One of America’s largest oil companies is set to move its headquarters out of California, citing opposition to “harsh” green policies.
On Friday, Chevron announced its relocation to Houston, Texas, ending a historic association with California dating back to the 1870s.
Chevron’s decision comes after repeated warnings from executives that stringent environmental regulations and other actions by the Californian government have made business operations increasingly difficult.
Chevron is the latest oil company to leave the state, following similar moves by other employers like Elon Musk’s SpaceX, which also relocated after disputes with state authorities over new legislation.
In January, Chevron wrote down up to $4 billion (£3.1 billion) from the value of its assets in California, citing the “increasingly harsh regulatory environment” as a deterrent to investment.
Andy Walz, a senior Chevron executive, warned at the time: “These arbitrary attacks on a disfavored industry … signal to every industry, entrepreneur, manufacturer, and employer that California is closed for business.”
Chevron’s CEO, Mike Wirth, stated that the company plans to complete the relocation of its headquarters, currently in San Ramon, by the end of this year.
Elon Musk has also moved the headquarters of his companies Tesla, SpaceX, and X (formerly Twitter) out of California following disputes with authorities over his Tesla bonus package and “woke” laws that allow schools not to inform parents if their child identifies as transgender.
Musk’s businesses are among hundreds that have relocated to Texas, a major oil production hub that has positioned itself as business-friendly. Notable companies making the move include HP, Toyota Motor North America, Kubota Tractor Corporation, Charles Schwab Corporation, and CBRE Group.
In this context, Texas has become one of the world’s largest economies, surpassing some G7 nations.
Despite California’s long and profitable association with the oil industry, the state has progressively implemented stricter regulations on gasoline, oil permits, and air pollution since the 1970s. This shift followed several environmental disasters, such as the 1969 Santa Barbara oil spill.
In a recent high-profile move, Democratic Governor Gavin Newsom sued Chevron, ExxonMobil, Shell, BP, and ConocoPhillips last year, accusing them of “lying to consumers for more than 50 years” about climate change.
This clash has led to an exodus of oil companies. Last year, ExxonMobil and Shell ceased onshore production in California, and Chevron significantly reduced new investments in the state.
Since 2018, Chevron’s crude oil production in California has plummeted from 161 million barrels per year to 94 million.
