SB 1337 adds Section 25372.5 to the Public Resources Code to establish an interagency workgroup led by the State Energy Resources Conservation and Development Commission (the California Energy Commission, or CEC). The workgroup must include the State Lands Commission, relevant air districts, local governments, airports, and ports, and is charged with strengthening coordination, developing a holistic transportation fuels strategy, implementing policies to manage the fuels sector during the transition to clean energy, and proposing cross‑government partnerships to align regulations and permitting.
The bill responds to legislative findings that changing demand, market volatility, and potential refinery capacity loss create risks to fuel supply, consumer prices, worker and community well‑being, and state climate objectives. By creating a formal coordinating body in statute, the bill aims to reduce regulatory fragmentation that stakeholders identified across crude delivery, air regulations, cap‑and‑trade interactions, and permitting, while trying to preserve environmental, public health, labor, economic, and consumer protections through the transition.
At a Glance
What It Does
Establishes a statutorily authorized interagency workgroup led by the CEC with named members (State Lands Commission, air districts, local governments, airports, ports) to coordinate policy, develop a transportation fuels strategy, implement policies to manage the sector during the clean‑energy transition, and propose partnerships to align regulation and permitting across levels of government.
Who It Affects
State agencies and boards, regional air districts, local governments (including ports and airports), petroleum refiners and fuel suppliers, workforce and fence‑line communities dependent on refinery operations, and developers of clean transportation energy systems.
Why It Matters
The workgroup creates a single, legislated venue for cross‑jurisdictional problem solving where industry has flagged intersecting regulatory issues; if used effectively, it could reduce permitting delays, clarify regulatory interactions, and shape how California balances near‑term fuel reliability with long‑term decarbonization.
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What This Bill Actually Does
The bill places an interagency workgroup directly into the Public Resources Code and assigns the California Energy Commission the lead role. Rather than creating a new agency, SB 1337 creates a convening body: the CEC must bring together the State Lands Commission, relevant air districts, local governments, airports, and ports to coordinate on transportation fuels policy and implementation.
The statute lists broad tasks rather than prescriptive procedures, giving the workgroup latitude to design its processes.
The workgroup’s job is fourfold: strengthen coordination and clear lines of communication across jurisdictions to inform policy implementation; implement a suite of policies and programs to manage the transportation fuels sector while new clean energy systems come online; develop and execute a holistic transportation fuels strategy; and propose partnerships between the Governor’s office, state agencies, and the Legislature that can align regulations and permitting across government levels. The bill expressly ties these duties to the problems identified in the Legislature’s findings—volatile markets, declining demand, potential refinery capacity loss—and to a June 27, 2025, CEC letter to the Governor that the statute references as a roadmap for the kinds of state policy goals the workgroup should support.Practically, the statute signals a push toward coordinated regulatory and permitting reform without prescribing specific changes.
It frames the workgroup’s remit to balance environmental, public health, labor, economic, and consumer protections while managing short‑term risks to fuel supply and prices. The bill does not specify meeting frequency, decision rules, funding, staffing, reporting deadlines, or enforcement authority; instead it creates a platform for agencies and stakeholders to identify cross‑cutting solutions and recommend regulatory alignment and partnerships to the Governor and Legislature.
The Five Things You Need to Know
SB 1337 adds a new Section 25372.5 to the Public Resources Code creating a legislated interagency workgroup on transportation fuels led by the California Energy Commission.
The workgroup’s statutory membership explicitly includes the State Lands Commission, relevant air districts, local governments, airports, and ports—linking coastal and local infrastructure actors into state planning.
The statute directs the workgroup to both implement policies and programs to manage the transportation fuels sector during the transition and to develop and execute a holistic transportation fuels strategy.
The bill requires the workgroup to propose partnership opportunities between the Governor’s office, state agencies, and the Legislature to strategically align regulations and permitting across government levels.
SB 1337 anchors its charge in legislative findings that cite specific regulatory friction points raised by industry—crude delivery, CEC regulatory tools, the At‑Berth Regulation, and California Cap‑and‑Invest interactions—as drivers for coordinated action.
Section-by-Section Breakdown
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Legislative findings that justify a coordinated response
This opening section compiles the Legislature’s rationale: declining demand, international market volatility, and the risk of refinery capacity loss create threats to fuel supply, prices, worker safety, and community revenue. It also flags that industry has identified intersecting regulatory problems—ranging from crude delivery to air rules and cap‑and‑invest interactions—so the workgroup’s mandate is presented as a remedy for fragmented oversight. For practitioners, these findings are the statutory policy goals the workgroup will be expected to address when prioritizing projects.
Create coordination and clear communication channels
Subsection (a) requires the CEC to strengthen coordination and establish clear lines of communication across state, regional, and local authorities and stakeholders. The statutory language obliges the workgroup to prioritize critical energy policies and to inform policy implementation, but it does not prescribe governance mechanics. That means the CEC will decide how to operationalize meetings, data‑sharing, and stakeholder engagement unless subsequent guidance or agreements create formal procedures.
Implement policies and programs to manage the sector during transition
Subsection (b) asks the workgroup to implement a suite of policies and programs that keep the transportation fuels sector functional while new clean technologies are developed. The bill instructs the workgroup to preserve environmental, public health, labor, economic, and consumer protections during this period; however, it leaves the content, prioritization, and legal basis of those policies to the workgroup and the participating agencies—rather than spelling out specific regulatory actions or funding mechanisms.
Craft a holistic fuels strategy and propose cross‑government alignment
Subsection (c) requires the development and execution of a holistic transportation fuels strategy, giving the group a strategic planning mandate that can cover supply, infrastructure, and transition timelines. Subsection (d) directs the workgroup to identify partnership opportunities with the Governor’s office and the Legislature to align regulations and permitting across government levels, explicitly referencing a June 27, 2025, CEC letter as context. These provisions position the workgroup to recommend statutory or administrative changes, but they do not grant it rulemaking power—implementation of any recommended regulatory realignment will require action by the relevant agencies or the Legislature.
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Who Benefits
- Consumers and ratepayers — a coordinated strategy aims to reduce the risk of abrupt fuel shortages and price spikes that follow sudden refinery capacity losses, improving near‑term supply stability.
- Local governments, ports, and airports — inclusion in the statutory membership gives these entities a formal seat at the table for planning, which can shorten permitting timelines and align infrastructure investments with state objectives.
- Workforce and fence‑line communities — the bill explicitly recognizes worker safety and community impacts, creating a venue to surface transition protections and potentially prioritize programs that mitigate local economic harm.
- Regulatory agencies — air districts and state agencies may gain clearer interagency protocols and shared information, reducing regulatory conflicts and enabling more predictable implementation of overlapping programs.
- Clean energy developers — a coordinated permitting and regulatory approach could lower transaction costs and uncertainty for projects supplying low‑carbon transportation fuels or electrification infrastructure.
Who Bears the Cost
- California Energy Commission and participating agencies — the CEC must lead and staff the effort without specified funding in the statute, creating a likely resource and administrative burden unless the Legislature appropriates funds separately.
- Local governments and air districts — these bodies may need to commit staff time, data, and regulatory bandwidth to the workgroup’s agenda, potentially diverting resources from other local priorities.
- Refiners and fuel suppliers — alignment of permitting and regulatory expectations could impose new compliance obligations or constrain operational flexibility as the state seeks to manage supply risks and emissions.
- Permitting authorities — accelerated or harmonized permitting processes may transfer workload to permitting agencies and require changes in internal procedures, with attendant legal and administrative costs.
- Legislature and Governor’s offices — although the workgroup reports and proposes partnerships, effectuating regulatory alignment will likely require additional legislative or executive action, consuming political and legislative capital.
Key Issues
The Core Tension
The central dilemma is balancing near‑term fuel reliability and the economic well‑being of workers and communities against the state’s long‑term climate and air quality goals: actions that smooth supply and reduce price volatility in the short run may require regulatory compromises or fast‑tracked permitting that risk weakening environmental, public health, or labor protections.
SB 1337 creates a forum for cross‑jurisdictional coordination but leaves key implementation questions open. The statute names participants and tasks but omits operational details: it does not set timelines, reporting requirements, decision‑making rules, staffing levels, or funding sources.
That gap means the workgroup’s effectiveness will depend on the CEC’s discretionary choices and on follow‑on appropriations or interagency memoranda of understanding. Practitioners should watch whether the CEC issues charters or agreements that define meeting cadence, data access, and privacy protections.
The bill also raises statutory and political boundaries that are unresolved on the page. Aligning regulations and permitting across state and local authorities, or proposing legislative fixes, will surface conflicts with local control, air district authority, and existing statutes (for example, the legal bases for At‑Berth or cap‑and‑invest regulations).
There’s a risk that seeking faster alignment to protect supply could create pressure to narrow environmental or community protections unless safeguards are expressly written into any recommended changes. Finally, the workgroup’s reliance on stakeholder identification of friction points opens the door to competing stakeholder priorities—industry’s focus on operational continuity may clash with environmental justice advocates prioritizing stricter emissions controls in vulnerable communities.
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