Newsom Vetoes Bill to Consult Labor in Refinery Turnaround and Maintenance Regulations

Governor Gavin Newsom vetoed SB 842, which would have changed the requirements on the California Energy Commission’s (CEC) development of regulations governing oil and gasoline refinery turnaround and maintenance. These regulations were established under SBX1-2, which gave the CEC new powers to monitor the gasoline market and impose penalties on refiners who charge more than a maximum margin for refining gasoline.

Newsom, in his veto statement, said SB X1-2 already provides several employee safeguards and said it “would be imprudent to sign this bill so soon after the effective date of SB X 1-2 and before the CEC has fully contemplated implementation of the refinery maintenance portions of that law.” Newsom stated that the bill “could create a barrier to the CEC 's ability to protect consumers from unnecessary gasoline price spikes caused by interruptions in petroleum supply.”

The bill had three main requirements:

• It would have required the CEC to consult with the Department of Industrial Relations in considering ways to manage necessary refinery turnarounds and maintenance. (SBX1-2 required consultation with the Labor and Workforce Development Agency, but it did not require consultation with the Department of Industrial Relations.)

• It would also have clarified that the CEC must consult with labor and industry stakeholders for any adopted regulations regarding scheduling or rescheduling maintenance. It would have required the CEC to aim to avoid adverse impacts to the safety of employees and surrounding communities, labor and equipment availability, other market impacts, and cost.

• The law would also have specified that no CEC regulations or action may excuse compliance with the workforce and wage requirements of stationary sources in existing law.

Labor and oil lobbies supported the bill. The oil industry argued that allowing regulations to determine when refiners perform maintenance could threaten worker safety. Opponents argued that the law was an attempt to weaken the regulations were established under SBX1-2.