Petroleum Association spent nearly $20 million on lobbying and campaigns in 2021 and 2022.

They have enlisted powerful political allies. That has meant hiring connected players like the former leader of moderate Democrats and California’s former oil and gas regulator. More crucially, the oil industry forged an alliance with a union umbrella group whose members work at refineries — a critical source of influence in a Capitol where organized labor holds significant sway.

Bills to slash emissions or require new oil wells be far from homes and schools could not overcome that opposition. Newsom’s intervention was decisive. Lawmakers revived the measures at the governor’s urging and pushed them to his desk.

“That is perhaps the most powerful political coalition in the state Capitol,” said Assemblymember Al Muratsuchi (D-Torrance), who has become a vocal critic of oil industry influence. “We’re only able to overcome that with the governor taking the lead and championing climate measures.”

Shifting voter views are also driving political dynamics. A decade ago, a plurality of California voters said strict environmental laws were too costly. By 2021, nearly two-thirds said they were worth the cost. Voters are more likely to call climate change a serious issue as annual wildfires have become more destructive. Both Newsom and the Legislature have taken advantage.

“The governor was more aggressive, and I think that inspired the Legislature to be more aggressive. While there’s allies in both parties to the oil industry, I think a lot of folks were hungry to get stuff done,” said former Assemblymember Cristina Garcia, who helped negotiate last year’s climate package. “The governor deserves some credit but I think here’s some other factors as well with the stars lining up politically so it doesn’t feel like you’re taking such a political hit.”

The money map is changing as well. The climate-focused Energy Foundation spent millions in Sacramento last year, putting it on the same plane as oil companies. The California Democratic Party now refuses oil money. The industry can still shower candidates with cash, but their resources increasingly run up against voter distaste with fossil fuel influence.

The shifting calculus for some lawmakers, Garcia said, has been from “’You’re going to come spend a bunch of money against me, and I could lose my seat” to “you’ll come spend a bunch of money against me and I won’t lose my seat, because the electorate rewards us for being bold.”

Several Democrats who benefited from millions of dollars in oil industry campaign spending voted for Newsom’s oil profits penalty. At the same time, a bloc of Assembly Democrats who were industry beneficiaries withheld their votes.

“A lot of those members rely on campaign support from big oil,” Muratsuchi said.

That support will likely continue. The industry could also undercut Newsom by passing a referendum overturning the oil well setbacks law. But the governor has helped shift the political dynamics around the oil industry, said former Sen. Fran Pavley, an architect of the state’s cap-and-trade system who is now the USC Schwarzenegger Institute’s environmental policy director.

“They are very influential in many parts of the state,” Pavley said, but “I think Gavin Newsom’s done a good job in getting the political wind changing.”

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WASHINGTON (AP) — House Democrats on Wednesday accused oil companies of “ripping off the American people” and putting profits before production as Americans suffer from ever-increasing gasoline prices during the war in Ukraine.

“At a time of record profits, Big Oil is refusing to increase production to provide the American people some much needed relief at the gas pump,” said Rep. Frank Pallone, D-N.J., chairman of the House Energy and Commerce Committee.

Oil executives, testifying before Congress for the second time in six months, responded that oil is a global market and that oil companies don’t dictate prices.

“We do not control the market price of crude oil or natural gas, nor of refined products like gasoline and diesel fuel, and we have no tolerance for price gouging,” said Chevron CEO Michael Wirth.

Facing sharp questions from Democrats, Wirth, ExxonMobil CEO Darren Woods and other executives said their companies have no plans to halt payments of dividends to stockholders or to restrict stock buybacks that have enriched shareholders and company executives. The six companies at the hearing recorded $77 billion in profits last year, they testified.

The hearing comes as President Joe Biden has ordered the release of 1 million barrels of oil per day from the nation’s strategic petroleum reserve for six months in a bid to control energy prices, which have spiked as the United States and its allies have imposed steep sanctions on Russia over its invasion of Ukraine. The national average gas price was $4.16 a gallon for regular on Wednesday, up from $2.87 a year ago, according to AAA.

Biden and other Democrats have blamed Russian President Vladimir Putin and the U.S. oil industry for the increase, citing reports that oil companies have made record profits in recent months as prices have risen following Russia’s invasion of Ukraine.

“This is the Biden price hike,″ countered Rep. Cathy McMorris Rodgers of Washington state, the committee’s top Republican.

Noting that prices were increasing before Russia invaded Ukraine in late February, McMorris Rodgers said Americans “are too smart and have not fallen for this” claim by Biden and other Democrats. She called the hearing “purely political.”

Woods said Exxon has halted investments in Russia and is withdrawing from operations there. The company is increasing production in the United States, Woods said, including in the oil-rich Permian Basin in New Mexico and Texas. Exxon also is increasing production outside the U.S., including “a world-class development in Guyana,″ he said.

Rep. Kim Schrier, D-Wash., said gas prices are close to $5 per gallon in her Seattle-area district. Her constituents “are mad, and they should be,″ she said, citing the record profits oil companies are reaping.

“This feels like gouging. It even feels like profiteering,″ Schrier said. Prices at the pump have not gone down in recent weeks along with crude oil prices, she and other Democrats noted.

At a time of war and high prices, “oil companies should not be sending profits back to shareholders,″ she said, urging oil executives to restore production to pre-pandemic levels.

Wirth, the Chevron CEO, said his company produced a record amount of oil in 2021, while also making sure to “return value to shareholders″ through higher dividends and stock buybacks.

“They’re not mutually exclusive. We can do both,″ he said.

Democrats have introduced bills in the House and Senate to impose a windfall tax on oil profits, although the idea has generated little momentum on Capitol Hill. West Coast senators, including Senate Commerce Committee Chair Maria Cantwell of Washington state, have called on the Federal Trade Commission to investigate possible price manipulation on the West Coast, where prices in California top $6 per gallon.

“Americans have the right to know why one of our most important commodities doesn’t have the right amount of transparency and oversight,″ Cantwell said at a hearing Tuesday. Targeting what she called the “mysterious middle of the supply chain,″ Cantwell said lawmakers and the FTC should ensure that — as in the 2001 energy crisis spurred by Enron — “there aren’t a bunch of ‘smart guys in the room’ hurting consumers because they think we can’t figure out what is happening.″

Rep. Tim Walberg, R-Mich., blamed Biden for high gas prices, citing cancellation of the Keystone XL oil pipeline and a moratorium on new drilling leases on federal lands. Walberg said he was disappointed that neither Energy Secretary Jennifer Granholm nor any other administration official appeared at the House hearing “to answer for the administration’s failed policies.″

Biden has called on Congress to impose financial penalties on companies that lease public lands but don’t produce oil, a request that so far has been ignored. Biden also invoked the Defense Production Act to encourage mining of critical minerals for batteries in electric vehicles, part of a broader push to reduce use of fossil fuels and address climate change.

“The bottom line is if we want lower gas prices we need to have more oil supply right now,” Biden said last week in announcing the strategic oil release. Higher prices have hurt Biden’s approval domestically and added billions of oil-export dollars to the Russian government as it wages war on Ukraine.

Oil companies have pledged to boost domestic production, but it is growing slowly. Executives point to supply chain and labor constraints as a result of the COVID-19 pandemic, as well as investor demands for returns. They have called for more federal permits to allow additional leases.

Besides Exxon and Chevron, other companies represented at the hearing were Shell, BP, Pioneer Natural Resources and Devon Energy.

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