Chevron’s warning on fuel: California’s green – Latest News
Chevron, the vitality company that started relocating its headquarters from the Bay Area to Texas in 2024, wrote a letter Tuesday to Gavin Newsom’s workplace warning in regards to the proposed modifications to the state’s Cap-and-Invest rules.
The industry giant warned that if enacted, the new rules will “cripple the survivability of the state’s remaining refineries.”
Chevron additional predicted that “the price of gasoline will increase by more than a dollar a gallon by 2030 as a result of this regulatory change.”
Under Cap-and-Invest rules, that are set by the California Air Resources Board (CARB), firms should maintain enough allowances to match the amount of their greenhouse gasoline emissions.
According to the authors, because of this “refiners and retailers cannot simply buy gasoline from other states in a pinch to meet demand.” Getty Images
If firms shouldn’t have enough of these permits, they’re required to buy more, both via CARB’s quarterly auctions or via personal transactions.
The proposed modifications to the Cap-and-Invest guidelines would raise the price of these allowances, dramatically affecting the flexibility of refineries to operate within the state.
This scenario is made even more precarious by California’s strict environmental requirements, which successfully require that fuel should be refined within the state.
In a 2024 coverage report, Robert J. Michaels and Independent Institute Senior Fellow Lawrence J. McQuillan discovered that as a consequence of stringent rules, California is actually a “fuel island,” cut off from the remaining of the nation.
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According to the authors, because of this “refiners and retailers cannot simply buy gasoline from other states in a pinch to meet demand.”
In 2022, the California Energy Commission revealed that over 70 p.c of the state’s crude oil is imported from elsewhere, however that the overwhelming majority of refined fuel is produced in-state.
Moreover, over the previous couple of years, a number of main oil refineries in California have closed or begun the method of closing. As these refineries have wound down operations, gasoline costs in California have already elevated.
Forty years in the past, there have been 42 refineries within the state, however there’ll quickly be solely 11. This trend is more likely to speed up if proposed modifications to current rules are enacted.
This implies that if the remaining refineries within the Golden State have been to close, as a consequence of Cap-and-Invest, the financial penalties can be devastating.
Chevron reminded Newsom and CARB that there are nonetheless over half a million fossil fuel industry jobs in California, and that the industry contributes $64 billion in federal, state, and native taxes.
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That’s a lot at stake.
Moreover, with out refineries in California that produce a mix that adheres to the state’s rules, refined fuel must be imported from a few choose areas, equivalent to Asia, dramatically lowering the availability of fuel within the state.
With the highest gasoline tax within the nation, California already has probably the most costly gasoline costs out of all fifty states—roughly $4.80 per gallon in March 2025.
In the previous, Newsom has tried accountable Chevron and different oil firms for high gasoline costs, accusing them of “gouging.”
But taxes and regulatory prices make up properly over $1 per gallon of the gasoline price in California. As of December 2025, these prices contributed to $1.28 of per gallon fuel prices, or roughly 30 p.c of the then sticker price.
The burden of these prices isn’t shared equally. Low-income populations are likely to spend a bigger portion of their income on fuel bills, which implies that these insurance policies successfully perform as a regressive tax.
For a state that champions itself on being progressive and supporting on a regular basis Californians, these insurance policies do the precise reverse.
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The burden of these insurance policies will solely be additional amplified by the battle in Iran, which has already raised the price of crude oil by 15 p.c.
The Chevron warning shouldn’t be taken evenly. Fuel and transportation are the spine of economies; to jeopardize fuel security is to threaten financial stability.
Repeatedly, from its insurance coverage rules to its fuel rules, the Golden State has proven what occurs when regulators attempt to overregulate markets.
Chevron’s letter additionally reminded the governor that raising the price of fuel, and constricting provide, may hurt national security.
California’s ports and airports, and the federal army amenities within the state, need fuel to perform. They get it from the identical refineries that customers do.
The new “green” rules may put our whole nation at risk.
Perhaps that’s the message that can lastly get via to a would-be commander-in-chief.
Kristian Fors is a analysis fellow with the Oakland-based Independent Institute and director of the California Golden Fleece Awards.
