Union of Concerned Scientists Inc.
09/16/2024 | Press release | Distributed by Public on 09/16/2024 10:18
California Lawmakers to Hold Hearings on Plan to Prevent Gasoline Price Spikes During Refinery Shutdowns
The measure would make California the first state in the nation to impose inventory requirements on oil refiners to prevent sudden gas price increases due to supply shortages. Newsom called a special legislative session to consider his plan to give new authority to the California Energy Commission to require refineries to maintain fuel reserves when they go offline for maintenance.
The following statement is by Dr. Jeremy Martin, senior scientist and director of fuels policy at the Union of Concerned Scientists who has been invited to testify during the special session:
"This legislation acts on findings by the California Energy Commission that when oil refiners don't set aside adequate fuel in advance of a planned shutdown, gas prices shoot up and oil company profits spike. The goal is to protect consumers and prevent petroleum companies from abusing their market power.
"I have long encouraged California to plan for a safe and equitable petroleum phaseout and establishing requirements for minimum gasoline storage is a critical step in that process. California's gasoline refining sector is already highly concentrated, and as the state transitions toward cleaner transportation and gasoline consumption declines, the fuel market will change rapidly and the few remaining oil companies will have market power that must be checked. Empowering the Energy Commission's Division of Petroleum Market Oversight to hold these companies accountable for better managing refinery shutdowns is critical, particularly as the oil market becomes increasingly concentrated.
"This bill would ensure stable fuel supplies that will protect consumers from unreasonable price spikes. It will be important to make sure policies like this support the transition away from fossil fuels to renewable electricity and avoid unnecessary and counter-productive investment in fossil fuel infrastructure or any increased pollution burdens."
A final vote on the gasoline storage measure is expected on Oct. 1.
Additional Resources by Jeremy Martin:
Fact Sheet: A Petroleum Phaseout Plan for California
Blogs: