Chevron headquarters leaves California for Texas after 145 years – Daily News

Authors: David Wethe, Karen Breslau and Kevin Crowley | Bloomberg

Chevron Corp., which has been headquartered in California since the days of kerosene lamps, is moving its headquarters to Texas after years of battling the Golden State over strict environmental policies and costly regulations.

The move announced Friday will end the company’s 145 years in the nation’s most populous state. The change prompted Texas Gov. Greg Abbott to welcome Chevron to its “true home,” while a spokesman for his California counterpart, Gavin Newsom, dismissed it as the “logical culmination” of the oil giant’s years-long transformation.

Chevron has previously restricted new refining investments in California, citing “confrontational” government policies in a state that has some of the strictest environmental regulations in the U.S. In January, refining chief Andy Walz warned that the state was playing a “dangerous game” with climate regulations that threatened to drive up gasoline prices.

CEO Mike Wirth dismissed suggestions the decision to move was politically motivated, saying it was “really about being closer to the heart of our industry.”

“We’ve had some policy differences with California,” Wirth told Bloomberg Television in an interview. “But this isn’t a move about politics. This is a move about what’s good for our company to compete and perform.”

The announcement comes after Chevron reported disappointing second-quarter results and announced changes to its senior management team that are apparently aimed at improving results.

Wirth noted that Texas is home to a vast network of resources critical to Chevron’s business, from equipment suppliers to universities that the company uses to conduct research and recruit talent.

“Houston is the energy capital of the world,” he said. “It’s a natural place for companies in our industry to have their home office and headquarters.”

Chevron joins a long list of California emigrants that includes Oracle, Hewlett Packard Enterprise and Tesla. While the former tech giants’ migration out of Silicon Valley has been largely driven by tax and cost-of-living concerns, Chevron has clashed with state leaders over increasingly stringent fossil fuel regulations.

Newsom ran for reelection in 2022 promising to wage war on Big Oil, calling for a special legislative session and asking lawmakers to impose a “price gouging” tax on oil companies. That was later watered down to a task force investigating excessive profit margins.

“This announcement is the logical culmination of a long process that Chevron has repeatedly announced,” Alex Stack, a spokesman for the governor, 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.”

Wirth has been extolling the benefits of the Lone Star State’s business climate for at least half a decade.

“California politics have become quite restrictive on many business fronts, not just the environment,” he said during a speech in Houston in 2019.

Electric vehicles, renewable energy sources

California has long been an unlikely state for an oil company to call home. It pioneered a drive to curb emissions in the 1960s and has adopted radical climate measures, including a goal for California to become net zero by 2045, five years ahead of the rest of the United States.

Frequent droughts and wildfires mean the state is already suffering the devastating effects of climate change. California accounts for more than a third of the nation’s electric vehicle sales. And nearly all of America’s renewable diesel, made from vegetable oil and natural fats, is consumed in California.

California once played a major role in the U.S. oil sector, but oil production has declined for most of the past four decades while shale-rich states like Texas and New Mexico have seen oil production boom.

“Chasing jobs and employers out of California is no way to run an economy,” said Jim Wunderman, president and CEO of the Bay Area Council, a business group. “It’s a disgrace.”

Low taxes, business-friendly regulations and a relatively low cost of living have made Texas the most desirable place for companies to relocate over the past decade, the Federal Reserve Bank of Dallas reported in February. The state saw a net migration of 7,232 companies and the creation of nearly 103,000 jobs between 2010 and 2019.

Chevron already employs about 7,000 workers in the Houston area, while the San Ramon, California, plant has about 2,000.

“We have a large business footprint in Texas, which is now larger than our business footprint in California,” Wirth said. “For many, many years, that wasn’t the case. California was our home, it was our birthplace.”

– With assistance from Ruth Liao, Alix Steel and Mitchell Ferman.