Tag Archives: California Governor Gavin Newsom

CA Gov. Gavin Newsom, California, Chevron, Climate action, Climate Change, ExxonMobil, Fossil fuels, Oil drilling

Shots fired: California sues oil companies

California goes on offense against Big Oil

The lawsuit makes California the largest economy to join the campaign against oil companies. | Ben Margot / AP Photo.

California is one of the country’s top oil and gas producers, and Chevron, one of the defendants, is headquartered in the state.

Politico, by Blanca Begert and Debra Kahn, September 16, 2023

Democratic California Gov. Gavin Newsom announced a lawsuit Saturday against five major oil companies and their subsidiaries, seeking compensation for damages caused by climate change.

The suit, filed in San Francisco County Superior Court by Democratic Attorney General Rob Bonta, accuses the companies of knowing about the link between fossil fuels and catastrophic climate change for decades but suppressing and spreading disinformation on the topic to delay climate action. The New York Times first reported the case Friday.

The suit also claims that Exxon, Shell, Chevron, ConocoPhillips and BP — as well as the American Petroleum Institute industry trade group — have continued their deception to today, promoting themselves as “green” with small investments in alternative fuels, while primarily investing in fossil fuel products.

It seeks to create a fund that oil companies would pay into to help the state recover from extreme weather events and prepare for further effects of climate change. It argues that California has already spent tens of billions of dollars on responding to climate change, with costs expected to rise significantly.

“The companies that have polluted our air, choked our skies with smoke, wreaked havoc on our water cycle, and contaminated our lands must be made to mitigate the harms they have brought upon the State,” the suit says.

Shell and API said the question of how to address climate change should be dealt with in the policy arena.

“We do not believe the courtroom is the right venue to address climate change, but that smart policy from government and action from all sectors is the appropriate way to reach solutions and drive progress,” Shell spokesperson Anna Arata said in an email.

“This ongoing, coordinated campaign to wage meritless, politicized lawsuits against a foundational American industry and its workers is nothing more than a distraction from important national conversations and an enormous waste of California taxpayer resources,” API Senior Vice President and General Counsel Ryan Meyers said in a statement. “Climate policy is for Congress to debate and decide, not the court system.”

California’s legal action joins dozens of similar lawsuits brought by seven other states and many municipalities seeking to hold major polluters accountable for allegedly lying about their role in causing climate change.

Eight California local governments filed some of the country’s first climate lawsuits in 2017 and 2018 that are now in state courts. At’s filing makes California the largest economy to join the campaign against oil companies. California is also one of the country’s top oil and gas producers, and Chevron, one of the defendants, is headquartered in the state.

A spokesperson for Newsom said the timing was motivated in part by the Supreme Court’s decision in April to allow existing suits from local governments to proceed in state court, rather than be moved to federal courts as oil companies wanted. State courts are seen as friendlier venues for plaintiffs seeking climate damages because they’re generally more receptive to considering state laws that deal with climate change.

“All these cases got tied up in years of procedural wrangling; oil companies doing everything they could to drag their feet,” said spokesperson Alex Stack. The “Supreme Court finally let these cases go forward this spring — the state as a whole is joining cities and counties.”

California officials have been contemplating legal action against oil companies for years, since at least the early 2010s, when former Democratic Gov. Jerry Brown was serving as California attorney general. The state did sue coal companies and automakers before that, alleging public nuisance harms stemming from climate change, but the Supreme Court rejected the arguments.

The links between oil companies and efforts to downplay the effects of climate change have become clearer since then, a former top California legal official said.

“At that time there was less information about the ongoing and continuing efforts by oil companies to mislead and misrepresent on the record,” said Ken Alex, a former senior assistant attorney general under Brown who led the office’s environmental section. “I don’t think we had the same level of information that they have now about that conduct.”

The evidence has continued to pile up. A study published this year from Harvard University and the University of Potsdam in Germany found that Exxon’s climate models from 40 years ago were spot on.

California joining the legal parade against oil companies could prove significant.

“Having California participate is a big deal,” Alex said. “These are difficult cases. They have five defendants who have endless resources; it’s not simple to prove what they need to prove in terms of misrepresentation.”

Climate action, Climate Change, Oil drilling

Opinion: Three practical things Newsom can do to keep Big Oil in check

[BenIndy Contributor Kathy Kerridge – Californians like to think of themselves as climate forward, and Governor Gavin Newsom certainly projects that image. However, there is often a gap between rhetoric and action. Last year, as part of the governor’s climate proposals, the legislature enacted setbacks so oil drilling — with all its health risks — could not happen in your backyard, next to your child’s school or near health facilities. The oil industry then qualified an initiative to overturn that effort (often positioning their bill as “pro-setback” to the people who signed) and CalGEM has continued busily granting permits for drilling in within setback zones. So why doesn’t Newsom back up his rhetoric? This op-ed from the director of Sierra Club California, published by the LA Times, does a good job of explaining how Gov. Newsom might turn rhetoric into action. – K.K.] 

Opinion: If Gavin Newsom really wanted to go after Big Oil, here’s what he would do

An oil rig silhouetted by a golden sunset.
Director of Sierra Club CA Brendan Dawson: “If Newsom wants to live up to his reputation as a champion for the climate and an opponent of Big Oil, he must do more than just promise to protect our environment and health.”

By Brendan Dawson, first published in the LA Times on April 7, 2023.

California politicians promise to protect the environment a lot more than they actually do. For environmental advocates like me, reconciling a politician’s public statements on environmental issues with their actions doesn’t take much time: Simply put, there is no reconciling them.

Gov. Gavin Newsom’s stance on oil and gas is no exception. Late last year, the governor called for a special legislative session to hold oil and gas companies accountable for gouging California consumers when gasoline prices spiked last fall by imposing a penalty on excess profits. The bill that came out of the session in March fell short of the governor’s goals, settling for requiring more industry transparency.

Environmental groups, including Sierra Club California, nevertheless supported the measure as a step toward regulating an industry that was hurting the working class and overheating the planet at the same time. Newsom himself announced “a new sheriff in town” and claimed to have “brought Big Oil to their knees.”

And yet his administration continues to capitulate to the oil industry in other important ways. Newsom’s public determination to take on this industry differs significantly from what goes on behind closed doors.

For instance, after the fossil fuel industry used the state’s referendum process to stall a critical law banning new or reworked oil and gas wells within 3,200 feet of homes, schools, parks and healthcare facilities, the governor decried the move. He said in a statement that he was proud to have signed the setback measure, Senate Bill 1137, “to stop new oil drilling in our neighborhoods and protect California families.”

Since Newsom’s statement, however, his administration’s oil agency, the California Geologic Energy Management Division, or CalGEM, has approved hundreds of permits to rework existing oil and gas wells and continue dangerous operations within setback zones. CalGEM has approved a total of 897 permits since the beginning of the year, 62% of which are within the zones that would be protected by SB 1137.

Reworking of existing wells is a significant source of pollution that puts communities at elevated risk of asthma, cancer and other illnesses. Environmental justice advocates fought for decades to secure setbacks from these operations, only to see CalGEM continue to rubber-stamp permits while the governor stood by.

Newsom is obviously aware of the fossil fuel industry’s repercussions for California communities and the environment. Other departments in his administration have taken steps to advance clean air, and Newsom publicly champions them. But CalGEM, the agency charged with “protecting public health, safety, and the environment in its oversight of the oil, natural gas, and geothermal industries,” clearly missed the memo.

The United Nations’ Intergovernmental Panel on Climate Change, in the recently released final part of its sixth assessment of the global climate, calls for cutting two-thirds of global carbon pollution by 2035 and ending reliance on oil and gas by 2040. In the report, U.N. Secretary General António Guterres says we must “massively fast-track climate efforts by every country and every sector and on every timeframe. Our world needs climate action on all fronts: everything, everywhere, all at once.” For California to do our part to meet these demands, Newsom must align his administration’s actions with his public statements.

There are a few more concrete steps Newsom can take toward that end. First, he can direct CalGEM to stop issuing new and rework permits, prioritizing the rescinding of permits within the setback zone that would be established by SB 1137.

He should also organize a government-wide effort to plan California’s transition from oil and gas to clean, renewable energy. This transition must consider the needs of the communities that will be most affected by the transition, especially those that consist of predominantly low-income households and people of color.

Finally, he must hold the oil industry accountable for cleaning up abandoned oil wells. Thousands of wells across the state have been abandoned by the industry, and the often exorbitant cleanup costs are wrongly falling on California taxpayers. CalGEM recently spent more than $34 million in taxpayer money to clean up 171 oil wells in Santa Barbara’s Cat Canyon alone.

These steps are practical and immediately achievable. If Newsom wants to live up to his reputation as a champion for the climate and an opponent of Big Oil, he must do more than just promise to protect our environment and health.

Brandon Dawson is the director of Sierra Club California.

CA Gov. Gavin Newsom, Gasoline prices, Price gouging, Valero

Valero raked in $11.5 billion in 2022 profits, beating its $930 million for the previous year by a dozen times.

Valero 2022 Profits Skyrocket But Gas Pump Gouging In CA Moderates As CA Threatens Refiner Penalty

Consumer Watchdog, by Liza Tucker, 01/26/2023

Los Angeles, CA—Valero raked in $11.5 billion in 2022 profits, beating its $930 million for the previous year by a dozen times. However, Governor Newsom’s call for a special session in October to deal with price gouging appears to be having an impact on gouging in California as California-reported refinery margins were lower than any other region for the first time this year and in line with historic margins.

“Valero reported profits per gallon of gasoline in California during the fourth quarter at below 50 cents, a red line marker for price gouging,” said Consumer Watchdog Liza Tucker. “It reported per gallon profits off California gas at 36 cents, a reasonable profit in line with what the refiner earned here for the last 20 years. Meanwhile margins elsewhere remained high.

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“The threat of a legislative penalty on gasoline price gouging that Governor Newsom called for appears to be reining in gas prices in California already,” said Tucker. “Clearly, California lawmakers should enact that penalty.”

Consumer Watchdog has called for 50 cents as a demarcation line on profits per gallon above which refiners will pay a penalty. SBX 1 2, introduced by Senator Nancy Skinner (D-Berkeley) will set a penalty on California refiners when gas prices and the profits refiners make per gallon off consumers become abnormally high. The legislature has yet to set a profit level for the penalty.

Five refiners control California’s gasoline market by making 97% of the state’s gasoline. They usually report higher profit margins per gallon of gasoline for the US West Coast than any other region in which they operate, said Tucker.  Valero’s 4th quarter profits were the first indication the price gouging penalty has impacted the companies’ policies. In addition, November and December gasoline prices in California were more in line with the typical spread between average US and California prices of a little more than a dollar.

“Just raising the price gouging penalty has significantly curbed Valero’s profit taking in California and made gasoline more affordable for Californians and in particular the most vulnerable in the state who were paying as much as 20% of their after-tax income for gasoline,” said Jamie Court, President of Consumer Watchdog. “Imagine how much Californians will save once a penalty is enacted.”

Valero tripled its fourth quarter profits to $3.1 billion from $1 billion. But Valero reported West Coast refining margins per barrel—the difference between what crude oil costs a refiner compared to the wholesale charge for the finished product—that were the lowest among its regions of operation.  Since Valero only has Western refineries in California, the margins are California-specific.

Valero reported a margin of $15.43 for the West Coast, compared to $18.88 for the US Mid-Continent, $22.68 for the Gulf Coast, and $29.66 for the North Atlantic. Consumer Watchdog divides margin per barrel numbers to arrive at a per gallon profit.  That translated into a profit of 36 cents per gallon in California, 44 cents in the US Mid-Continent region, 54 cents on the Gulf Coast, and 70 cents in the North Atlantic.

In contrast, Valero bagged price gouging profits per gallon in the second and third quarters of 2022. In the second quarter of 2022, Valero reported an 83 cent per gallon profit at the pump and, in the third quarter, a 60 cent per gallon profit in the third quarter, according to Consumer Watchdog research. See refiner profit per gallon chart here.

According to Gary Simmons, Valero’s executive vice president, profits were buoyed by a continued tight market for crude. Simmons said that bad weather also interfered with the restocking that normally occurs at this time of the year. “That sets up the year nicely from the refinery margin perspective,” he said.

As it was, California’s big five oil refiners posted overall profits of $67.6 billion in the first nine months of 2022 – nearly quadruple the profits recorded for the same period in 2021. Chevron reports its fourth quarter and annual earnings tomorrow. It controls 30% of California’s gasoline market.

Big Oil, Valero, Windfall profits

Governor Newsom Convenes Special Session to Hold Oil Industry Accountable for Price Gouging

Valero’s $2.82 billion in profits were 500% higher than the year before.

Newsroom, Office of Governor Gavin Newsom, Nov 30, 2022

SACRAMENTO – As oil companies continue to evade questions about unexplained gas price increases, Governor Gavin Newsom today convened a special session of the California Legislature on December 5 to pass a price gouging penalty on oil companies that will keep money in Californians’ pockets.

The Governor’s action comes on the heels of a state hearing  yesterday – which five major oil refiners refused to attend – to investigate this fall’s unprecedented spike in gasoline prices. This spike in gasoline prices resulted in record refiner profits of $63 billion in just 90 days, disproportionately affecting low- and middle-income families.

“Big oil is ripping Californians off, and the deafening silence from the industry yesterday is the latest proof that a price gouging penalty is needed to hold them accountable for profiteering at the expense of California families,” said Governor Newsom. “I’m calling a special session of the Legislature to do just that, and to increase transparency on pricing and protect Californians from outrageous price spikes in the future.”

Governor Newsom signs proclamation convening a special session to pass price gouging penalty on oil companies

This fall’s spike occurred while crude oil prices dropped, state taxes and fees remained unchanged and gas prices did not increase outside the western U.S., so the high prices went straight to the industry’s bottom line.

The text of the Governor’s proclamation convening a special session can be found here.

During the special session, the Legislature will also consider efforts to empower state agencies to more closely review gas costs, profits and pricing as well provide the state with greater regulatory oversight of the refining, distribution and retailing segments of the gasoline market in California.

Taking action to lower prices at the pump, Governor Newsom in September ordered the switch to winter-blend gasoline and demanded accountability from oil companies and refiners that do business in California. Since California’s record-high gas prices of $6.42, the Governor’s actions have reduced those prices to $4.95 most recently – a decrease of $1.47 since the peak.

In the third quarter of 2022, from July to September, oil companies reported record high profits:

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