SACRAMENTO, CALIFORNIA (AP) – It was just a few weeks ago that Californian Governor Gavin Newsom called the oil industry the second most powerful force on earth, trailing only Mother Nature in its ability to bend the elements, both physical and political, to its will.
Yet on Tuesday, Newsom signed a new law that gives state regulators the power to penalise oil companies for making too much money, the first of its kind in the country.
It’s the type of legislation the oil industry might have crushed in the past. But on Monday, the bill cleared the state Assembly with only one Democrat voting against it. “We proved we could finally beat big oil,” Newsom said on Tuesday after signing the bill.
The bill is the latest in a string of defeats for the oil industry in California, a state many don’t think of as a fossil fuel powerhouse. But for decades, California was one of the leading oil producers in the United States with a bustling industry that was a key part of the state’s economy. The state is now the nation’s seventh-largest oil producer, according to federal data.
The oil industry doesn’t mind a David vs Goliath comparison “as long as you think we’re David and not Goliath,” spokesperson for the Western States Petroleum Association Kevin Slagle, said about the industry’s influence at the state Capitol. “Just look at the results the last couple of years on legislation.”
Oil production has been steadily declining since the late 1980s from a combination of exhausting supplies and the state’s changing policy priorities.
A state law requires California to be carbon neutral by 2045, meaning the state would remove as many carbon emissions from the atmosphere as it emits.
The state’s plan to do so would reduce demand for liquid petroleum by 94 per cent by 2045.
State regulators have banned the sale of most new gas-powered cars in California by 2035.
And last year, the state Legislature approved a bill limiting where new oil wells can be drilled, providing buffer zones around homes, schools and other sensitive sites.
“We’re never going to get it right, in terms of this transition (away from oil), unless we minimise and mitigate the power and influence of big oil in this country,” said Newsom, now in his second term in office and widely seen as a potential presidential candidate beyond 2024.
