Major Oil Company Is the Latest of 300 Companies to Ditch California for Texas

This huge decision has already prompted some California business leaders to blame Governor Gavin Newsom and the state’s increasingly strict environmental policies and regulations.

Now, all of that has seemingly come to a head, as Chevron has announced it is moving its headquarters to Texas.

Chevron, the second-biggest U.S. oil company, said clashes with authorities over climate policies and penalties have made operations in the Golden State unworkable. Chevron has said these policies have rendered California “closed for business.”

The oil company reported earnings of $4.4 billion in the second quarter of this year. This equates to $2.43 per share. In the same quarter of the previous year, Chevron made $6 billion. Chevron has also announced the retirement of three executives.

Their shared history dates back to the establishment of the Pacific Coast in the 1870s. The group was later absorbed into JD Rockefeller’s Standard Oil. After this corporation broke up, it became Standard Oil of California in 1911. The company was based in San Francisco for decades before moving its corporate offices to San Ramon in 2001.

The headquarters will move from the Californian city of San Ramon to Houston by the end of the year. Chevron said this relocation will “enable better collaboration and engagement with executives, employees and business partners.” The company anticipates “minimal immediate relocation impacts” from this move.

Chevron’s move comes after many other major companies have decided to leave California behind for the business-friendly state of Texas.

Texas does not have a corporate tax and functions with minimal government intervention on businesses. Texas is a lot more attractive to Chevron than California, with a 9% corporate tax. Abbott welcomed Chevron on X, where he wrote: “WELCOME HOME Chevron! Texas is your true home. Drill baby drill. Chevron, in snub to California, to move its headquarters to Houston.”

Instead, Newsom said this was a “logical culmination” of many years of Chevron transitioning away from California.

However, Chief Executive Officer Mike Wirth has explained that it has nothing to do with politics. Instead, he said, “It’s really to be closer to the core epicenter of our industry.”

Most of these corporations are coming from California. Other major companies include HP, CBRE and Tesla. The economic boom these relocations have caused has made Texas the eighth-largest economy in the world, ahead of Canada, Italy and Russia.

“We’ve had some policy differences with California,” Wirth said. “But this isn’t a move about politics. It’s a move about what’s good for our company to compete and perform.”

“Houston is the energy capital of the world,” Wirth stated. “It’s a natural place for companies in our industry to have their home office and headquarters.”

Chevron said it will gradually move all corporate operations to Houston over five years, with only positions supporting functions in California remaining.

Recently, Chevron has even slashed brand new investments in California refining, as the company has stated that it can no longer complete these investments because of “adversarial” government policies.

According to Walz, California’s strict climate policies could threaten gasoline prices, forcing them to skyrocket around the country.

Chevron criticized California’s “increasingly harsh regulatory environment” in January. California has also sued oil companies for allegedly deceiving customers over the risks of climate change and calling on groups to surrender their profits. One of these oil companies was Chevron.

“Setting a margin penalty would absolutely discourage investments here,” said Andy Walz, president of Americas products at Chevron, in a letter to the California Energy Commission in December.

Jim Wunderman, the president and CEO of the Bay Area Council, stated, “Chasing jobs and employers out of California is no way to run the economy. It’s an embarrassment.”

“These arbitrary attacks on a disfavored industry do more than this — they signal to every industry, entrepreneur, manufacturer and employer that California is closed for business,” Walz wrote.

In previous decades, California’s growth was based on the aerospace industry, petroleum and agriculture. It has since left manufacturing to other countries overseas. For now, California remains the seventh-largest producer of oil among the 50 states.

In fact, it now accounts for just 2% of the U.S. total. California is prepared to sacrifice the rapid economic growth from oil refineries to become America’s center for the electric vehicle industry. At least, Newsom’s long-term renewable energy goals and margin penalties on oil companies suggest that.

Chevron, meanwhile, already has about 7,000 workers in Houston, Texas. By comparison, before this move was announced, the company had 2,000 in California.

Sarah Elkind, a San Diego University history professor, said: “It’s unfortunate corporations will relocate their workforces in places that have fewer environmental regulations rather than working in ways that lead to healthy and vibrant communities.” Others have said that oil and gas shaped California into what it is today, and it will be sad to see the industry leave the Golden State.

“This announcement is the logical culmination of a long process that has repeatedly been foreshadowed by Chevron,” Stack explained. “We’re proud of California’s place as the leading creator of clean energy jobs – a critical part of our diverse, innovative, and vibrant economy.”