A top executive at Chevron says a bill on the verge of heading to Gov. Gavin Newsom’s desk requiring refiners in the state to maintain minimum levels of gasoline reserves has been “driven by misleading rhetoric,” but the head of California’s petroleum oversight board says the industry “has billions of reasons to try to derail this bill.” The verbal jabs come as the California Senate in Sacramento debates Assembly Bill X2-1 that supporters say will help reduce price spikes at the pump that have dogged motorists in the Golden State while opponents say it could lead to supply shortages that will make things worse. Newsom backs the bill and called for both chambers in Sacramento to meet in special session. AB X2-1 passed the Assembly on Oct. 1 in a 44-17 vote and is going through debate in the Senate this week. A Senate floor vote may come on Friday. The bill would require refiners to maintain minimum amounts of gasoline inventory that would be determined, the bill’s supporters said, by a commission of experts that would include input from key stakeholders such as the oil industry and labor unions. In the version passed in the Assembly, refiners who do not comply to the minimum storage requirements would face penalties of at least $100,000 to a maximum of $1 million per day. If signed into law, the legislation would be the first of its kind in the U.S. On Tuesday, Chevron sent a letter to the chairs of the respective Assembly and Senate committees on fuel supplies and price spikes to address what the company said are “some of the inaccurate and flawed arguments” made by supporters of AB X2-1. Andy Walz, president of Downstream, Midstream and Chemicals at Chevron, said the “political posturing that has characterized these proceedings must stop, including baseless and frankly ridiculous claims that the industry is engaging in price gouging.” Walz blamed any supply shortages in California on “20 years of bad policy” decisions by the state and disputed that refiners manipulate gasoline inventory to generate more profit. Enforcing a minimum inventory mandate, Walz wrote, ignores potential constraints in fuel capacity as California refiners switch from winter to summer blended fuel and those constraints may reduce the amount of storage available during months when demand is high. California’s summer blend is less polluting but more expensive to make. The bill takes “significant supply” off the market that refiners would otherwise sell, driving up wholesale prices, Walz said. He also alluded to a letter the governors of Arizona and Nevada sent last month to Newsom expressing concerns the legislation may lead to price increases in their states because Arizona and Nevada rely on California pipelines for fuel. “Voters will hear about how you’ve made the state ‘uninvestable’ by reducing refiners’ incentive to invest the annual capital needed to maintain the fuel production capacity needed” in California, Arizona and Nevada, Walz said. Asked by the Union-Tribune to react to Chevron’s letter, the director of the recently created Division of Petroleum Market Oversight fired back. “It is disappointing that Chevron is ramping up the rhetoric instead of participating in fact-finding during the legislative process,” Tai Milder said in an email, adding that the committee chairs “gave industry every opportunity to present data and offer solutions, but they simply didn’t.” The bill’s supporters say that during the gasoline price spikes in 2022 and 2023, California drivers paid as much as $2.61 per gallon more than the rest of the country while state taxes and environmental fees were stable. Related Articles Energy | Did you buy gasoline in SoCal in 2015? You may be eligible to receive a payment Energy | Bill requiring minimum gasoline storage levels in California passes Assembly Energy | You’re going to get a $78 deduction on your SDG&E bill this month Energy | Here’s how much it costs to use the new hyper-fast EV chargers at Fashion Valley mall Energy | Levin introduces bill aimed at moving nuclear waste out of San Onofre — and other sites across the country “Chevon can’t dispute the data,” Milder said, adding that “price spikes are profit spikes, pure and simple.” While it’s correct to say that prices go up when demand outstrips supply, Milder said Chevron and three other firms control most of the supply, so providing a buffer will help avoid fuel shortages. “Thanks to new data and analysis, we know the real story,” Milder said. “Refiners let supplies dwindle over the summer, reduce output through maintenance, and sell at inflated prices.” The bill’s supporters say AB X2-1 will save California consumers billions and Milder said efforts to defeat the bill are “a transparent tactic” to preserve the status quo. “But on behalf of California consumers — and consumers in Arizona and Nevada — it’s time to say enough is enough.” California drivers pay more for gas than any other motorists in the country. The average price for a gallon of regular Thursday stood at $4.67, according to AAA. The national average came to $3.212, a difference of almost $1.46 a gallon. The average price in San Diego on Thursday was $4.666.