Kamala Harris Attorney General California Department of Justice P.O. Box 944255 Sacramento, CA 94244-2550 Dear Attorney General Harris, We are writing on behalf of millions of Californians to express strong concerns about the potential manipulation of gasoline prices by oil companies, as transportation fuels come under the greenhouse gas emissions cap created by AB 32, the Global Warming Solutions Act of 2006. On January 1st, 2015, AB 32which was overwhelmingly reaffirmed by California voters in 2010 with the defeat of Prop 23will begin to cap emissions from transportation fuels, which is the largest source of pollution in our state and 40 percent of total greenhouse gas emissions. For far too long, low-income communities in California have borne the impact of some of the worst air quality in the countrya result of a massive transportation system

dependent on polluting fossil fuels. In an effort to address this public health crisis and support a more sustainable economy, California is championing programs and policies that are both cleaning up and diversifying our fuel mix. Unfortunately, the fuels market in California continues to be dominated by a handful of producers who seek to undermine these critical policies through a massive misinformation campaign. The oil industry is currently spending millions of dollars on a lobbying and public relations campaign designed to roll back the law. A cornerstone of their campaign is an implicit and in some cases explicit threat that the oil industry will increase gasoline prices for California consumers if it is forced to comply with AB 32. The California Air Resources Board, the administrating agency for AB 32, in a recent letter stated that:

The nature and design of the Cap-and-Trade program provides that any cost from bringing fuels under the cap will occur over time. In fact, unless there were to be unlawful collusion on the part of the industry, any price impacts should vary among oil companies, reflecting their difference in compliance costs.

The Attorney Generals office has the important responsibility and opportunity to protect California consumers from anticompetitive industry practices. Past experience and analysis shows that the primary catalysts for change in gas prices are: volatility in global oil markets, refinery operations, inventory levels, refined product exports and seasonal demand. Oil companies have already taken steps to comply with AB 32many companies have already made investments in anticipation of the law, and the oil industry has already begun investing in compliance instruments. This Big Oil campaign is nothing more than a transparent attempt to misdirect the public and blame uncertain future price fluctuations on the Governor, the Legislature and state regulators in hopes of distracting consumers from their attempt to get a free ride while raking in record profits. Strategic price manipulation in the fuels market serves to perpetuate Californias dependence on fossil fuels, resulting in poor air quality and volatile prices, at the expense of Californians health and wallets. Your office has been a leader in efforts to protect consumers, and we trust that you will take these issues seriously. We look forward to supporting your efforts to closely monitor the situation and ensure oil companies in California arent unlawfully colluding to manipulate prices and manufacturing political dissent. The benefits of AB 32 are vast. Environmental benefits include reducing greenhouse gases to levels that are equivalent to removing 15 million cars from the road. On the business front, Californias growing economy is already benefiting significantly from AB 32, with new clean energy technologies emerging up and down the state. And at the consumer level, AB 32 will save the average household nearly $400 in annual fuel expenditures while also directing needed investments to disadvantaged communities.

Together, the positive environmental and economic benefits of AB 32 are meaningful for all of Californias families. We strongly support Californias clean air and energy leadership and the underlying goals of AB 32. We appreciate your efforts to ensure that consumers are protected from price manipulation at the pump. Sincerely, Josh Fryday, NextGen Climate Timothy OConnor, Environmental Defense Fund Jon Youngdahl, SEIU California Strela Cervas, California Environmental Justice Alliance Jamie Court, Consumer Watchdog Sarah Rose, California League of Conservation Voters Miya Yoshitani, Asian Pacific Environmental Network Michael Lighty, National Nurses United Diane Takvorian, Environmental Health & Justice Campaign Byron Guidel, Communities for a Better Environment Paul Song, Courage Campaign Penny Newman, Center for Community Action and Environmental Justice