Chevron, the energy company that beganrelocatingits headquarters from the Bay Area to Texas in 2024, wrotea letterTuesday to Gavin Newsom’s office warning about the proposed changes to the state’sCap-and-Investregulations.
The industry giant warned that if enacted, the new regulations will “cripple the survivabilityof the state’s remaining refineries.”
Chevron further predicted that “theprice of gasolinewill increase by more than a dollar a gallon by 2030 as a result of this regulatory change.”
Under Cap-and-Invest regulations, which are set by theCalifornia Air Resources Board(CARB), companies must hold sufficientallowancesto match the volume of their greenhouse gas emissions.
If companies do not have enough of these permits, they are required to purchase more, either through CARB’squarterly auctionsor through private transactions.
The proposed changes to the Cap-and-Invest rules would raise the price of these allowances, dramatically affecting the ability of refineries to operate in the state.
This situation is made even more precarious by California’s strict environmental standards, which effectively require that fuel must be refined within the state.
In a2024 policy report, Robert J. Michaels and Independent Institute Senior Fellow Lawrence J. McQuillan found that due to stringent regulations, California is essentially a “fuel island,” cut off from the rest of the country.
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According to the authors, this means that “refiners and retailers cannot simply buy gasoline from other states in a pinch to meet demand.”
Source: California Post – Breaking California News, Photos & Videos
