Gas prices, Sacramento, CA, June 13, 2022. (Photo: Katy Grimes for California Globe)
Chevron Sends Letter to CA Legislature Lambasting Newsom’s Oil/Gas Proposal
‘Supply shortages are an outcome of California’s regulatory policy and fail to reflect the energy industry’s cyclical nature’
By Katy Grimes, October 9, 2024 7:54 am
Chevron President Andy Walz sent a letter Tuesday condemning Gov. Gavin Newsom’s proposal to decrease the state’s gas supply, which will clearly result in even higher gas prices at the pump, saying he seeks to address “some of the inaccurate and flawed arguments made by its proponents.”
California’s own Chevron Oil Company announced in August their corporate relocation to Houston Texas from the Bay Area, where it has been based since 1879, the latest big business to flee the Golden State. And Walz said of the 36 states in which they work, only California has the highest gas prices.
That is the argument the Globe has made for some time now: “If the ‘Big Oil’ companies are so greedy, why are they only greedy in California and not greedy in every state?”
In the Chevron letter (below), Walz said:
Chevron is concerned by the recent Committee and Assembly passages of ABX2-1 and seek to address some of the inaccurate and flawed arguments made by its proponents. As the Senate prepares to vote, it is crucial that it makes a fact-based decision. The political posturing that has characterized these proceedings must stop, including baseless and frankly ridiculous claims that the industry is engaging in price gouging. Let us have a balanced, fact-grounded conversation about the state of California’s fuels marketplace, a marketplace weakened by misguided policy decisions, driven by
misleading rhetoric.
Across the three dozen states in which we work, the California government remains unique in its focus on marketplace interference with negative effects on consumers resulting in the highest U.S. gasoline prices. California has investigated the industry numerous times for price gouging and come up with no evidence or charges. Chevron has been a trusted partner to California consumers for 140 years. We value that trust as we strive to reliably provide ever-cleaner fuel to Californians and our neighbors.
Chevron’s move and now the letter 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.
Walz challenges Gov. Newsom’s falsehoods and says:
…the claim that regulation is justified because “price spikes are profit spikes” is misleading.
and
the claim that “refiners did not adequately prepare for [planned maintenance events] by increasing inventories and imports,” while we do not speak for other refiners, we believe this to be uninformed and not how we operate.
The Governor’s proposal, ABX2-1, will give the California Energy Commission more authority to impose new mandates for oil storage requirements on oil refineries in California, even as California is on the verge of an energy crisis with the push for electrification by 2035, as John Kabatek, California State Director, National Federation of Independent Business recently warned. “The regulation requirements in ABX2-1 will artificially create a fuel shortage crisis due to limiting the distribution of fuel.”
As the Globe reported, California Governor Gavin Newsom called for a special legislative session after accusing California’s oil refineries of price gouging – a clear sign that he is economically illiterate.
Chevron appears to agree.
Economic fundamentals force prices up when demand outstrips supply. This signals the need to bring in more expensive finished gasoline or blending components. These statements about price spikes also overlook that supply shortages are an outcome of
California’s regulatory policy and fail to reflect the energy industry’s cyclical nature.
While we do not purport to speak for the industry, quite apart from the unfounded allegation of price gouging, there are many instances where net refining margins are negative, causing refineries to operate at a loss.
Walz continues, addressing Newsom’s price-spiking allegations:
The suggestion that refiners mishandle inventory prior to shutdowns is likewise an ill-informed generalization. We have contractual obligations to supply our customers and go to great lengths to meet them.
California’s oil and gas industry is perhaps the most regulated industry in the state.
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.
Walz addresses California’s increasing taxes and regulations:
Without investment in the critical energy infrastructure that allows California consumers to live their daily lives, your body will
ensure these products become more expensive and less reliable. The California gasoline marketplace is constrained, and government manipulation will only increase prices.
According to the California Energy Commission, California’s gas tax breakdown totals $1.77, which gives us the highest prices for a gallon of gas in the nation of $4.68:
Here is Chevron President Andy Walz’s letter to the California Legislature:
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No doubt there are multiple reasons beyond sheer stupidity for taking these steps that will drive California further off the cliff. In my opinion this move is all political. It appears that Trump is going back to the Whitehouse in January. We would all agree that Newsoms fidelity is not to the citizens of California and if anything, his fidelity lies towards China. Newsom has publicly stated that he wants California to protect liberal policies against a second Trump term policies. Trump has publicly stated that he will “implement a drill baby drill” approach to energy. By further mismanaging California’s, Arizona’s and Nevada’s gas market and increasing this regions inflation it will provide revenue to support the “cause” against Trump and to slowdown the American economic recovery that is to come under a pro-growth president. Newsom and his crowd support growth for a narrow class of folks while Trump has policies that will Make America Great again for the whole country. If we weren’t actually living this nightmare, it would make a good plot for a novel.
Newsom and Democrats attempting to stop any global warming by making energy so expensive that 75% of CA households are experiencing significant financial stress! Even if California could have net zero emissions, it wouldn’t make a tick of difference when they’re just 0.5% of world population. Democrat insanity rules in California!
Good on Chevron’s leadership calling it like it actually is, including publicly stating that Governor Gavin Newsom IS economically illiterate.
Everything in the letter is truth, and everything that Newsom and his UNELECTED Board minions are pursuing is straight out of the globalist war on internal combustion engines and in favor of the “green new deal” and Chinese economic interests.
Newsom and the CARB’s “mandates” are intended to make fuel shortages and prices so econically painful that Californians are forced out of their independent transportation and into mass transit, electric vehicles or their wet-dream of “15 minute cities”.
Wake the eff up California, and STOP VOTING for any and all Democrats that are aligned with these policies this November, all the way up,to Kamala Harris for President (God firbid!)
A vote for Democrats is signing up for your own personal economic SUICIDE!!!
This has been PROVEN over the last four years of “Bidenomics” and THEIR fuel and energy policies!!!
Chevron (CVX): 4.36% dividend
Brit Petro (BP): 5.53 %
Exxon Mobil (XOM): 3.11%
Conoco Phillips (COP) 2.09%
Many, many, many retirees living on fixed incomes have these Mega Cap companies as part of their holdings and survive on the dividends (PROFITS RETURNED TO INVESTORS) to help meet their monthly financial obligations.
Why does Gavin keep trying to screw with retirees incomes ????? (Maybe because the Feds told him he couldn’t touch their pensions if they no longer lived in His state and he needs to hoover up some revenue SOMEWHERE to meet His budget shortfalls ??)
At least in SoCal, there have been several projects on the books to build millions of barrels of gasoline tankage since pre-covid. For those distributors/wholesalers located in one of the leased Port properties, this is virtually impossible. Now it is even worse because new ICE vehicles are being banned in less than a decade. No upper management is going to spend the $10 million of capital just to build even a single 100 MB tank. Tank construction and infrastructure upgrades are 50-year projects. You couldn’t get the permits from AQMD anyway.
Perhaps Governor Newsom is guilty of gas tax gouging? ? ?
Just another company to be run out of Calif.
And Chevron was in fact the originally:”Standard Oil Company of California.”
I know because dad started with them in 1926 and died on the job in 1966. He was a wholesale distributor in the Salinas Valley for Standard Oil of Calif. I worked my way through college part time at standard station #224 in King City from 1960 to 1965. The Newsom administration has all but run all the refineries out from Calif. Many independent Chevron dealers have closed shop. The last thing to go will be the Chevron, Richmond refinery because the state has discouraged capital investments as stated in the Walz letter. Adjoining states governors have pleaded with California to cease and desist. The democrats have finally run California to the ultimate brink.
Newsom’s goal is to further alienate his fiefdom from the rest of the 49 states, thus granting him even more power as its king. California is a sovereign nation within a nation. Isn’t this is a sanctuary state? One judge struck down Prop 187 because immigration is a federal responsibility. Yet announcing that California is a sanctuary state meets with no such judicial reproach. Whoever heard of such a thing, that a nation (i.e. California) would despise its own citizens in order to cozy up to foreigners instead? Democrats want whites out of California, but if you’re white and infected with woke lunacy, you can stay. Make no mistake about it. The Democrat Party is a racist party. Those who cry “racism” loudest are the real racists among us. Next, import millions of Asians and Mexicans into the fiefdom because diversity (code for no whites) is our new god. The upshot is that there will remain a ruling elite of whites, such as Newsom and Wiener et al, to ride herd over the new easily manipulated non-white replacement population, who will vote Democrat forever. It’s not a conspiracy, but it’s happening just the same. All the pieces are falling into place. They just need a little help from his majesty now and then.
Narcissist imbeciles NEVER blame themselves for their own stupidity. Communist politicians prove this fact everyday.
unfortunately the don’t realize that he is NOT acting in good faith.