Chevron Warns of Irreversible Harm to California’s Economy and Energy Security in Letter to gov. Newsom

ENB Pub Note: This article is from Katy Grimes, the Editor in Chief of the California Globe, and I will be interviewing one of her oil experts next week on this topic on the Energy News Beat Podcast. 

Chevron just sent a letter to California Governor Gavin Newsom and the California Air Resources Board warning them of deep concerns and strong opposition to the CARB- proposed amendments to the Cap-and-Invest (formerly cap and trade) regulation, that the state’s few remaining refineries can’t survive, and the California economy could be crippled.

“The proposed regulation will cripple the survivability of the state’s remaining refineries, which will result in California losing the entire industry to this misguided program. This regulation will increase transportation and aviation fuel prices for consumers. It will risk significant job losses, including many high-paying union jobs, while reducing funding for essential public services. It will upend California’s fuels market and threaten critical energy and national security assets.”

Over the weekend, the Globe reported that PBF Energy Inc. also warned CARB about “the stark reality the impacts the current CARB Cap & Investment program would have because of the state’s remaining 7 refineries. And, CARB’s “Proposed Amendments will only worsen the current state of the program, making costs skyrocket further. If enacted as written, the Proposed Amendments will inevitably drive in-state refining capacity to zero.”

The gist of Chevron’s message to the governor and Air Resources Board is that California’s economy and energy security cannot survive another refinery shutdown.

What is Cap and Invest (formerly cap and trade)?

California’s cap-and-trade (invest) program places a “cap” on aggregate greenhouse gas emissions from businesses and utilities deemed “polluters” by the California Air Resources Board, which the CARB dubiously claims are responsible for most of the state’s greenhouse gas emissions.

The California Air Resources Board (CARB) has taken a great deal of liberty, particularly with its interpretation of AB 32, California’s Global Warming Solutions Act of 2006. The CARB devised the cap-and-trade system whereby it holds a quarterly auction program requiring selected California employers to bid significant amounts of money for the privilege of continuing to pollute — or be faced with closing their doors.

The Air Resources Board issues carbon allowances, and businesses are forced to buy or sell these in the open market. Several other countries including Spain and Australia have already acknowledged carbon taxing does not work, but California’s Air Resources Board, Democrats, and Gavin Newsom stubbornly continue on with carbon taxing – not because they are true believers – because it’s a revenue-generating tax.

The CARB continues to push for more stringent regulations and taxes on California businesses and taxpayers, and lie that the goal is a reduction in greenhouse gasses. This is just another sizable tax on businesses. And instead of actually reducing carbon emissions through the cap and trade program, a business can merely purchase the get-out-of-jail credits to be able to continue (polluting) doing business.

It’s really just a shakedown of California businesses.

Oil and gas and energy producers warn that the CARB’s latest proposed regulations will increase costs on all refiners will devastate the state’s energy economy.

In the letter, Chevron President Andy Walz cautions that the price of gasoline will increase by more than a dollar a gallon by 2030 as a result of this regulatory change, as well as 536,770 petroleum industry jobs could be lost in the state if CARB’s proposal is authorized.

Walz continues:

The California energy industry’s economic, industrial, environmental, and national security benefits have been the foundation of a healthy, prosperous state and nation. Adversarial policies at local, regional and state levels have eroded that foundation. These proposed regulatory changes threaten to destroy it. Chevron urges policymakers and regulators to reconsider and revise the proposed regulation before it causes lasting and irreversible harm to California’s economy and energy security and broader vital American interests.

As the Globe has reported for years, CARB operates like no other state agency. The rogue agency conducts its business in private, without the scrutiny of the public it is accountable to. Despite legislative and public outrage over the shroud of secrecy at CARB, then-Assembly Speaker John Perez was said to have crafted the language for SB 1018, which specifically exempted CARB from open meeting rules in cap-and-trade auctions, allowing CARB’s WCI Inc. to manage carbon trading auctions without any public scrutiny.

Gov. Newsom says “CARB oversees CCI, which puts cap‑and‑trade dollars to work reducing greenhouse gas emissions, strengthening the economy, and improving public health — particularly among communities and households facing greater economic and environmental challenges,” it’s a shakedown of businesses the CARB deems “polluters” to pay for their unproved climate programs across the state.