55 groups urge Gov. Newsom to veto Big Oil-backed bill weakening refinery price gouging legislation

Hundreds of protesters rallied and marched in Old Sacramento Sunday urging President Biden and Governor Newsom to end fossil fuels - and make a sustainable transition to renewable energy. Photo by Dan Bacher. |



By Dan Bacher | 

Los Angeles, CA — The struggle between Big Oil, represented by the Western States Petroleum Association (WSPA), and climate justice, environmental and public interest  groups, heated up in California this week.

Fifty-five organizations sent a letter to Governor Newsom urging him to veto SB 842 (Bradford), the Western States Petroleum Association-backed legislation that they say “would make it more cumbersome to assess and control price spikes consumers face at the pump during oil refinery maintenance periods.”

SB 842, initially a homelessness initiative, was gutted and amended at the last minute. As a result, it was able to slip by under that radar with only the Western States Petroleum Association (WSPA) listed in support, according to the letter.

In case you didn’t know, WSPA is the largest and most powerful corporate lobbying group in California. The organization is headed by President/CEO Catherine Reheis-Boyd, who chaired the Marine Life Protection Act (MLPA) to create so-called “marine protected areas” in state waters off the Southern California Coast at the same time she was lobbying to expand offshore drilling in the region.

The groups signing onto the letter called the bill an “11th hour attack from Big Oil to upend California’s Price Gouging Penalty.” 

The bill passed unanimously in the Assembly and on a 26-6 count (with 8 abstaining from voting) in the Senate on September 14.

The aye votes in the Senate were Alvarado-Gil, Archuleta, Ashby, Atkins, Bradford, Caballero, Dahle, Dodd, Durazo, Eggman, Glazer, Grove, Hurtado, Jones, McGuire, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Umberg and Wilk. The noes were Becker, Gonzalez, Menjivar, Smallwood-Cuevas, Stern and Wiener, while the NVRs were Allen, Blakespear, Cortese, Laird, Limón, Min, Skinner and Wahab.

“This bill undermines SBX 1-2, legislation championed by Governor Gavin Newsom to create regulatory oversight for the state’s refiners, after California drivers faced record prices at the pump in 2022,” according to a statement from the coalition of organizations.

“Maintenance periods have strategically been used by refiners as moments to spike prices for drivers, providing the rationale behind adding more robust regulatory oversight during those periods within SBX 1-2. SB 842 limits the ability of the state to prevent unnecessary refinery maintenance,” the groups stated.

Letter co-signers include Consumer Watchdog, Elected Officials to Protect America (EOPA), Greenpeace USA, the Center for Biological Diversity, Climate First: Replacing Oil & Gas (CFROG), Climate Hawks Vote, Environmental Working Group, San Francisco Bay Physicians for Social Responsibility, Stand.earth, Sunflower Alliance, the Oil and Gas Network, and many others.

“SB 842, as it stands, weakens a key provision within SBX 1-2, which after being passed and signed into law in March created a Division of Petroleum Market Oversight within the California Energy Commision. A ‘gut and amend’ effort subject to no substantive public oversight or legislative debate, SB 842 now goes to the Governor's desk for consideration, having until October 14 to either veto or sign the bill, or do nothing and then the bill becomes law,” the groups argued.

“At the beginning of 2023, you and the California Legislature made history by passing the Price Gouging Penalty (SBX 1-2), a landmark bill to hold the oil industry accountable for raising gasoline prices for Californians amid record profits,” the letter reads. “Thanks to your leadership, the bill was passed and signed, marking a historic victory for everyday Californians over corporate greed.”

“SB 842 would prevent the California Energy Commission from stopping unnecessary refinery maintenance without consulting with industry stakeholders and the Department of Industrial Relations,” the letter continues. “The bill, which was initially a homelessness initiative, was gutted and amended at the last minute, and as a result was able to slip by under that radar with only the Western States Petroleum Association (WSPA) listed in support.”

The California Department of Industrial Relations (DIR) would oversee the additional layer of review, potentially serving as a way to slow down or stave off consumer protections in a “proverbial regulatory oversight death by 1,000 cuts,” according to the groups.

The author of the bill,  Senator Steven Bradford (D-Gardena), sees it otherwise, saying that the Department of Industrial Relations needs to be consulted “to ensure that years of process safety management are considered.”

“During the special session earlier this year, the legislature approved and the Governor signed, SBX1-2 by Senator Skinner, related to California’s gasoline supply and pricing issues,” claimed Bradford. “During the hearing of SB X1 2 before the Senate Energy, Utilities and Communications Committee which I Chair, I expressed concern about a provision in the bill that granted the California Energy Commission the authority to consider ways to manage necessary refinery turnarounds and maintenance that would minimize the impact of maintenance related production losses on fuel prices. While the bill required consultation with the Labor and Workforce Development Agency and labor and industry stakeholders, it did not require consultation with the DIR.”

“SB 842 would add the DIR to the list of agencies that should be consulted to ensure that years of process safety management are considered. SB 842 would also add that for any regulations adopted by the CEC regarding scheduling or rescheduling of maintenance of refineries, the commission shall consult with labor and industry stakeholders and aim to avoid any adverse impact to the safety of employees and surrounding communities, labor, equipment availability, other market impacts, and cost,” Bradford argued.

The legislation now awaits Newsom’s signature, now that it has passed both chambers of the Legislature.

“With gasoline prices rising past $6 in LA County, this is no time for the state to take its foot off the gas in the fight to stop price spikes,” said Jamie Court, president of Consumer Watchdog. “Governor Newsom should veto this outrageous power grab by Big Oil.”

Court noted that SB 842’s passage comes as prices at the pump are back on the rise in 2023, starting the year at an average price of $4.37 per gallon and now sitting at $5.55 per gallon. Further, gasoline prices in California are currently $1.67 per gallon more than U.S. gasoline prices at-large, with new state reporting showing that refinery margins have doubled since the beginning of the year, sitting at $1.20 per gallon. 

A full copy of the letter is linked here.

WSPA and Big Oil pump Big Money into influencing California regulators

The Western States Petroleum Association (WSPA), Chevron and the oil companies exercise their influence and power through a very sophisticated public relations machine in California and the U.S.  

WSPA describes itself as “non-profit trade association” that represents companies that account for the bulk of petroleum exploration, production, refining, transportation and marketing in Arizona, California, Nevada, Oregon, and Washington. WSPA’s headquarters is located right here on L Street in Sacramento.  

Since 2009 I have documented how WSPA and the oil companies wield their power in 8 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups; (5) working in collaboration with media; (6) sponsoring awards ceremonies and dinners, including those for legislators and journalists; (7) contributing to non profit organizations; and (8) creating alliances with labor unions, mainly construction trades.

The oil and gas industry spent over $34.2 million in the 2021-22 Legislative Session lobbying against SB 1137, legislation to mandate 3200 foot buffer zones around oil and gas wells, and other bills they were opposed to: cal-access.sos.ca.gov/…  

For the oil companies, this was just pocket change when you consider that combined profits of California oil refiners, including PBF Energy, Chevron, Marathon Petroleum, Valero, and Phillips 66, were $75.4 billion in 2022.  

The two biggest spenders were WSPA and Chevron. WSPA spent $11.7 million in the 2021-22 session, while Chevron spent a total of $8.6 million lobbying California officials.

Lobbying disclosures from Quarter 2 of 2023 reveal that oil companies and trade associations spent more than $3 million lobbying and a grand total of $4,085,639.57 in just three months to shape policy making efforts in its favor in California. That brings the total spent by Big Oil and WSPA to over $13.4 million total in the first six months of 2023, putting them on track to exceed the 2022 expenditure of $18 million.   

Chevron topped the lobbying expenses with $1,139,130, while WSPA placed second with $716,824.  

The latest disclosures follow the $9.4 million that Big Oil spent to influence the California Legislature, Governor’s Office and agencies in the first quarter of 2023. Chevron came in first with over $4.9 million spent in the first quarter, while the WSPA finished second with over $2.3 million and Aera Energy finished third with nearly $628,000.  

WSPA sponsors media dinners and awards for journalists

Over the past year, Big Oil has launched a chilling campaign to sponsor dinners, awards ceremonies and conferences for journalists and the media. WPSA sponsored a “media dinner” on Tuesday, February 28 in Sacramento as part of #BizFedSactoDays.

The flyer for the event stated, “Journalists who play an outsize role in shaping narratives about state politics and holding lawmakers accountable will join business leaders to pull back the curtain on how they select and tell stories about California policies, policy and power.”

Speakers at the program included Coleen Nelson of the Sacramento Bee, Laurel Rosenhall of the Los Angeles Times, Kaitlyn Schallhorn of the Orange County Register and Dan Walters of Cal Matters.

More recently, the Sacramento Press Club announced that WSPA was a new “Lede Sponsor” of the Sacramento Press Club's Journalism Awards Reception that was held on March 29. Sadly, only two journalists, myself and Aaron Cantu of Capital and Main, publicly challenged the funding of journalist awards by Big Oil.  

In addition to sponsoring journalism events in California, the Western States Petroleum Association has expanded its campaign to influence journalists nationally. WSPA and the controversial waste management firm Veolia North America sponsored events at this year’s Society of Environmental Journalists (SEJ) conference in Boise, Idaho, according to a report from DeSmog: scq.io/... 

The agenda for the conference, hosted in Boise, Idaho, revealed that WSPA and the waste management company Veolia North America sponsored two of the “beat dinners” hosted on April 21, the article by Sam Bright reported.

When #BigOil teams up with journalists, columnists and editors at events and only a couple of writers think there’s something wrong with this, you know we must be in deep trouble.


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