Gov. Gavin Newsom on Friday signed a sweeping package of climate and environment bills aimed at reducing the cost of electricity, stabilizing gasoline prices and propping up California’s struggling oil industry.
At a bill signing ceremony at the California Academy of Sciences in San Francisco, Newsom told state lawmakers and representatives from labor, business, climate and energy groups that the package was a compromise, designed to push California toward a clean-energy future while still ensuring the state has enough affordable gasoline to meet drivers’ needs.
“Everybody recognized this moment and worked together across their differences, which were not insignificant,” Newsom said.
The bills signed into law include an extension of the state’s nation-leading cap-and-trade program through 2045. The program, rebranded as cap-and-invest, limits greenhouse gas emissions and raises billions for the state’s climate priorities by allowing large polluters to buy and sell their unused emission allowances at quarterly auctions.
The cap-and-invest program should funnel up to $60 billion through 2045 into lowering utility bill costs for California households and small businesses during months when prices spike, officials said. Another $20 billion will go toward the state’s trudging high-speed rail project, and $12 billion to public transit.
California’s greenhouse gas emissions have fallen 20% since 2000, while the state’s gross domestic product increased 78% over the same time period, Newsom’s office said.
The most controversial bill in the package was SB 237, which will allow oil and gas companies to drill up to 2,000 new wells per year through 2036 in Kern County, the heart of California oil country. The bill effectively circumvents a decade of legal challenges by environmental groups seeking to stymie drilling in the county that produces about three-fourths of the state’s crude oil.
Some environmentalists fumed over that trade-off, as well as over a provision that will allow the governor to suspend the state’s summer-blend gasoline fuel standards — which reduce emissions but drive up costs at the pump — if prices spike for more than 30 days or if it seems likely that they will.
That bill was introduced as part of an effort to stabilize volatile gas prices as Valero and Phillips 66 prepare to close refineries in the San Francisco Bay Area and Los Angeles County’s South Bay that represented an estimated 20% of the state’s refining capac ity.
Environmental groups said the bills still represent progress, particularly as the Trump administration and the Republican-led Congress step away from clean energy policy.
“D.C. has not led,” said Katelyn Roedner Sutter, the California state director for the Environmental Defense Fund. “California will.”
Through AB 825, California is also laying the groundwork for an electricity market among Western states. The bill is designed to make it easier to share solar and wind power across state lines, meaning California can export excess solar energy while importing wind energy from gustier places like New Mexico and Wyoming.
“Today is a big win for the Golden State,” said state Senate President Pro Tem Mike McGuire (D-Healdsburg). “If you pay utility bills and you want them lower, you win. If you drive a car and hate gas price spikes, you win. If you want clean drinking water, you win. If you want to breathe clean air, you win today. It’s a pretty big winner’s circle.”
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