Chevron Slams Gavin Newsom's 'Disastrous' Energy Policy, Flags 'Serious Risks' To California's Economy And Jobs

Chevron Corporation (NYSE:CVX) has voiced concerns over the proposed changes to California’s Cap-and-Invest program, saying that the amendments could potentially disrupt energy stability and employment in the region.

The California Air Resources Board (CARB) proposed new restrictions on greenhouse gas emissions for local businesses earlier this year.

Chevron warns that these changes could pose “serious risks” to the state’s economy and energy security. On Monday, the company issued a letter to policymakers, particularly Governor Gavin Newsom, to reconsider the proposal and support a strategy that protects California’s economic and energy future.

Having operated in California for over a century, Chevron fears that the proposed regulation could devastate the state’s remaining refineries, leading to the collapse of the entire industry. The company anticipates higher transportation and aviation fuel prices for consumers, substantial job losses, and decreased funding for critical public services.

Chevron also pointed out that an increasingly hostile policy environment has already led to recent refinery closures and a nearly 18% reduction in the state’s refining capacity.

Emissions Rules Spark Chevron Concerns

Cap-and-Invest Program, formerly Cap-and-Trade, is a central part of California's strategy to reduce greenhouse gas emissions.

The concerns raised by Chevron come in the wake of the California Air Resources Board (CARB)’s proposed 2026 amendments to the Cap‑and‑Invest Regulation, which focus on tightening emissions limits and updating compliance rules.

Key proposals include:

1. Tighter emissions cap: Reduce the number of allowances issued between 2027 and 2030 to accelerate greenhouse-gas reductions in line with California's climate targets.
   
2. Extension of the program to 2045: Update the regulation to align with state law, extending the carbon market and supporting the state's carbon-neutrality goal by 2045.
   
3. Changes to offset credit use: Allow regulated companies to use carbon offsets for up to about 6% of compliance obligations, with updated rules on eligible offset projects.
   
4. Updates to allowance allocation and market rules: Adjust how allowances are distributed to industries and utilities, and refine auction and compliance mechanisms to maintain market stability.

As the CARB sought public comments on the proposed regulatory changes between January 23 and March 9, Chevron responded via letter.

Chevron President Warns Of California Fuel Crisis

Andy Walz, Chevron Global Refining President, in an interview with Fox Business on Monday, expressed his concerns, stating, “We think the policies they’re putting in place will eliminate all refining in California.”

Notably, California is the only U.S. state where the average gasoline price exceeds $5 per gallon, largely due to higher state taxes, environmental regulations, and special fuel standards. Amid the war involving Iran, the state's average gas price has risen to around $5.20 per gallon.

While Gavin Newsom blames President Donald Trump for rising oil and gas prices amid tensions with Iran, Chevron’s Andy Walz cautioned that gasoline prices in California could rise by $20 per gallon under the proposed tax by 2030. He also expressed concerns that the state could become dependent on imports from South Korea, India, and China for essential energy needs.

“I think that it is a disastrous policy that will make it difficult for people to live their lives in California,” said Walz.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga edit

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