California Gov. Gavin Newsom signed legislation on Tuesday, the first of its kind in the U.S., that could set limits on oil companies’ profit margins. The law, passed by the state legislature just the day before, empowers the state Energy Commission to review and cap refiners’ profit margins (revenue, minus fuel production costs) and impose penalties for exceeding that limit. “Three times in the last decade, the oil refining margin went over 50 cents per gallon … and two of them were in the last year alone,” Democratic Assemblymember Alex Lee said during Monday’s floor debate.
Newsom dismissed threats of industry retaliation over the new oil profits law. “What are they going to do? Spend some of their billions of dollars, try to go after us, try to demean us, try to lie to you, try to manipulate,” he told reporters. “That’s status quo here. Give me a break. I’m just sick and tired of those guys.” (Newsom signing: Cal Matters, The Hill, KCRA Sacramento, Courthouse News, Axios, CNN; Legislative passage: E&E $, Los Angeles Times, The Hill, AP, San Francisco Chronicle, Bloomberg $)