CHEVRON IS WARNING AN UPCOMING VOTE BY STATE REGULATORS COULD COLLAPSE CALIFORNIA’S OIL INDUSTRY. THE CALIFORNIA AIR RESOURCES BOARD IN MAY IS SET TO VOTE ON A PROPOSAL TO UPDATE THE STATE’S CAP AND INVEST PROGRAM. THE PROGRAM REQUIRES OIL COMPANIES TO LIMIT THEIR CARBON EMISSIONS BY ALLOWANCES TO EMIT OR HELP FUND STATE PROJECTS. THE UPDATED PROPOSAL WOULD SET MORE AGGRESSIVE LIMITS ON THE EMISSIONS BETWEEN NOW AND 2030, AND REDUCE THE NUMBER OF ALLOWANCES, CHEVRON OFFICIALS WARN. THIS PROPOSAL WILL TAX IN-STATE PRODUCERS AND REFINERS OF OIL, AND COMPANIES WON’T PAY THE TAX IF THEY BRING THE FUEL IN FROM OTHER COUNTRIES. CHEVRON’S EXECUTIVE, ANDY WALZ, SAID THE PROPOSAL IS PROBLEMATIC GIVEN THE SITUATION IN IRAN RIGHT NOW, AND HE SAYS IT COULD RESULT IN GAS PRICES GOING UP A DOLLAR PER GALLON BY 2030 AND JOB LOSSES ACROSS THE STATE. I KNOW CHEVRON AND OUR COMPETITORS WERE HAVING TROUBLE, YOU KNOW, RUNNING OUR BUSINESS IN THE STATE OF CALIFORNIA. IF THEY ADD THIS BURDEN OF A TAX ON OUR REFINERIES, I THINK IT’S JUST A MATTER OF TIME. IT’S NOT WHETHER OR NOT THEY’LL CLOSE. IT’S JUST WHEN AND IN TERMS OF CHEVRON SPECIFICALLY, I MEAN, ARE YOU ALL BASICALLY THREATENING TO LEAVE THE STATE AT THIS POINT? LOOK, WE HAVEN’T MADE THAT DECISION, BUT IT IS BECOMING. THAT’S WHY I’M TALKING TO YOU. IT’S IMPERATIVE THAT THEY DO SOMETHING. THEY HAVE TO GET IN FRONT OF THIS IS CLOSING. A REFINERY IS NOT A REVERSIBLE DECISION. OKAY, SO IF WE CLOSE AND WE MOVE OUT, IF WE DON’T COME BACK, I’M EXTREMELY WORRIED. I DO THINK WE SHOULD DECLARE AN EMERGENCY IN THE STATE OF CALIFORNIA. I THINK LAWMAKERS NEED TO TAKE THIS SERIOUSLY. IN A STATEMENT, A SPOKESPERSON FOR THE CALIFORNIA AIR RESOURCES BOARD SAID THE CAP AND INVEST PROGRAM IS, QUOTE, THE MOST COST EFFECTIVE WAY FOR CALIFORNIA TO ACHIEVE ITS STATUTORILY MANDATED CLIMATE GOALS. SHE WENT ON TO SAY, WE CONTINUE TO MEET WITH REGULATED ENTITIES THE IMPLICATIONS OF THE PROPOSED AMENDMENTS

Advertisement Chevron executive: 'I think we have a state of emergency in California' Editorial Standards ⓘ

A top official at Chevron is warning that an upcoming vote by California state regulators could be the final straw that collapses the oil and gas industry in the state. The California Air Resources Board in May is expected to consider a proposal to update what's known as the state's "cap and invest" program. At the last-minute last summer, California lawmakers and Gov. Newsom extended the clean air program by another 20 years and directed the air board to update the regulation. The program specifically requires companies considered "polluters" to limit their carbon emissions, buy credits from the state in order to pollute or fund a variety of state projects like the High-Speed Rail. State leaders rushed to renew the program that was set to expire in 2030, pointing to environmental threats from the Trump administration and concerns from investors with risks to the carbon credit market. That situation threatened funds for the state's energy and public transportation projects. The updated proposal by the air board attempts to set more aggressive limits on emissions between now and 2030 and significantly reduce the number of credits companies can buy to pollute. The air board is accepting public comment on the proposal through Monday, March 9.In an interview with KCRA 3 on Thursday, Chevron's President of Downstream, Midstream and Chemicals Division Andy Walz said the proposal ends up basically adding billions in costs to companies refining and producing fuel in-state. He said companies importing fuel from other countries would avoid the added costs.He noted relying on foreign imports is problematic given the geopolitical situation right now in the Middle East and the war in Iran. The air board's proposal comes as two refineries shut down in California and as about 70% of the state's oil supply is shipped in from other countries. State data shows 90% of registered cars in California still rely on gas. In a letter to Gov. Gavin Newsom and other state leaders earlier this week, Walz warned gas prices could jump more than a dollar per gallon by 2030 under the air board's proposal and said it could result in major job losses. "I know Chevron and my competitors are having trouble running a business in the state of California. If they add this burden of a tax on our refineries, I think it's a matter of time. It's not whether or not they'll close, it's when," Walz said in the interview with KCRA 3. When asked if Chevron is threatening to leave the state, Walz said the company has not yet made a decision. Walz said state leaders must get in front of the issue. "I am extremely worried. I do think we have an emergency in the state of California. I think lawmakers need to take this seriously," Walz said. When asked if the federal government should get more involved in the state's oil and gas situation, Walz pointed to the 32 military bases in California. "It is an importance to national security to have the fuel those facilities need," Walz said. "I hope the federal government can get involved because we need all actions. This is not just a California thing; this is about national security." In a statement to KCRA 3 on Thursday, a spokeswoman for the air board said the program "is the most cost-effective way" for California to achieve its climate goals that are required under state law. "We continue to meet with regulated entities to make sure we fully understand implications of the proposed amendments," the air board's Lindsay Buckley said in part in a lengthy statement. Buckley said the updated proposal would provide "statewide benefits" over the next 20 years totaling $180.7 billion, including $123 billion in avoided health costs as a result of improved air quality. The air board has also estimated $485 billion "in global savings due to avoided climate damages." The air board also said the proposal is projected to provide $56 billion to benefit utility ratepayers and $37 billion in climate investments. The air board's statement did not acknowledge the situation in Iran directly or include an estimate on the impact on energy and fuel prices.The proposal will be formally presented at the end of May. See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channelPHNjcmlwdCB0eXBlPSJ0ZXh0L2phdmFzY3JpcHQiPiFmdW5jdGlvbigpeyJ1c2Ugc3RyaWN0Ijt3aW5kb3cuYWRkRXZlbnRMaXN0ZW5lcigibWVzc2FnZSIsKGZ1bmN0aW9uKGUpe2lmKHZvaWQgMCE9PWUuZGF0YVsiZGF0YXdyYXBwZXItaGVpZ2h0Il0pe3ZhciB0PWRvY3VtZW50LnF1ZXJ5U2VsZWN0b3JBbGwoImlmcmFtZSIpO2Zvcih2YXIgYSBpbiBlLmRhdGFbImRhdGF3cmFwcGVyLWhlaWdodCJdKWZvcih2YXIgcj0wO3I8dC5sZW5ndGg7cisrKXtpZih0W3JdLmNvbnRlbnRXaW5kb3c9PT1lLnNvdXJjZSl0W3JdLnN0eWxlLmhlaWdodD1lLmRhdGFbImRhdGF3cmFwcGVyLWhlaWdodCJdW2FdKyJweCJ9fX0pKX0oKTs8L3NjcmlwdD4=