Please ensure Javascript is enabled for purposes of website accessibility
Dan Walters: California Risks 'an Abrupt and Economically Devastating Fuel Shortage'
dan_walters
By Dan Walters, CalMatters Commentary
Published 10 months ago on
August 6, 2024

Chevron has warned it may close both refineries it operates in California, including this one in Richmond. (CalMatters/Loren Elliott)

Share

Getting your Trinity Audio player ready...

The war between Gov. Gavin Newsom and the state’s once-immense oil industry entered a new phase a few days ago when Chevron, California’s oldest and best-known producer of gasoline and other petroleum products, announced it was moving its corporate headquarters to Texas.

Dan Walters Profile Picture

Dan Walters

CalMatters

Opinion

Chevron, which dates its origins to the California Star Oil Works, which struck oil in the Santa Susana Mountains of Southern California in 1876, characterized the move from San Ramon to Houston as merely an ordinary managerial consolidation.

However, given its prominence, Newsom’s recurrent vilification of the industry and his vow to end sales of gasoline-powered cars as a way of becoming carbon-neutral by 2045, the move’s political aspects could not be ignored.

Newsom Changes His Tune on Chevron Exit

Initially, Newsom posted on social media a video denouncing oil industry “price gouging,” including a melty-face emoji characterizing the industry’s reaction to California’s efforts to dampen gas prices.

But his office quickly took down the video and issued a statement saying Chevron’s announcement “is the logical culmination of a long process that has repeatedly been foreshadowed by Chevron.”

Predictably, Texas’ Republican Gov. Greg Abbott, a frequent foil for Newsom, immediately cast Chevron’s move as a “snub” to California in a posting on X, formerly Twitter, calling Texas Chevron’s “true home.”

A more stinging rebuke came from the Bay Area Council, a business group that hews to a moderate political line and has often been supportive of Newsom.

“Chasing jobs and employers out of California is no way to run the economy,” said Jim Wunderman, the organization’s president. “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.”

Steady Exodus of Corporations From California

Were Chevron’s move an isolated event, it would be only temporarily interesting. However, California has seen a steady exodus of corporations, as the Bay Area Council noted, thus reinforcing its image of hostility to business.

Just days earlier, Elon Musk, who had already moved his Tesla corporate headquarters to Texas, announced that X and SpaceX would follow.

Chevron’s announcement also comes amid a flurry of layoffs and corporate retrenchments in the Bay Area’s high-tech industry, which have contributed to the state’s having the nation’s highest unemployment rate.

Chevron Warns It May Close California Refineries

Moreover, we may not have heard the last of Chevron’s moves. The company had been warning California officials that 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.

About the Author

Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He began his professional career in 1960, at age 16, at the Humboldt Times.

CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more columns by Dan Walters, go to calmatters.org/commentary.

Make Your Voice Heard

GV Wire encourages vigorous debate from people and organizations on local, state, and national issues. Submit your op-ed to bmcewen@gvwire.com for consideration.

 

RELATED TOPICS:

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

UP NEXT

RIP Local Broadcast Legend Marv Allen, 80, Longtime Voice of KVPR

Westlands Leader Calls Slight Water Boost ‘Disappointing’

2 hours ago

Republican Tuberville Announces Bid for Alabama Governor

2 hours ago

A Former Aide Says Sean ‘Diddy’ Combs Kidnapped Her in a Plot to Kill Kid Cudi

NEW YORK — A former top aide to Sean “Diddy” Combs testified Tuesday that the hip-hop mogul threatened to kill her during her first day on t...

10 minutes ago

Sean "Diddy" Combs stands as he is arraigned on a superseding indictment ahead of his May trial on sex trafficking charges, in New York, U.S., March 14, 2025, in this courtroom sketch. (REUTERS/Jane Rosenberg?/File Photo)
10 minutes ago

A Former Aide Says Sean ‘Diddy’ Combs Kidnapped Her in a Plot to Kill Kid Cudi

20 minutes ago

RIP Local Broadcast Legend Marv Allen, 80, Longtime Voice of KVPR

Todd Chrisley (2nd L) speaks next to his wife Julie (L) and their kids Chase and Savannah at a panel for the USA television series "Chrisley Knows Best" during the Television Critics Association Cable Summer Press Tour in Beverly Hills, California July 14, 2014. REUTERS/Mario Anzuoni/File Photo
49 minutes ago

Trump to Pardon Reality TV’s Todd and Julie Chrisley After Tax Evasion Conviction

2 hours ago

Westlands Leader Calls Slight Water Boost ‘Disappointing’

U.S. Senator Tommy Tuberville (R-AL) speaks at the Conservative Political Action Conference (CPAC) annual meeting in National Harbor, Maryland, U.S., February 22, 2024. REUTERS/Amanda Andrade-Rhoades/File Photo
2 hours ago

Republican Tuberville Announces Bid for Alabama Governor

Residents walk by power grid towers at Bair Island State Marine Park in Redwood City, California, United States, January 26, 2022. REUTERS/Carlos Barria/File Photo
2 hours ago

PG&E Sees Surge in AI Data Center Interest With Fresno Area Emerging as New Hotspot

Salesforce Tower in New York
3 hours ago

SF-Based Salesforce Is Buying Informatica in $8 Billion Deal

4 hours ago

Fresno Unified Safety Officer Alleges Battery by District Exec. What Does PD Say?

Help continue the work that gets you the news that matters most.

Search

Send this to a friend