Chevron has failed to comply with California’s new gas pricing law

SACRAMENTO, Calif. (AP) — Chevron has failed to comply with a new California law requiring it to disclose how much money it makes from selling gasoline in the state, setting up a confrontation with state regulators over data that Gov. Gavin Newsom’s administration requested to enforce the first punishing the nation for excessive oil profits.

The law requires oil companies to report their monthly “gross refining margin,” meaning the difference between how much they paid refiners for crude oil and how much the company sold it for as gasoline.

State lawmakers and regulators believe the data will give them a clearer picture of what has led to the sharp increase in California’s gas prices, which are consistently the highest in the nation. The average price for a gallon of gas in California on Tuesday was $4.90, which was $1.44 higher than the national average, according to AAA.

The average price per gallon for gasoline in California hit an all-time high last summer at $6.44 a gallon. That prompted Newsom and state lawmakers to send cash rebates to most drivers and pass a new law requiring oil companies to disclose more data about their prices. Newsom followed that up with a bill in the state Legislature this year to penalize oil companies for making excessive profits, a proposal closely tied to the data that Chevron did not report.

Chevron representatives did not respond to a request for comment.

The deadline for oil companies to report January price data was March 2. Of the five major oil companies that provide 97 percent of the state’s gasoline, four met that deadline: Marathon, PBF Energy, Phillips 66 and Valero, according to the California Energy Commission, which compiles the data.

According to the panel, Chevron submitted only “a small portion of the required data” and objected to reporting anything else. The California-based company accounts for about 30 percent of all gasoline sold in the state, giving it the largest market share. The commission has now given Chevron until the end of Tuesday to comply or face fines of up to $2,000 a day.

In a letter to the California Energy Commission, Chevron attorney Melissa Sladen asked the commission to delay implementation of the law in favor of a lengthy rulemaking process to clarify what data must be reported. Sladden said the data required by law “paints a false picture of actual refinery profit margins by significantly understating refinery costs.”

“Getting the term right is doubly important because it is currently being considered by lawmakers as a measure to impose a refinery tax,” Sladden wrote. “Legislation or regulation based on inaccurate data can lead to unintended consequences, such as reduced investment in gasoline production and higher long-term pump prices.”

The dispute reflects a larger conflict between the oil industry and Newsom, who is just beginning his second term and is considered a possible presidential candidate one day. Newsom has pushed aggressive climate policies, including a ban on drilling new oil wells in homes, schools and public spaces.

But the oil industry is one of the state’s most powerful lobbying groups, donating a lot of money to state legislators’ political campaigns. The industry supports a referendum to lift the ban on drilling oil wells near sensitive sites. And Newsom’s proposal to penalize oil companies for making too much money has so far not made much headway in the state Legislature, with several Democrats raising concerns about it during a public hearing last month.

Chevron’s failure to comply with the new price law could anger some lawmakers enough to sway their votes, said Jamie Court, president of Consumer Watchdog, an advocacy group that is pushing for a sanction on oil profits.

“It’s just a big (refinery) that gives dirt basically to the state,” Cort said. “I don’t think that will bode well when the law goes into effect.”

State Sen. Ben Allen, a Santa Monica Democrat who authored the law requiring oil companies to disclose more data, said there are still some questions about Newsom’s proposal to sanction oil companies’ excessive profits. But he said it was “disappointing” that Chevron didn’t follow the law it wrote.

“The fact that all the other players in the industry have been able to do it and haven’t, I just don’t know what’s going on with them,” Allen said. “We will hold them accountable.”

The Energy Commission has already rejected a request by the Western States Petroleum Association, an oil industry lobby group, to delay implementation of the law requiring more pricing data. The association will ask the commission to reconsider its decision on Tuesday.

Sophie Ellinghouse, the association’s vice president, general counsel and corporate secretary, wrote in a letter to the committee that asking for the profit numbers would generate “burdensome, inaccurate and inconsistent” information.

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