California’s Governor, Gavin Newsom, has taken a groundbreaking step towards penalizing oil companies that make too much profit. He recently signed into law a bill that empowers state regulators to clamp down on such companies. This law is the first of its kind in the United States and is part of a series of measures that have dealt a series of blows to the oil industry in California.
For decades, California was one of the country’s leading oil producers, with a thriving industry that was a key part of its economy. However, since the late 1980s, the industry has been in decline, with supplies dwindling and changing policy priorities.
In 2018, California passed a law requiring it to be carbon neutral by 2045. This ambitious goal would reduce the demand for liquid petroleum by a staggering 94%, which would further weaken the oil industry in the state. State regulators have also banned the sale of most new gas-powered cars by 2035, which is yet another blow to the industry.
Despite its declining fortunes, the oil industry in California is not giving up without a fight. In 2022, the industry spent millions on campaign contributions to both Democrats and Republicans, hoping to influence favorable votes. However, these donations did not always translate into political support, as shown by the new law that Governor Newsom has signed.
The oil industry has been particularly upset about a new state law that bans drilling for new oil wells near homes, schools, and other sensitive areas. This law has sparked a lot of controversy, and voters will decide in 2024 whether to uphold it.
With this new law in place, California’s regulators now have the power to penalize oil companies that make too much profit. This is a significant development, and it remains to be seen how it will impact the oil industry in California. However, it is clear that the state is serious about reducing its dependence on fossil fuels and is taking bold steps to achieve this goal.
