Chevron Warns California About Its Climate Plan

Chevron is warning California leaders that proposed changes to the state’s climate regulations could force remaining refineries out of the state, potentially driving gasoline prices sharply higher and costing hundreds of thousands of jobs.

In a letter to California Gov. Gavin Newsom and the California Air Resources Board (CARB), Chevron President Andy Walz expressed “deep concerns and strong opposition” to amendments proposed for the state’s Cap-and-Invest program, formerly known as cap-and-trade.

Walz said the changes could increase gasoline prices by more than $1 per gallon by 2030 and threaten the survival of California’s remaining refining industry.

Chevron estimates that nearly 537,000 petroleum jobs in California could be affected if the proposed regulations are approved.

Meanwhile, Nevada faces a direct fallout from the approval of the regulations as refineries relocate from California to places like Texas, which has no pipeline access to the Silver State.

CARB officials say the proposed regulatory changes are tied to statutorily mandated climate targets, limiting the agency’s flexibility to alter the plan without legislative action.

Supporters of the policy argue that stricter emissions limits are necessary to meet California’s long-term climate commitments and transition away from fossil fuels.

Chevron, however, argues the policy could accelerate the closure of the state’s already shrinking refining sector.

California currently has seven operating refineries, a number that has declined in recent years following closures and conversions to renewable fuel production. Chevron operates two of the remaining facilities in the state.

The dispute also highlights long-running debates over the authority of California regulatory agencies.

Critics argue that CARB and other state bodies, including the California Public Utilities Commission, the State Water Resources Control Board, Coastal Commission, California Energy Commission, and CalEPA, operate with limited direct oversight from the Legislature.

Republican lawmakers have previously introduced legislation seeking greater legislative control over CARB’s activities, particularly surrounding the state’s carbon market.

Western Climate Initiative Inc., a nonprofit corporation created by CARB to manage cap-and-trade auctions, is registered in Delaware, which critics say places its meetings outside California’s open-meeting laws. Supporters of the structure said it allows the state to coordinate carbon markets with other jurisdictions participating in the regional trading system.

The dispute comes amid growing uncertainty in global energy markets.

California already relies heavily on imported petroleum, as the state taxes in-state oil production but not imports. Industry analysts warn that continued refinery closures could further increase dependence on overseas fuel shipments.

Petroleum industry expert Mike Ariza said California is increasingly receiving fuel shipments connected to international supply chains that include China.

He also noted that global supply disruptions, including tensions in the Middle East and potential geopolitical conflicts in Asia, could further complicate the state’s energy outlook.

Chevron’s letter frames the issue as a broader economic risk, arguing the regulations could destabilize California’s fuel market while driving up costs for transportation, aviation, and consumer goods.

Whether the proposed CARB amendments move forward remains uncertain, but the debate underscores the growing tension between California’s aggressive climate policies and the economic role of its remaining oil industry.