Gov. Gavin Newsom (D-CA) on Friday signed sweeping climate and energy legislation aimed at reducing emissions, lowering energy costs, and increasing oil production.

The legislation passed last week includes six bills addressing key initiatives such as extending the state’s cap-and-trade program, approving new oil drilling, and expanding the state’s wildfire fund.

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The efforts to boost oil production represent a change in attitude for Newsom, who, in recent years, has blamed producers for high prices and pursued measures to limit their profits, as well as imposed environmental measures opposed by the industry. Now, he is shifting toward backing more production in a bid to lower prices.

California, simultaneously, is continuing its efforts to reduce emissions and achieve its climate goals through the legislation, despite the Trump administration’s attempts to roll back various state and federal climate policies.

“We have made tremendous progress over the course of the last many weeks trying to reconcile these simultaneous crises that we have,” Newsom said at the bill’s signing ceremony. “This climate crisis, yes, crisis of democracy, growing crisis of confidence that people can deliver and deliver results.” 

“For me, [this is what] makes this day special — six bills that are all about the how, not about the what and the why,” he said. “We’ve done a very effective job of identifying the problem, but not many jurisdictions have identified strategies to actually deliver real and demonstrable results.” 

The legislation extends the state’s cap-and-trade program, which was set to expire in 2030, through 2045. Newsom rebranded the program as the “cap-and-invest” program, which is meant to hold polluters accountable by placing limits on emissions and charging companies for exceeding the limits. The state seeks to achieve net-zero emissions by 2045.

As part of the legislation, state lawmakers are also seeking to address the decline in oil production in the state. 

State legislators included a measure that would streamline the permitting process for up to 2,000 new oil wells in Kern County to help supply the state’s oil refineries and stabilize gas prices. 

Gas prices in California are typically higher than those in the rest of the country, which has been attributed to oil companies leaving the state. As of Friday, the average gas price in California is $4.65, compared to the national average of $3.19.

Valero Energy announced earlier this year plans to end operations at its San Francisco-area refinery by April 2026. The California Energy Commission has looked to find buyers for the plant, Reuters reported at the time.

Phillips 66 also announced last year that it would end operations at its oil refinery in Los Angeles. The refinery is set to close at the end of the year. 

“Our state of mind is firmly planted on the application, the implementation, and that includes a balanced approach in this context,” Newsom said. “The reason this is bipartisan, the reason you heard Kern County and others, is we have to effectively transition.” 

“This is not an ideological endeavor. We’re in the practical application business,” he added. “We’ve got to manifest our ideals and our goals. And so this lays it out, but it lays it out without laying tracks over folks.”

State lawmakers are also trying to lay the groundwork for greater regional cooperation. The legislation creates a framework for California to join a regional electricity market with other Western states.

Additionally, the bill extends the state’s wildfire fund and reforms utility funding for wildfire prevention. The state’s fund was first established after Pacific Gas & Electric faced bankruptcy in 2018, following the Camp Fire. However, the fund began to drain after the Eaton Fire, which sparked near Southern California Edison equipment in January.

Newsom and state lawmakers agreed to replenish the fund with $18 billion over a 10-year period. The fund’s contributions would be split between utility customers and shareholders. 

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Democratic California Senate President pro Tempore Mike McGuire, who led the effort, said at the signing ceremony, “Today’s a big win for the Golden State.”

“If you pay utility bills and you want them lower, you win. If you drive a car and hate gas price spikes, you win. If you want clean drinking water, you win. If you want to breathe clean air, you win today,” he added.