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Gavin Newsom aims to punish oil companies for ‘ranking price gouging’ as California gas prices hit $6.39 per gallon

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California Governor Gavin Newsom said Friday that he will call a special session of the state legislature in December to pass a new tax on oil company profits to punish them for what he called “rank-price manipulation.”

Gas prices have soared across the country this summer due to rising inflation, Russia’s invasion of Ukraine, and ongoing disruptions in the global supply chain.

But while gas prices have recovered somewhat nationwide, they have continued to rise in California, averaging $6.39 a gallon on Friday — $2.58 above the national average, according to the AAA.

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California has the second-highest gas tax in the country and other environmental rules increase the cost of fuel in the country’s most populous state. However, Newsom said there was “no justification” for a price difference of more than $2.50 per gallon between California gas and prices in other states.

“It’s time to get serious. I’m tired of this,” Newsom said. “We were too shy.”

The oil industry has cited California’s environmental laws and regulations to explain why gas prices in the state are routinely higher compared to the rest of the country. Kevin Slagl, vice president of the Western States Petroleum Association, said Newsom and state lawmakers should “take a hard look at California’s decades of energy policy” rather than propose a new tax.

“If this is anything other than a political ploy, the governor will not wait two months and will call the special session now, before the elections,” Slagl said. “This industry is now ready to work on real solutions to energy costs and reliability – if that’s what the governor really cares about.”

Several states have chosen to suspend their gas taxes this summer, including Marylandand New York and Georgia. Newsom and his fellow Democrats who control the state legislature have refused to do so, opting instead to send taxpayers $9.5 billion in rebates — which began showing up in bank accounts this week.

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It’s unclear how Newsom’s proposed tax will work. Newsom said he is still working on the details with legislative leaders, but said Friday that he wants to return the money “to the taxpayers,” possibly using the tax money to pay more rebates.

The state legislature briefly considered a proposal earlier this year that would have imposed an “unexpected profit tax” on the aggregate revenue of oil companies when the price of a gallon of gasoline was “unnaturally high compared to the price of a barrel of oil”.

This proposal would have required state regulators to set the tax rate, and to ensure that it restored profit margins for any oil companies that exceed 30 cents per gallon. Then, it was possible to return the money from the tax to the taxpayer by way of rebates.

Newsom did not comment on that proposal when it was introduced in March, and lawmakers quickly blocked it. However, it could serve as a blueprint for the new proposal being negotiated between Newsom and legislative leaders.

The two top leaders in the legislature – Senate Pro Temporary Speaker Tony Atkins and Assembly Speaker Anthony Rendon – said in a joint statement that lawmakers “will continue to consider all other options to help consumers.”

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“A solution that takes excessive profits out of the hands of oil companies and puts money back in the hands of consumers deserves strong consideration by the legislature,” they said. “We look forward to studying the governor’s detailed proposal when we receive it.”

California Republicans — who do not control enough seats to influence policy decisions in the legislature — have called the tax “reckless.”

“Who thinks here that another tax will lower your gas prices? Will it cut any costs in this case?” James Gallagher, the leader of the Republican Parliament, told reporters on Wednesday.

Last month, regulators at the California Energy Commission wrote a letter to five oil refineries — chevronAnd the Petroleum MarathonAnd the Energy PBFAnd the Philips 66 And the Valero – Demanding an explanation of why gas prices jumped 84 cents during a period of 10 days, even with the drop in oil prices. The committee wrote that the oil industry “has not provided an adequate and transparent explanation for this sharp rise in prices, which is causing real economic hardship to millions of Californians.”

On Friday, Scott Fulwarco, Valero’s vice president for state government affairs, responded that “California is the most expensive operating environment in the country and an extremely hostile regulatory environment for refining.” That, he said, caused refineries to shut down and supply tightened because California requires refineries to produce a specific fuel blend.

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He declined to provide details about the company’s operations based on the same antitrust concerns. But he said the company is making proper arrangements for the source of supply when some refineries fail for maintenance.

Newsom dismissed those arguments, saying that doesn’t represent a $2.50 difference between gas prices in California and those in the rest of the country.

“These guys are playing with us for fools,” Newsom said.

The California legislature usually meets between January and August, where they consider bills on a variety of topics. The governor has the power to call a special legislative session at any time by making a declaration. When a special session is held, legislators can only consider the issues mentioned in that declaration.

The last time the governor of California called for a special legislative session was in 2015, when he was the then governor of California. Jerry Brown has asked lawmakers to pass bills on health care and transportation.

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Coca-Cola is ‘fully’ compliant with SEC supplier emissions regulations — after controversy with some details

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One of the most controversial issues in corporate environmental impact reporting is called environmental impact reporting required by federal law Scope 3 emissions: those of third parties in the company’s supply chain.

For a company like Coca-Cola — the world’s largest polluter of plastic, according to A 2020 Report – This will include the carbon emissions from the suppliers you use to make their plastic soda bottles.

It is a hotly contested topic because companies feel they should not be held accountable for the decisions of others, while climate activists and regulators say that without assessing the entire supply chain, it is difficult Reducing global emissions by 45% by 2030.

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On Wednesday, o’clock luckImpact Initiative Conference in Atlanta, luck Executive Editor Peter Vanham spoke to The Coca-Cola Company’s President of Communications, Sustainability and Strategic Partnership Pia Perez, and Christina White, Deputy General Counsel at carbon accounting firm Persephone. Prior to her current role, Wyatt was a senior counsel with the Securities and Exchange Commission, where she helped craft its proposal Climate reporting regulations.

The reason for these proposed federal rules, White says, is that investors wanted “consistent and comparable information” about the company’s climate initiatives — or lack thereof. They wanted it to be in a format that allowed comparisons between companies to better gauge climate-related investment risks or opportunities. She added that the companies themselves welcomed the regulations as well because they did For a long time Clear guidance on what to disclose and how.

However, in June’s The Business Roundtable, a pressure group made up of CEOs – to which Coca-Cola belongs – sent message to the Securities and Exchange Commission, requesting that it review the Scope Measurement Requirements 3.

Perez explained that when Coca Cola signed the letter, he wasn’t against including Scope 3 emissions per se, just against the all-supplier requirements. She says some of the company’s suppliers are small, family-owned businesses that would not be able to make the investments needed to comply and risk going out of business.

(Disclosure: I used to be a PepsiCo employee, one of Coca-Cola’s largest competitors).

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“It’s about making sure that we look at fairness and consistency, as well as the lead time,” Perez says. “So we are fully in favor of disclosure.”

However, White countered that under the SEC’s proposed regulations, it would be “entirely acceptable” for smaller suppliers to use industry standard emissions standards as they develop the capabilities to measure them themselves. It was a sentiment echoed by the Securities and Exchange Commission, which said the plan would include a “phase period for Band 3 emissions,” according to one of the agencies. statement.

Coca-Cola’s current climate targets

The Coca-Cola Company already makes voluntary disclosures about its climate impact based on Science-based goals The initiative, which independently checks the company’s progress against its goals. that it current target is to cut total greenhouse gas emissions by 25% by 2030, according to the 2015 standard. The company also has an “ambition” of achieving net zero carbon emissions by 2050, which Perez was quick to define as “not a goal”.

Perez expressed that in her ideal world, the SEC’s guidelines for environmental reporting requirements for companies would be based on one of the reporting methods currently developed and used by companies. “If I could wave a magic wand, I’d like the SEC to adopt one of these existing frameworks that many companies already fill out,” she says.

White was more lukewarm about the possibility of adopting a set of guidelines from corporate actors rather than a regulatory agency. Her prediction: “The SEC will move to adopt the rules you proposed.”

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Wyatt hopes climate reporting guidelines will be adopted and become part of the normal reporting process that public companies already go through.

“Eventually this will become like financial reporting,” White says. “Just a standard.”

The new Impact Report weekly newsletter will examine how ESG news and trends are shaping the roles and responsibilities of today’s CEOs – and how they can better overcome these challenges. Subscribe here.

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Core PCE prices in the US rose less than expected; spending gains

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(Bloomberg) — A key measure of U.S. consumer prices posted its second-smallest increase this year while spending accelerated, offering hope that the Federal Reserve’s rate hikes will curb inflation without sparking a recession.

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Commerce Department data on Thursday showed that the personal consumption expenditures (PCE) price index excluding food and energy, which Federal Reserve Chairman Jerome Powell stressed this week is a more accurate measure of inflationary sentiment, rose less than expected by 0.2% in October from the previous month.

Compared to a year earlier, the gauge rose 5%, which is down from an upwardly revised 5.2% increase in September.

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The overall personal consumption expenditures price index rose 0.3% for the third month and was up 6% from a year ago, still well above the central bank’s target of 2%.

Personal spending, adjusted for changes in prices, rose 0.5% in October, the most since the start of the year and largely reflecting a rise in spending on goods.

Similar to last month’s CPI data, the report shows that while inflation has begun to ease, it is still very high. While a slowdown is certainly welcome, Powell stressed on Wednesday that the US is far from price stability and that it will take “significantly more evidence” to provide comfort that inflation is in fact declining.

Policymakers are expected to continue raising interest rates next year, albeit at a slower pace, and remain on hold for some time.

The median estimate in a Bloomberg survey of economists was for a 0.3% monthly increase in the core PCE price index and a 0.4% advance in the overall measure. The S&P 500 rose, the dollar fell, and 10-year Treasury yields fluctuated.

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What Bloomberg tells the economy…

The larger-than-expected slowdown in PCE prices in October adds to the case for a gradual increase in the pace of rate hikes at the upcoming FOMC meetings. However, there was strength elsewhere: Consumer spending started the fourth quarter at a strong clip, gains in wage income remained strong, and government distributions of refundable tax credits — which boosted income — likely just aren’t a one-off.”

Andrew Hesby and Eliza Winger, economists

For the full note, click here.

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Supported by a flexible labor market and continued wage increases, the pick-up in household spending points to a strong start for GDP in the fourth quarter.

Inflation-adjusted expenditures for goods jumped 1.1% in October, driven by new vehicle purchases. Spending on services rose 0.2%, supported by expenditures on health care, food services, accommodation, housing and utilities.

However, it is unclear whether consumers will be able to maintain this momentum in 2023.

With inflation continuing to outpace wage gains, many families are relying on savings, stimulus checks from some state governments, and credit cards to keep spending. There is growing concern that tight monetary policy will push the US economy into recession.

Low savings rate

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The Commerce Department report showed that the savings rate fell to 2.3% in October, the lowest level since 2005.

Inflation-adjusted disposable income rose 0.4%, the largest rise in three months. Non-price wages and salaries increased by 0.5%. The report also noted that one-time payments issued by countries boosted income in October.

Continued wage gains, particularly in the service sectors, could keep inflation consistently above the Fed’s target for a long time, underscoring the importance of the labor market to the Fed’s decision-making in the months ahead.

A measure of core services inflation that excludes housing and energy, Powell said on Wednesday “may be the most important category for understanding the future development of core inflation,” which was revised in October from the previous month.

Data released on Friday is expected to show that employers added another 200,000 jobs in November, while the unemployment rate remained at a historically low level of 3.7%.

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— with assistance from Matthew Boesler and Kristy Scheuble.

(Adds Market Open, comment from Bloomberg Economics)

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Tivic Health has an agreement with ALOM for product supply chain and logistics

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The company also recently announced additional steps to reduce cost and improve margin, including the implementation of a manufacturing partnership with Microart Services, which is expected to reduce printed circuit board subassembly costs by up to 70% while increasing manufacturing scalability.

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