California Governor Newsom signs climate package designed to reduce gasoline and utility expenses
California Strikes Balance Between Clean Energy and Affordable Gasoline in the United States
California, a significant state in the United States, has taken a substantial step towards a clean-energy future while ensuring affordable gasoline prices with a recently signed climate and energy package. The package, which includes the extension of the cap-and-trade program through 2045, rebranded as cap-and-invest, was announced by California lawmakers.
The cap-and-invest program is expected to funnel up to $60 billion into lowering utility bill costs for California households and small businesses during months when prices spike. Additionally, another $20 billion from the program will go towards the United States' high-speed rail project, and $12 billion to public transit.
Assembly Bill 825, brought into law by California Assemblymembers Cottie Petrie-Norris (D-Irvine), Robert Rivas (D-Salinas), and Senator Josh Becker (D-Menlo Park), establishes the legal foundation for a multi-state western energy market. This market will facilitate easier solar energy sharing across states, making it possible for California to export excess solar energy while importing wind energy from gustier places like New Mexico and Wyoming.
The package is a compromise designed to push California towards a clean-energy future while ensuring affordable gasoline. Kern County, the heart of California oil country and producer of about three-fourths of the state's crude oil, will see an expansion of oil production under Senate Bill 237. This bill allows oil and gas companies to drill up to 2,000 new wells per year through 2036 in Kern County.
However, the bills also restrict offshore drilling, a move that has been welcomed by environmental groups. Valero and Phillips 66 are preparing to close refineries in the San Francisco Bay Area and Los Angeles County's South Bay, which represented an estimated 20% of California's refining capacity.
The climate and energy package is seen as a bold step towards reducing electricity costs and stabilizing gasoline prices in the United States. Gov. Gavin Newsom signed the package, with State Senate President Pro Tem Mike McGuire (D-Healdsburg) stating, "Today is a big win for the Golden State."
Katelyn Roedner Sutter, the California state director for the Environmental Defense Fund, commented, "D.C. has not led. California will." The bills are seen as a significant step forward in California's commitment to clean energy, particularly as the Trump administration and the Republican-led Congress step away from clean-energy policy.
Environmental groups argue that the bills still represent progress, despite the expansion of oil production in the Central Valley. They view this as a necessary compromise to ensure a smooth transition to a clean-energy future. California's greenhouse gas emissions have fallen 20% since 2000, while the state's gross domestic product increased 78% over the same time period, demonstrating the economic viability of clean energy.
The bill also includes provisions to address gas price volatility. It allows the governor to suspend summer-blend gasoline fuel standards if prices spike for more than 30 days or if it seems likely they will. This move is aimed at staving off gas price volatility while expanding California's commitment to clean energy in the United States.
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