Add Chevron to the Growing list of Businesses Fleeing California

California’s own Chevron Oil company is moving its headquarters to Houston, Texas from San Ramon, California, the latest big business to flee the Golden State. Chevron is in good company joining X/Twitter, Space X, Oracle, Hewlett Packard, Charles Schwab, and Toyota Motor North America, to name a few of the mega-businesses leaving California because of the state’s leftist/Marxist politics and regulatory environment.

This comes as no surprise to anyone watching California Governor Gavin Newsom deflect from his own debacles and radical policies to the oil and gas industry, demonizing producers and refiners as evil polluters and price gougers, even filing a lawsuit last year against five of the largest oil companies, including Chevron.

Except, Newsom is wrong. Newsom claims that the state’s highest-in-the-nation gas taxes and prices are not what led to dramatically spiking gas/oil prices but because of price gouging by the oil industry. In May, Newsom even signed a gas price gouging law into place.

“We have created a regulatory environment in California where it is nearly impossible to dig, drill, develop, mine, log, graze, grow, or manufacture anything,” Ed Ring said in the Globe in January. And Gov. Newsom is orchestrating all of this despite California’s need for oil and gas. “Despite being a sunny, solar friendly state, with ample areas blessed with high wind, California still derives 50 percent of its total energy from crude oil. Another 34 percent comes from natural gas. This fossil fuel total for California energy, 84 percent, actually exceeds the world average for 2022, which – including coal – came in at 82 percent.”

The California Energy Commission disagrees with the governor, showing that gas price spikes occurred in the last few years because of refineries temporally going out of commission because not enough oil was getting to them. The CEC also said that lower prices this year were caused by many factors, including a cut in industry costs and profits, lower crude oil costs, and in how much environmental programs are getting from the industry, the Globe reported. Prices could even be lower, but as the CEC noted, the only thing that went up was the gas tax itself.

Adding insult to injury, last year Governor Gavin Newsom appointed Tai Milder his “Oil Czar,” to lead the state’s investigation into California’s perpetually high gasoline prices. Milder will decide “whether it should impose a cap on oil refiner profits in order to reduce the perpetual gulf between California’s gas prices and the rest of the country’s,” Politico reported parroting the governor.

Friday Chevron announced their corporate relocation to Houston Texas from the Bay Area, where it has been based since 1879.

“The company expects all corporate functions to migrate to Houston over the next five years,” Chevron said. “Positions in support of the company’s California operations will remain in San Ramon.”

Chevron Chairman and CEO Mike Wirth and Vice Chairman Mark Nelson will move to Houston before the end of the year to be closer to other senior leaders, employees and business partners, NBC Bay Area reported. Other employees based in San Ramon won’t be impacted immediately, and the company said it expects the move to Houston to happen over the next five years. Those who work in positions that support Chevron’s California operations will remain in San Ramon.

Chevron has roughly 7,000 employees in the Houston area and 2,000 employees in San Ramon, the company reports, NBC Bay Area said. The company operates crude oil fields, technical facilities and two refineries in California. It also supplies more than 1,800 gas stations across the state.

Another nail in the coffin came from local politicians. In June, Richmond city leaders voted unanimously in favor of a ballot measure that will ask voters whether or not Chevron should pay an additional business tax on its refinery operations, NBC Bay Area reported. “The mayor and vice mayor of Richmond have said the new tax would raise millions of dollars annually for the city.”

If I was the Chevron CEO, I’d also leave California.

California voters aren’t buying the governor’s lies about the price gouging either. A recent poll found nearly half of all Californians blame the state’s gas tax for why California’s gasoline prices are so high, with only around a third saying that price gouging is to blame.

I have watched and reported on this for about two decades – so it’s no surprise at all, other than I’m not sure how oil and gas companies lasted so long in California.

As we reported in March, the California Governor, Legislature and State Air Resources Board are working hand in glove to restrict the availability of oil and gas and increase the cost of gas at the pump so severely, middle class and working class drivers will be making choices between groceries and fuel for the car.

The California Air Resources Board, which has targeted the oil and gas industry for many years, is mandating an additional 50 cents per gallon be added to the price of gas in California. This is all part of the goal to force California’s drivers out of their cars, and/or into electric vehicles. But ultimately, the Democrats’ goal is to ban petroleum-powered internal combustion engines by 2035 and gas-powered vehicles.

Notably, the California Air Resources Board is made up of unelected career political appointees. They are not legislators, nor should they be making law.

It is important to note that all tax increases are required to be voted on by the California Legislature. But the CARB has been bypassing the Legislature for years and passing their own “clean air” and “climate change” taxes – obviously with the implicit approval of the Legislature and governor.

The end goal is to price the middle class out of their cars. The left claims that it is all part of the goal to reduce greenhouse gas emissions by 85-percent by 2045.

And here’s where the rubber meets the road – according to the Western States Petroleum Association:

“Assembly Bill 3233 by Assemblywoman Dawn Addis (D-Morro Bay) and Sen. Scott Wiener (D-San Francisco), would authorize a local entity, by ordinance, to limit or prohibit oil and gas operations. In 2023, the California Supreme Court held that State law, and in particular Section 3106 of the Public Resources Code (PRC), preempts any contradictory ban or limitation imposed by a local authority on the methods of oil and gas production in its jurisdiction. The bill seeks to circumvent the recent California Supreme Court case law and Section 3106 PRC, and replace the comprehensive, longstanding State law with a patchwork of local ordinances that may ban or add unfeasible limits to oil and gas exploration, production and abandonment work.

By allowing local governments to adopt ordinances that may prohibit or significantly restrict an operator’s right to operate its existing oil and gas production wells or other facilities, AB 3233 has the potential to expose these local governments to significant liability. Operators hold valuable property rights in their existing oil and gas production operations. A local ordinance that results in a facial or de facto prohibition may result in an unconstitutional  violation of the Takings Clause under the federal and state constitutions unless the local government pays just compensation for the taking of these property rights from the operator.”

Here are some of the costly taxation policies implemented in California by the Legislature, Governor and Air Resources Board that drive up the cost of gasoline:

• 59.6 cents – State gas tax – increases annually
• 28 cents – Cap and Trade (estimate)
• 23 cents – Low Carbon Fuel Standard (estimate)
• 2 cents – Underground Storage Fee
• 10-15 cents – California’s switch to summer-blend costs more to produce than other types of gasoline.
• 14.4 cents – State sales tax (estimate based on 6/20 average price)
• 18.4 cents – Federal Excise tax

California’s total gas tax is approximately $1.43 per gallon today – on top of increasing gas prices, and will be nearly $2.00 per gallon by 2026.

The 2023 CARB Low Carbon Fuel Standard amendments document unabashedly outlines in black-and-white, the new gas tax increases through 2042 (page 57):

This certainly makes Chevron’s departure understandable.

Texas Gov. Greg Abbott celebrated Chevron’s decision to relocate, and even took a little dig: “Chevron, in Snub to California, to Move Its Headquarters to Houston.”

“Texas is your true home,” he posted on X. “Drill baby drill.”