Amended in Senate April 1, 2013

Senate Bill No. 448

Introduced by Senator Leno

February 21, 2013

An act to begin delete amend Section 25357 of end delete begin insert add Section 25367 to end insert the Public Resources Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

SB 448, as amended, Leno. Energy: petroleum supply and pricing.

Existing law establishes the State Energy Resources Conservation and Development Commission begin delete (commission) end delete in the begin insert Natural end insert Resources Agency, and specifies the powers and duties of the commission with respect to energy resources in the state. Under existing law, various provisions regulate petroleum supply and pricing. Existing law begin delete further end delete requires the commission to obtain and analyze monthly production reports prepared by the State Oil and Gas Supervisor under a specific provision. begin insert Existing law authorizes the State Lands Commission to enter into oil and gas leases for the extraction and removal of oil and gas deposits on state lands. Existing law requires the leases to include a royalty provision. end insert

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This bill would make a technical, nonsubstantive change to this latter provision.

end delete begin insert

This bill would, upon appropriation by the Legislature from moneys generated by the collection of royalty payments from the oil and gas leases, establish the Office of Price Investigation and Manipulation Prevention in the State Energy Resources Conservation and Development Commission and would require the office to identify fuel price manipulation, establish a methodology to determine whether fuel price manipulation is occurring, and analyze data and investigate for suspected fuel price manipulation. The bill would require the office, in consultation with the State Air Resources Board and other relevant state agencies, to prepare and submit to the Legislature a report on further legislative recommendations to limit the amount of price volatility and comparative price increase in the California transportation fuel market.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 25367 is added to the end insert begin insert Public Resources
Code end insert begin insert , to read: end insert

begin insert

begin insert 25367. end insert   

(a) The Office of Price Investigation and Manipulation
Prevention is hereby established in the commission.

(b) The office shall do all of the following:

(1) Establish a definition for transportation fuel market
manipulation.

(2) Identify data necessary to determine whether fuel pricing
manipulation is occurring that includes all of the following:

(A) Individual fuel producer data, including all of the following:

(i) Production or throughput data.

(ii) Emission data or operational data.

(iii) Sales volumes.

(iv) Price.

(B) Marketwide pricing data.

(3) Establish an analytical methodology necessary to evaluate
whether fuel price manipulation is occurring that includes both
of the following:

(A) Producer level analysis.

(B) Marketwide analysis, comparing real time prices to expected
prices based on modeling output.

(4) Analyze the data and investigate for suspected fuel price
manipulation using both of the following:

(A) Producer level analysis.

(B) Marketwide analysis.

(c) The office, in consultation with the State Air Resources Board
and other relevant state agencies, shall prepare and submit to the
Legislature, pursuant to Section 9795 of the Government Code, a
report on further legislative recommendations to limit the amount
of price volatility and comparative price increase in the California
transportation fuel market. The report shall include an evaluation
of strategies doing all of the following:

(1) Increasing fuel diversification.

(2) Reducing overall demand of gasoline and diesel.

(3) Increasing fuel storage.

(4) Leveraging the state’s purchasing power related to the
state’s fleet.

(5) Increasing timely imports of fuels during price swings.

(d) Upon appropriation by the Legislature from moneys
generated by the collection of royalty payments from oil and gas
leases entered into pursuant to Article 2 (commencing with Section
6826) of Chapter 3 of Part 2 of Division 6, the commission shall
implement this section.

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begin delete

SECTION 1.  

Section 25357 of the Public Resources Code is
amended to read:

25357.  

The commission shall obtain and analyze monthly
production reports prepared by the State Oil and Gas Supervisor
under Section 3227.

end delete