Chevron moves to Texas, says California policies discourage investment and hurt consumers

Chevron (NYSE: CVX) shares turned negative for the year after the company reported second-quarter earnings that fell 26% over the past year to $4.43 billion. They missed Wall Street expectations, largely due to lower refining margins and refinery maintenance during periods when margins were higher.

CEO Mike Wirth said he remains optimistic about Chevron’s (CVX) $53 billion takeover bid for Hess, even though arbitration hearings in a dispute with Exxon over Hess’ 30% stake in a joint venture involving energy resources offshore Guyana are still almost a year away.

But perhaps the biggest stir was caused by Chevron’s (CVX) decision to move its headquarters from California, where it had been for more than 140 years, to Houston after the state’s climate regulations began to create challenges for the company.

“We believe that California has a number of policies that raise costs, hurt consumers, discourage investment and ultimately we believe that it is not good for the California economy or for consumers,” Wirth said. Wall Street Journal in the interview.

Just last year, California Attorney General Rob Bonta sued Chevron (CVX) and other major oil companies, claiming they misled the public about their role in climate change.

In January, Chevron (CVX) said it would write down $4 billion of assets, mostly in California, citing regulatory concerns. It also warned of a state-imposed “margin penalty” that aims to cap refiners’ profits to prevent alleged price gouging.

Gov. Gavin Newsom signed a law this year that gives the California Energy Commission oversight authority over oil companies to identify potential price gouging and impose appropriate penalties.

California’s oil production has fallen by more than half in the past decade, and many refineries have closed. As a result, gasoline prices in the state have risen $1.16 a gallon above the national average.

“California regulators want to take over an industry to mitigate the costs of their own destructive policies. No wonder Chevron is running for its life” WSJ written in an editorial.