SAN FRANCISCO — Gov. Gavin Newsom signed a sweeping package of bills on Friday to boost oil drilling, rescue wildfire-threatened utilities and extend the state’s landmark climate program as he attempts to rein in energy costs while meeting the state’s ambitious climate targets.
Taken broadly, the package represents a compromise between increasing fossil fuel extraction — which has been on the decline in the nation’s eighth-largest oil-producing state — and continuing to ratchet down greenhouse gas emissions.
“We’ve got to manifest our ideals and our goals, and so this lays it out, but it lays it out without laying tracks over folks,” Newsom said, against a backdrop of towering redwood trees projected on the screen of a planetarium in a San Francisco science museum. “We set the tone and pace for the rest of the nation.”
State Democrats opened their legislative session in January with a promise to focus on affordability, which gained even more political urgency as wildfires and refinery closures raised the threat of higher electricity and gasoline costs. The final package of legislation came together only last week, in a last-minute agreement capping weeks of talks between state lawmakers and Newsom’s office.
And it reflects bipartisan support in California’s overwhelmingly Democratic Legislature, which needed no Republican votes to pass the package. Two of the bills — the creation of a West-wide energy market and the increase in drilling in Kern County, the state’s main oil patch, garnered Republican votes.
“I want to thank the governor for being willing to listen and to understand the situation that we have before us, and his courage to act immediately to stabilize fuel prices for all Californians,” Republican Sen. Shannon Grove, who represents Kern County, said on the Senate floor last week.
The oil drilling package also ratchets up oversight on offshore drilling, a nod to the priorities of soon-to-be Senate President Pro Tem Monique Limón and Central California lawmakers fighting to slow down a Texas-based company that’s moving to quickly restart a Santa Barbara pipeline that spilled in 2015.
Newsom himself only came out in support of extending the state’s cap-and-invest program, which wasn’t scheduled to expire until 2030, after President Donald Trump threatened to dismantle state climate laws in April. The renewal of the carbon market gives him a climate win at a time when the state is losing other core pieces of its climate strategy, like its mandated phase-out of new gas-powered cars by 2035.
The package also includes a spending plan for roughly $4 billion in annual cap-and-invest revenues — known as the Greenhouse Gas Reduction Fund. That plan includes $1 billion in guaranteed yearly funding for high-speed rail, a significant win for a controversial project that saw the Trump administration cancel $4 billion in federal grants earlier this year.
The utilities’ wildfire fund will now benefit from an $18 billion boost, funded by utility company shareholders and ratepayers. The new energy legislation also changes how investor-owned utilities finance transmission and wildfire prevention projects, which lawmakers and Newsom are arguing will shave up to several dollars off monthly electric bills.
Newsom claimed the most energy savings would come from the law that paves the way for California to more closely link with its neighboring states in a West-wide energy market.
A separate law will also strengthen air quality monitoring in communities disproportionately impacted by pollution.
A who’s who of California’s energy leaders attended the signing, including legislative leadership, top regulators and high-profile advocates. Newsom’s allies cast the signing as a repudiation of the Trump administration’s attacks on clean energy.
“D.C. has not led; California will,” said Katelyn Roedner Sutter, California director for the Environmental Defense Fund, who was the event’s first speaker. “As our nation blocks clean energy progress, digs in on failed policies fueling higher prices and the climate crisis, we are doubling down on collaboration to bolster climate action, sustain climate action, and increase access to cheaper, cleaner energy.”