Chevron Heads to Houston – Time for the Insults

SACRAMENTO, Calif. — Chevron said its announcement Friday that it is moving its headquarters from San Ramon, Calif., to Houston was not about politics.

Politicians didn’t get the memo.

Texas Republican Gov. Greg Abbott was quick to call the move a “snub” to California in a message posted on X, calling Texas the company’s “true home,” adding: “Drill, baby, drill.”

Democratic Gov. Gavin Newsom, meanwhile, posted — and later deleted — a short video explaining what he called “price gouging” by Big Oil. His message said that Big Oil was scheming for profit and that California had passed a law to “put a stop to it,” followed by a melting-face emoji representing Big Oil’s response.

His press workshop says it differently.

“This announcement is the logical culmination of a long process that has been announced repeatedly by Chevron,” spokesman Alex Stack said in a statement. “We are proud of California’s position as a leading creator of clean energy jobs, a critical part of our diverse, innovative and dynamic economy.”

Newsom’s office did not immediately say Friday why he deleted the post, but the back-and-forth reflects the balancing act the governor is engaged in as he pursues a nationally-leading climate transition while trying to avoid price disruptions and deflect political attacks over California’s high cost of living.

Newsom has gone after refiners’ profits with a proposed penalty, announced a plan to phase out sales of new gasoline-powered cars by 2035 and launched a lawsuit aimed at holding Big Oil accountable for climate damage.

According to Rob Lapsley, president of the California Business Roundtable, of which Chevron is a member, Newsom and lawmakers themselves are responsible for Chevron’s decision. “They’ve clearly decided that fossil fuels are going to lose,” he said. “So they have to deal with all of these regulatory impacts.”

Chevron, the nation’s second-largest oil company behind ExxonMobil, said in February it was cutting its future profit forecast by about $1.8 billion. It warned California it could shut down operations there if unfavorable policies cut into its profits too much.

That’s not what happened today, spokesman Ross Allen said. The company will continue to operate two of the state’s nine remaining refineries, continue to pump oil out of the ground and leave its 1,800 gas stations in place. The only immediate impact will be the transfer of CEO Mike Wirth and Vice President Mark Nelson to Houston, where Chevron already has about 7,000 employees, this year, with most of the other 2,000 employees in San Ramon following over the next five years.

The company’s announcement comes two weeks after Elon Musk announced he would move X and SpaceX’s headquarters to Texas, a decision Musk said the company would make based on a California policy that prohibits schools from disclosing children’s transgender identities to their parents.

Wirth said today on Bloomberg TV that the relocation simply made sense, given the company’s extensive operations in the region and Houston’s status as the “energy capital of the world.”

“It’s really about concluding a process that was underway,” he said.

But a bigger battle is looming. The company has accused the city of Richmond, where voters are set to vote this fall on a $1-per-barrel tax on Chevron’s refining plant, of “playing chicken” with one of its largest taxpayers and employers.

Shutting down the refinery, as the company has suggested, would hurt California’s supply, something the state cannot afford if it wants to keep gas prices stable, the California Energy Commission said in a report released yesterday. There are other factors beyond the referendum initiative that Chevron would have to consider, including the significant costs of shutting down and cleaning up the refinery and plugging and abandoning its thousands of wells in the state.

But the nuclear option, which involves abandoning mining and refining for the California market, remains on the table. Andy Walz, Chevron’s president of Americas products, who was promoted Friday to president of downstream, midstream and chemicals, said in an interview last week that the company was still studying its options.

“I’m not going to tell you it’s the end of the road, but we’re getting close,” he said of the Richmond proposal. “We’ve been in California for 140 years, we’d like to stay here, we think we’ve been a good supplier to people for a long, long time. We think it’s critical that people have a reliable, affordable supply. But if I can’t invest there and I can’t get a return on my investment, we’ll move on.”

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