A major oil industry group has pushed back against a California congressman who proposed a bill to tax fuel producers, instead encouraging state Democrats to “stand up” against Governor Gavin Newsom’s crippling green tax policies.
Democratic Rep. Ro Khanna shared a video referencing “Trump’s immoral and reckless war in Iran” as the reason for surging California gas prices. He also urged the passage of his proposed windfall profits tax on oil companies “to give Americans a rebate for their gas bills.”
In a lengthy retort, the US Oil & Gas Association argued the legislation would do nothing to lower prices, saying Californians should “stand up” against Governor Gavin Newsom’s crippling green tax policies.
“Stand up to your Governor. You know he is wrong and you can be on the right side of things,” the association said Saturday in the long-winded X post, adding that state-level taxes need to be suspended first in order to bring California prices in line with the national average.
While Khanna blamed President Donald Trump for pain at the pump, the association pointed to the state’s taxes — plus environmental regulations like cap-and-trade, low carbon fuel standard, unique reformulated gasoline, refinery limits and geographic isolation — for adding “$1.00-$1.78+ over the US average” to the price of a gallon of gas.
“Put your state bureaucracy on a diet. They could stand to shed a few pounds,” the association’s post continued. “Encourage California domestic oil and gas production and expand your refinery capacity instead of shutting it down.”
Over the weekend, Khanna called for the end of the war in Iran and a stop to the exportation of US crude oil, while urging Congress to pass his profits tax bill.
The idea behind the Big Oil Windfall Profits Tax act, which was reintroduced by Khanna and Democratic Sen. Sheldon Whitehouse, is to prevent large oil companies from raking in profits when oil prices spike, and send Americans money from taxing the extra profits.
“The tax only applies to 50% of the price per barrel compared to the average last year and is levied against only the largest 30% of companies,” Khanna said in social media post on Sunday. “Under my bill, producers have more incentive to invest to increase supply, not just profiteer. The tax bill decreases as producers bring prices down through increasing supply.”
The US Oil & Gas Association fired back, pointing to the “1980 Crude Oil Windfall Profit Tax” that cut domestic production and boosted foreign imports. It was ultimately repealed in 1988.
“That in turn led us to depend even more on Middle East imports for another 20 years right up until the shale revolution occurred. Kind of like how California is dependent on imports now,” the post said, adding that reintroducing the bill would “repeat the exact same mistake.”
US Energy Secretary Chris Wright also weighed in, calling on California to “drill, baby, drill.”
“We are trying to bring a message to Gavin Newsom: unleash California energy, bring the jobs and opportunities here,” he said in an X post Saturday on X.
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