On Friday, Governor Gavin Newsom approved an extensive set of climate and environmental legislation aimed at lowering electricity costs, stabilizing gas prices, and boosting California’s oil sector, which has been facing challenges.
During the signing event at the California Academy of Sciences in San Francisco, Newsom conveyed to state lawmakers and industry representatives from Labor, Business, Climate, and Energy that the legislation is a compromise meant to secure enough affordable gasoline for drivers while transitioning to a clean energy future.
“Everyone acknowledged the significance of this moment and collaborated despite differences, and it wasn’t without its challenges,” Newsom stated.
The legislation includes an extension of the state’s cap-and-trade program, which will now run until 2045, and will be revamped as a cap-and-install initiative to boost California’s climate goals. This involves placing limits on greenhouse gas emissions and permitting large polluters to trade unused emission allowances in Australia.
Officials noted that the new Cap and Insive Program aims to reduce utility bills for California households and small businesses during months of exceptionally high prices. Additionally, $2 billion will be allocated to the state’s high-speed rail project, bumping the total for public transport to $12 billion.
Since 2000, California has reduced its greenhouse gas emissions by 20%, while the state’s GDP has grown by 78%, according to Newsom’s office.
A particularly contentious component of the legislation is SB 237, which permits oil and gas companies to drill up to 2,000 new wells annually in Kern County, a key area for oil production in California. This bill circumvents a long-standing legal battle initiated by environmental groups concerning drilling in counties that contribute about 75% of the state’s crude oil output.
Some environmentalists have mentioned that the bill includes measures that could mitigate emissions, although there are concerns regarding potential increases in fuel prices due to provisions that allow suspension of summer gasoline blend standards.
The legislation was introduced in response to fluctuating gas prices as companies like Valero and Phillips 66 prepare to shut down refineries in the San Francisco Bay area and Los Angeles County’s South Bay.
Environmental advocates regard the bill as a step forward, noting that it comes at a time when the Trump administration and a Republican-led Congress have distanced themselves from clean energy initiatives.
“Washington, D.C. isn’t steering the ship,” remarked Katelyn Roedner Sutter, director of the California Environmental Defense Fund. “Here in California, we are.”
Through AB 825, California is positioning itself to create a Western states electricity market. This bill is aimed at enabling the sharing of solar and wind energy across state borders, allowing California to send surplus solar energy while bringing in wind energy from states like New Mexico and Wyoming.
“Today marks a significant win for the Golden State,” declared Senate Speaker Pro Tempore Mike McGuire (D-Healdsburg). “If you want lower utility bills, today is your day. If you dislike gas price fluctuations, you win. If clean drinking water is important to you, you win. If breathing fresh air matters, you won as well. It’s a big win all around.”
