After 145 years in California, Chevron finally threw in the towel and announced last week that the company had had enough and was relocating its corporate headquarters from San Ramon to Houston effective Jan. 1.
Given California’s relentless push to eliminate the use of fossil fuels – despite the fact the state generates less than 1% of the world’s carbon emissions and thus its actions will have no significant impact on worldwide climate change – it was probably inevitable that the country’s second-largest oil company would move its corporate operations to a much more business-friendly state.
While Chevron CEO Mike Wirth said the move was made to “enable better collaboration and engagement” with other executives, employees, and partners and remains committed to its refineries and other oil-related operations, the company stated that the state’s regulatory climate was a factor.
“We have previously stated that we believe state policy makers have pursued policies that raise costs and consumer prices, creating a hardship for all Californians, especially those who can least afford it. These policies have also made California investment unappealing compared with opportunities elsewhere in the U.S. and globally,” the company said. “Texas offers a business-friendly environment, a more affordable cost of living, and better proximity to key counterparts in the service sector, our industry and academia.”
Jim Wunderman, CEO of the business-backed Bay Area Council, said state officials needed to take a hard look at what their actions are doing to the economy.
“Chasing jobs and employers out of California is no way to run the economy,” Wunderman said in a statement. “It’s an embarrassment for California that we’ve lost so many global companies because of misguided policies that make it incredibly difficult to do business here. California’s elected leaders need to take stock of the decisions they’re making that affect millions of families and workers, impact the state budget and have grave consequences for the future economic health of this state.”
FBAC has been carrying that message to lawmakers, the Governor’s Office and regulators since our founding 12 years ago. Unfortunately, too many policymakers just don’t understand how businesses and the economy work. Perhaps this blow to the state’s ego will help.
Unfortunately, Governor Gavin Newsom’s spokesperson basically said goodbye and good riddance in a statement to the Chronicle. “We’re proud of California’s place as the leading creator of clean energy jobs — a critical part of our diverse, innovative, and vibrant economy.”
But there may be more to the story. CalMatters columnist Dan Walters pointed out that Chevron’s exodus from California may not be done quite yet.
In his column today, the veteran newsman noted that Chevron has warned state officials it might close its two refineries in the state, which are major producers of the state’s unique gasoline blend.
Voters in Richmond, the site of one Chevron refinery, will decide in November whether to impose a special tax on the refinery, $1 per barrel, and the company has accused Richmond’s leaders of “playing chicken” with their largest taxpayer and employer.
Politico reported that Andy Walz, a top Chevron executive, warned in an interview about the potential consequences of the Richmond tax measure. “I’m not going to tell you that that’s the death knell, but we’re getting close,” he said, adding, “if I can’t invest there, and I can’t get a return, we will move on.”
Newsom and other California politicians openly intend to eventually shut down the oil industry to reduce the state’s carbon footprint. But they want a gradual reduction so many millions of gasoline-powered cars still on the road can run until phased out.
Were Chevron and other producers to decide, as Walz warns, that continuing operations in a politically hostile California no longer pencils out, the state could see an abrupt and economically devastating fuel shortage.