BILL NUMBER: SB 448 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 3, 2013
AMENDED IN ASSEMBLY AUGUST 5, 2013
AMENDED IN SENATE MAY 24, 2013
AMENDED IN SENATE MAY 6, 2013
AMENDED IN SENATE APRIL 23, 2013
AMENDED IN SENATE APRIL 1, 2013
INTRODUCED BY Senator Leno
(Coauthor: Assembly Member Nazarian)
FEBRUARY 21, 2013
An act to add Sections 25351 and 25356.5 to
Section 25351 to, and to add and repeal Section 25356.5 of,
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 in the Natural 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 requires the
commission to obtain and analyze monthly production reports prepared
by the State Oil and Gas Supervisor under a specific provision.
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.
This bill would , until January 1, 2018, require the
State Energy Resources Conservation and Development Commission, or
the commission, upon appropriation by the Legislature of moneys
generated by the collection of royalty payments from the oil and gas
leases, to identify data currently collected or developed by the
commission and to establish a methodology to analyze whether fuel
price manipulation has occurred or is occurring. The bill
would require the commission to notify the appropriate state or
federal agencies if a probable market manipulation has occurred or is
occurring. The bill would require the commission to
establish a Motor Vehicle Fuel Market Advisory Committee, as
specified, to review specific data and provide ongoing comments,
insight, and recommendations about fuel market behavior and
transactions related to potential market manipulation and methods to
deter those activities. The bill would require the commission,
in consultation with the State Air Resources Board and other relevant
state agencies, to include in its integrated energy policy report a
one-time report on further legislative recommendations to
limit the amount of price volatility and comparative price increase
in the California fuel market.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25351 is added to the Public Resources Code, to
read:
25351. The Legislature finds and declares all of the following:
(a) California is in the process of creating investments in, and
deployment of, lower carbon and more sustainable fuel options for
consumers.
(b) California's transition to a lower carbon and lower cost
transportation fuel mix can be threatened by illegal actions that
manipulate prices and make it difficult to understand the real impact
of new standards and regulations.
(c) It is the intent of the Legislature to implement policies that
protect diversify the state's motor vehicle
fuel mix and reduce its carbon intensity while protecting
consumers against market manipulation in the wholesale markets for
finished gas gasoline and diesel fuel
and their refining feedstocks.
(d) Fully detecting and deterring illegal market price
manipulation for motor vehicle fuels is a complex effort that may be
beyond the existing data collection and analysis capabilities of the
state.
(d)
(e) It is the intent of the Legislature to use existing
resources at the State Energy Resources Conservation and Development
Commission and develop additional expertise to prevent
identify circumstances and segments of the
transportation fuels sector vulnerable to market manipulation
and recommend actions to deter those activities using existing
data, while also understanding the limitations of the data that the
state already collects .
(e)
(f) It is the intent of the Legislature that the
authority under this act be complementary to the authority of other
state and federal agencies.
(f)
(g) It is the intent of the Legislature that the State
Energy Resources Conservation and Development Commission work
and communicate with other state and federal agencies to
identify activities that may indicate market
manipulation and investigate those activities
in markets for wholesale finished gasoline and diesel fuels and
their refining feedstocks .
SEC. 2. Section 25356.5 is added to the Public Resources Code, to
read:
25356.5. (a) In addition to the requirements of Section 25356,
and in consultation with relevant state and federal agencies, the
commission shall do all of the following:
(1) Identify data currently collected or developed by the
commission that is important to determine whether improper fuel price
manipulation has occurred or is occurring. The data may include all
of the following:
(A) Individual fuel producer data and importer and bulk trader
data, including all of the following:
(i) Production or throughput data.
(ii) Emission data or operational data.
(iii) Sales, storage, and transfer volumes.
(iv) Price.
(B) Observed and forecasted wholesale market prices.
(2) Establish an analytical methodology for use in evaluating data
collected by the commission to inform whether fuel price
manipulation has occurred or is occurring. The methodology may, at
the discretion of the commission, be targeted to analyzing data on
transactions and market conditions most likely connected with fuel
pricing manipulation, and may include, but shall not be limited to,
both of the following:
(A) Producer, importer, and bulk trader level analysis.
(B) Marketwide analysis, comparing real time prices to expected
prices based on published forecasts or modeling output.
(3)
(2) Analyze , in an ongoing manner, the data
under paragraph (1) that is in the possession of the commission and
investigate for suspected identify
transportation fuel market segments and circumstances vulnerable to
fuel price manipulation in at
both of the following levels :
(A) Individual business level.
(B) Marketwide producer level, taking into account the actions of
multiple producers.
(4)
(3) Identify data that is not in the
possession of the commission and is considered important to determine
whether fuel pricing manipulation has occurred or is occurring. The
commission shall furnish a list of the data to the Legislature upon
request.
(b) (1) The commission shall establish a Motor Vehicle Fuel Market
Advisory Committee to review the data gathered and analyzed pursuant
to subdivision (a) and to provide ongoing comments, insight, and
recommendations about fuel market behavior and transactions related
to potential market manipulation and methods to deter those
activities.
(2) The committee, pursuant to paragraph (1), shall include at
least five members with relevant professional or academic expertise,
to the extent feasible, in accordance with the following:
(A) A motor vehicle fuel market analyst.
(B) A representative from the wholesale gasoline and diesel fuel
industry.
(C) A representative from the retail gasoline and diesel fuel
industry.
(D) A representative from the alternative fuel industry.
(E) A representative from an environmental, public interest, or
consumer protection organization.
(b)
(c) (1) The commission, in
consultation with the State Air Resources Board and other relevant
state agencies, shall include in as part
of the first feasible integrated energy
policy report pursuant to Section 25302 that is made following
an appropriation pursuant to subdivision (e) of this section ,
a one-time report on further legislative recommendations to
limit the amount of price volatility and comparative price increase
in the California fuel market. The report shall include an evaluation
of strategies for doing all of the following
strategies :
(1)
(A) Increasing storage of fuels produced in the state.
(2)
(B) Leveraging the state's purchasing power related to
the state's motor vehicle fleet.
(3)
(C) Increasing timely imports of motor vehicle
fuels that meet existing fuel specifications, as
established by the State Air Resources Board, during
emergency conditions and rapid price volatility.
(4)
(D) Coordinating the timing of maintenance and shutdown
activities at in-state fuel production facilities.
(E) Identifying circumstances and segments of markets for gasoline
and diesel fuels and their refining feedstocks that are vulnerable
to price changes and potential market manipulation.
(2) The strategies evaluated pursuant to paragraph (1) shall not
do any of the following:
(A) Be outside of the state's jurisdiction.
(B) Cause backsliding or noncompliance with applicable federal,
state, or local laws or regulations, including state air and water
quality requirements, and other requirements for protecting public
health or the environment.
(C) Disproportionately impact disadvantaged communities.
(3) The report pursuant to paragraph (1) shall also include
comments, insights, and recommendations from the Motor Vehicle Fuel
Market Advisory Committee.
(c)
(d) For purposes of this section, "fuel" means finished
gasoline and diesel and their refining feedstocks derived from
petroleum.
(d)
(e) The commission shall implement this section
only upon appropriation by the Legislature of 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.
(e) (1) Upon collection of the data and completion of the
analyses required under this section, if the data indicates that a
probable market manipulation has occurred or is occurring, the
commission shall notify the appropriate state or federal agencies of
the probable market manipulation.
(2)
(f) Nothing in this section shall require the
commission to make final findings or determinations that
market manipulation has occurred or is occurring. do
either of the following:
(1) Make final findings or determinations that market manipulation
has occurred or is occurring.
(2) Release or disclose information deemed to be confidential
under the Petroleum Industry Information Reporting Act of 1980.
(g) Nothing in this section shall prevent the commission from
reporting any information to state or federal agencies pursuant to
existing law.
(h) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.