Actually, there's another Spanish word I would have rather used besides muchachos, but I like this job.
In any event, Chevron has notified the state of California and its oleaginous chief executive Gavin Newsom that their long cohabitation is at an end.
Their bags are packed, and they're ready to go...
...but. Before they pull chocks and ride off into the sunset, they'd like to clarify a few things.
Starting with "why."Chevron Corp. is relocating headquarters to Houston from California after repeatedly warning that the Golden State’s regulatory regime was making it a tough place to do business.
140 years of doing business in one state is a tenure of epic proportions and not to be abandoned lightly nor did Chevron ever wish to do so. But CA is in its own world, and there's only so much abuse a business bottom line can handle before it busts out or breaks down.
It's not as if the company hadn't tried to tell the lunatics running the state.
...Chevron already had slashed new investments in California refining, citing “adversarial” government policies in a state that has some of the most stringent environmental rules in the US. In January, refining executive Andy Walz warned that the state was playing a “dangerous game” with climate rules that threatened to spike gasoline prices.
Chevron was immediately accused of "playing politics," which is ridiculous on its face. No one moves a multi-national on a whim. Companies move because the business climate is eating them alive, and the deterioration is so marked and so prolonged that they see no hope of recovering.
So Chevron will be joining the growing list of large companies in exodus to friendlier places elsewhere.
...“We’ve had some policy differences with California,” Wirth said during a Bloomberg Television interview. “But this isn’t a move about politics. It’s a move about what’s good for our company to compete and perform.”
...Chevron joins a long list of California emigres that includes Oracle Corp., Hewlett Packard Enterprise Co. and Tesla Inc. While the migration among former Silicon Valley tech giants has been largely driven by tax and and cost-of-living considerations, Chevron has been at loggerheads with state leaders over increasingly tough fossil-fuel rules.
Now, Chevron is headquartered in San Ramon, which is close to *checks notes* San Francisco.
Well, oh, dear. That city is already in a tough hole commercially as far as real estate vacancies go, and their tax base is awfully shaky. I just did a post the other day where I had to do some more digging on San Fran financials. From what came across, the city's in a honkin' huge deficit hole of some $799M for FYs 2025 and 26.
According to Chevron's announcement, they turn their CA HQ lights out on 1 January 2025 - less than six months from now.
Will the last company to leave California please turn off the lights?
— Faigley (@Faigley) August 2, 2024
I love how the Chevron executive used such an understated "policy differences" to describe the all-out war Newsom and company have been waging on them.
Just last year, the state of CA sued Chevron, claiming the company had "misled" poor, naive state residents about the harm from fossil fuels and climate change.
...Chevron did not officially state a reason for the move.
But it comes after the state of California sued Chevron and other large oil companies last year, claiming that they misled the public about the risks of fossil fuels, the extraction of use of which are a leading cause of climate change.
In March, Chevron agreed to pay more than $13 million in fines for dozens of past oil spills in California.
Additionally, residents of Richmond, CA - a Bay area town that's had a Chevron refinery for over 100 years - are going to the polls in November to decide whether to tax the refinery to close a $24M budget gap and, in classic prog fashion, to force the evil corporation to pay its fair share.
...A city report finds Richmond has a $24 million gap in its 2024 budget, and the city needs new revenue to balance the budget.
Supporters of the proposal say big companies and polluters like Chevron aren't paying their fair share, and causing millions in health care bills for Richmond residents.
"Every day, big polluters in Richmond endanger our communities' health," Vice Mayor Claudia Jiminez said. "We are talking about big corporations, not small businesses who are enriching themselves at the expense of our families."
Richmond's proposed tax isn't small potatoes and it sounds as if the evil corporation pays a hefty share of the town's bills already. But that's not gonna cut it with a big, fat golden goose within the city limits. As written, Richmond wants an extra "buck a barrel" (!) in new refinery taxes from Chevron. The numbers are staggering.
...The Chevron Richmond Refinery produces one in five gallons of California gas and three in five gallons of jet fuel; a critical asset to California's energy profile. Even though Chevron Corporation made $21.3 billion in profits last year, lower production at Richmond could lower refinery employment.
Richmond collects about $46 million in taxes each year from Chevron, which the company says is already 25% of the city's budget.
The buck a barrel tax could raise as much as $90 million more a year.
HOLY SMOKING HIGHWAY ROBBERY
Does Chevron's corporate exit from the state affect the refinery's operations, and how so? No one's saying yet. Maybe Richmond needs to take a deep breath, too.
The state house Republican leader let it rip when the news broke of Chevron's departure.
...State Assembly Republican leader James Gallagher, among California's most vocal critics of Democrats, issued a statement Friday shortly after the announcement.
"This is an entirely predictable consequence of Gavin Newsom’s constant demonization of the companies California depends on for energy, jobs and tax revenue," his statement read. "As Californians continue to struggle with the highest gas prices and unemployment of any state in the nation, they know they are paying the price for Newsom’s political stunts. No wonder his approval ratings are at a record low."
As CEO Wirth says, they obviously don't need or want us.
$CVX CEO Michael Wirth commented on @Chevron deciding to move its HQ from California to Texas.
— Squawk Box (@SquawkCNBC) August 2, 2024
"Houston is the epicenter of our industry," he said, later adding, "California is discouraging investment in the energy that runs its economy." pic.twitter.com/8DJDO3fmbv
About time to leave the abusive spouse and find your people.
Welcome to H-town Chevron HQ!
— Team Bettencourt (@TeamBettencourt) August 2, 2024
This announcement by @Chevron that Chair Mike Wirth and Vice Chair Mark Nelson will move to Houston followed by up to 2k employees over 5 years is great news for the Houston Metro area, and recognition that the "Energy Capital of the World" is the… https://t.co/SIN35X0qvX pic.twitter.com/QJo73Knte2
Plant yourself where you can bloom...and boom.
Learn to two-step instead of double-speak.
There's a plan.
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