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big oil price gouging
A 'Landmark Victory' for Consumers and Climate as California Passes Big Oil Price Gouging Law
"Whether it's price gouging at the pump or drilling in people's backyards, Big Oil's days of harming our health and our pocketbooks must end," said one advocate.
Mar 28, 2023
Climate and consumer advocates on Tuesday hailed California lawmakers' passage of legislation aimed at tackling Big Oil price gouging as the proposal headed to the desk of Democratic Gov. Gavin Newsom, who said he will sign the measure into law.
The California Assembly voted 52-19 on Monday in favor of S.B. X1-2—authored by state Sen. Nancy Skinner (D-9)—which will empower the California Energy Commission (CEC) to impose profit caps and penalties on refiners and create an intra-agency watchdog tasked with conducting greater oversight of fossil fuel companies to minimize profiteering.
The new law will allow the CEC to levy daily fines of $5,000-$20,000—up to a maximum of $500,000—if a company does not provide the agency with data to determine if it is complying with the legislation. CEC fines are currently capped at $2,000.
Newsom—who is slated to sign the bill into law at 4:30 pm PT on Tuesday—called Monday "a big day for consumers, a big day for Mother Nature, and a big day in this country."
"I'm very, very pleased as a taxpayer, as a Californian, and as an American," he added. "I hope this is a signal to other states."
The law will take effect 90 days after it's signed by Newsom—who has also called for a windfall profits tax on fossil fuel companies.
"This is a landmark victory for California consumers who will soon have the force of a state watchdog with teeth protecting them from gouging at the gas pump," Consumer Watchdog president Jamie Court said Tuesday.
Kassie Siegel, director of the Center for Biological Diversity's Climate Law Institute, asserted that Monday's vote "shows the tide is turning against Big Oil in California."
"Despite the industry spending millions on lobbying, California is now one step closer to protecting working Californians from the oil industry's greed," Siegel continued. "Whether it's price gouging at the pump or drilling in people's backyards, Big Oil's days of harming our health and our pocketbooks must end."
In a statement, Stop the Oil Profiteering (STOP) spokesperson Jamie Henn said that "California wasn't afraid to stand up to Big Oil. It's time for Washington to follow their lead."
"This landmark legislation will give regulators the tools they need to investigate Big Oil's shady business practices and crack down on the price gouging that fueled last year's obscene profits," Henn added. "The public is clamoring for politicians to take on this reckless industry—it's inspiring to see Gov. Newsom answering the call."
Earlier this month, the watchdog Accountable.US published a report revealing that the biggest oil companies operating in the United States raked in a collective $290 billion in profits last year while they "consistently prioritized shareholder returns over alleviating the pressure of high energy prices."
According to the American Automobile Association, California has the nation's highest gasoline prices, with a gallon of regular unleaded averaging $4.82.
"Five California oil refiners made obscene profits last year from astronomical gasoline prices at the pump, hurting working families up and down the state," Shoshana Wexler of the climate group 350 Bay Area Action said in a statement. "The Legislature has passed a bill that would expose the ways this grand heist was carried out and hopefully ensure it never happens again."
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WATCH LIVE: Big Oil Execs to Face Charges of Price-Gouging at House Hearing
"These executives are exploiting the pandemic and war in Ukraine to pad their bottom lines."
Apr 06, 2022
Top executives from some of the largest and most profitable oil and gas companies are expected to face tough questions Wednesday as they testify before a House subcommittee about price-gouging U.S. consumers even as their companies haul in record-setting profits.
"They should be ashamed."
The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce, chaired by Rep. Diana DeGette (D-Colo.), will begin the hearing at 10:30 am EST as part of an effort to discover any dirty dealings by the energy companies that have been widely accused of exploiting the war in Ukraine and false inflation narratives to jack up energy prices, especially at the gasoline pump.
"Though crude oil prices have fallen from their highs in early March, the price Americans pay at the pump remains elevated," notes a memo put out by the office of Rep. Frank Pallone Jr. (D-N.J.), chair of the Energy and Commerce Committee, ahead of the hearing.
"Persistently high gasoline prices are a financial challenge for many Americans and disproportionately impact lower-earning Americans, who are more likely to spend a greater share of their annual income on gasoline," the memo continues. "Oil companies, on the other hand, are making significant profits, with the six companies testifying at this hearing collectively generating more than $76 billion in profit in 2021."
Watch Live:
The executives testifying at the hearing include David Lawler, chairman and president of BP America; Michael K. Wirth, chairman and CEO of Chevron; Richard E. Muncrief, president and CEO of Devon Energy; Darren W. Woods, CEO of ExxonMobil; Scott D. Sheffield, CEO of Pioneer Natural Resources; and Gretchen Watkins, president Shell USA.
Corporate watchdogs and climate advocacy groups have railed against the oil companies over recent months for attempting to mislead the American public about the reasons for soaring gas prices.
According to briefing documents put out by Greenpeace USA ahead of the testimony, the companies testifying Wednesday are projected to see windfall profits between $28 to $57 billion in 2022 alone.
Kyle Herrig, president of Accountable.US, said in a Wednesday morning statement ahead of the hearing that oil companies are inexcusably ripping off U.S. consumers at a time of booming profits.
"The oil giants testifying at today's hearing raked in an eye-popping $71.2 billion in profits last year, but rather than use that money to lower gas prices for American consumers struggling to fill their tanks, they showered wealthy executives and shareholders with billions in dividends and stock buybacks. They should be ashamed," Herrig said.
"These executives are exploiting the pandemic and war in Ukraine to pad their bottom lines," he continued. "They are gouging consumers at the pump and rigging the system to avoid paying their fair share in drilling royalties on public lands, shortchanging taxpayers, public schools, and critical infrastructure like roads and hospitals."
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