SAN FRANCISCO – California’s powerful fossil fuel industry spent more than $34 million last year to lobby the legislature and state agencies, according to just-released filings with the secretary of state’s office.
The latest lobbying and campaign contribution reports come after a year when oil and gas companies in the state earned record profits while consumers struggled with sky-high gas prices at the pump. The obscene money-making prompted Gov. Gavin Newsom to penalize Big Oil for its record of price gouging Californians.
“Big Oil’s sizable investments in influence peddling last year in Sacramento underscore the existential threat they face in California,” said EWG President and Bay Area resident Ken Cook. “They understand that many politicians, including Gov. Newsom, are advancing an agenda that, if successful, will begin to erode the outrageous profits these companies are making on the backs of consumers.”
The Western States Petroleum Association, or WSPA, one of the two main trade groups representing the fossil fuel industry in Sacramento, alone paid out $1.7 million between October and December 2022, bringing to $11.7 million the eye-popping total the group spent lobbying last year. And the San Ramon–based oil giant Chevron didn’t exactly hold back, doling out $8.6 million in 2022 lobby expenditures.
A political action committee with likely the longest name of any PAC ever – the Coalition to Restore California’s Middle Class, Including Energy Companies Who Produce Gas, Oil, Jobs and Pay Taxes – spent $7 million on political ads and campaign contributions in 2022.
The PAC shelled out more than $100,000 in contributions last year alone to 21 members of the legislature. One state senator got more than $1.2 million in campaign donations.
According to the nonprofit Transparency USA, which tracks the flow of money in state politics, the oil industry PAC received over $8.6 million in 2022 from Chevron, Valero, Phillips 66 and Marathon Petroleum – four of the five California refiners that set retail gas prices for every station in the state
A review of the fossil fuel industry’s lobby disclosure statements shows much of the money was spent opposing Newsom’s proposal to penalize oil companies for their rampant gas price gouging of consumers at the pump. The money also went toward an effort to block the recently enacted state “setback” law which requires that new oil drilling rigs be at least 3,200 feet from schools, homes and hospitals.
For roughly a year, Californians have suffered from exorbitant gas prices driven by oil companies’ seemingly never-ending quest to wring as much profit from them as possible. Last year, at times the average price of a gallon of gas sold in the state had soared to as much as $7, almost twice the national average.
Newsom’s proposal to tackle this problem would cap oil companies’ profit gap – their “maximum gross gasoline refining margin” based on the average monthly earnings an oil refiner makes per barrel on the California wholesale gas market.
Newsom’s proposal was introduced as legislation in December. If enacted, the plan would empower the California Energy Commission to penalize oil refiners that exceed the profit gap limit. Lawmakers could issue refunds to California families by tapping a special fund created by these penalties.
The oil industry was invited to a California Energy Commission hearing in late November to explain its runaway gas prices but refused to attend, claiming a need to protect their confidential business information. The real reason the oil giants ducked the hearing was that they knew there was no way they could justify the soaring price of gas, noted EWG in a Jan. 5 letter to Newsom.
But they are speaking to lawmakers in another way – through their tens of millions spent on lobbying efforts. Bakersfield-based Aera Energy, which produces roughly 25 percent of California’s petroleum and has oil wells throughout Kern County and the San Joaquin Valley, as well as rigs in Ventura and Monterey counties, spent $1,660,000 lobbying Sacramento in opposition to the law.
The California Independent Petroleum Association, or CIPA, the other trade group that lobbies on behalf of the oil industry, is behind the effort to repeal the state’s new oil drilling setback measure. Last year it spent more than $1 million lobbying against the law and another $1 million in political expenditures.
Furious over the ban on Big Oil’s freedom to locate new oil drilling operations in the shadow of classrooms, homes and hospitals, the CIPA launched a statewide drive to gather the signatures needed to get a referendum on the 2024 ballot, so voters can decide whether the law passed by the legislature should be repealed.
The CIPA often used deceptive and deceitful practices to lure unsuspecting residents to sign the petition. But it recently garnered the signatures needed to put the law on hold until the 2024 election, when voters will determine its fate. In the short term, this stay on the law triggered by CIPA’s successful petition drive will allow oil companies to keep adding more oil wells in neighborhoods.
Nearly 5 million Californians live within a mile of an active oil well, according to data published by the coalition Voices in Solidarity Against Oil in Neighborhoods, or VISION.
The latest lobbying expenditure reporting comes as four of the state’s oil refiners – Chevron, Phillips66, Valero and Marathon Petroleum – recently released fourth-quarter earnings reports showing that together they made more than $72 billion in windfall profits in 2022, nearly triple what they made in 2021.
For more on the issue of California’s oil and gas industries’ efforts to rip off working families in the state, visit Consumer Watchdog or EWG's campaign to end Big Oil's price gouging. For more information about the setback law and details about the locations of oil wells in the state, visit VISION
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The Environmental Working Group (EWG) is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action.
