Rhetoric surrounding Chevron's move exposes oil industry's deceptiveness

Chevron Corporation recently announced it will move its headquarters from California to Texas. While the move has little legal import, it was a big PR moment for Big Oil.

Chevron CEO Mike Wirth cited California's world-leading environmental and climate programs as the main reason for its move. The implication, long central to Big Oil's messaging, is that the rules Chevron dislikes have led to the industry's decline and are bad for California's people and economy.

But no one should be fooled by this latest salvo from a historically deceptive industry.

Examining the energy and environmental regulatory landscape in California and Texas shows why California's policies to protect its residents and our climate from oil industry pollution and disinformation are so critical.

California, like Texas, has long been an oil state. Chevron's earliest predecessor incorporated in San Francisco in 1879. In 1930, California produced one-quarter of the world's oil. But since 1985, oil production has declined by more than 70%, with the rate accelerating in recent years.

This decline is not because of environmental regulations. California's oil reservoirs are simply tapped out and the industry is at the tail end of its lifecycle.

Meanwhile, decades of oil drilling have saddled the state with the potential for billions of dollars in clean-up costs and damage control. The estimated price tag to clean up the state's more than 100,000 unplugged oil and gas wells and associated infrastructure is more than $20 billion.

The oil industry is legally obligated to foot the bill. But the state has financial assurances for less than 1% of those costs. And experts believe the oil industry as a whole won't generate nearly enough cash from its California operations to pay for clean-up here. But California is taking important steps to make operators like Chevron, which operates about 26,000 oil and gas wells in California, remediate their wells.

Even the high price of cleaning up California's old wells is dwarfed by the cost of climate damage hitting our state from the use of oil, gas, and coal, which are responsible for over 90% of carbon dioxide emissions.

California's Fourth Climate Assessment conservatively estimates that California faces at least $113 billion per year in climate change costs by 2050 -- from events like sea-level rise, flooding, extreme heat, and wildfire. 

Moreover, extracting and burning oil and gas pose grave threats to people's health, which carries its own high price. The closer someone lives, learns or works to a well or refinery, the worse the harm, including higher risks of cancer and damage to the heart, lungs or nervous system.

To address these crises, California is taking three powerfully protective steps.

First, California has sued Big Oil to recover for the damage done to our state from its decades of deception and obstruction of solutions to the climate crisis. The People of the State of California ex. Rel. Rob Bonta, Attorney General of California v. Exxon Mobil Corporation et al., S.F. Super. Ct., 2024, No. CGC-23-609134. As alleged in the complaint, oil executives lied for decades about how fossil fuels are destroying our climate, protecting their own profits while sticking taxpayers with the bill for the harms.

These companies have plenty of money to pay for the damage they've done. Over the past three years alone, Chevron and Exxon reported over $72 and $114 billion in profits, respectively.

California is further holding Big Oil accountable through its new price-gouging penalty law. Senate Bill X1-2 (2023, Skinner). For far too long, industry has hiked California gasoline prices and raked in exorbitant profits, all while blaming environmental regulations for the pain at the pump. The law is now providing transparency and protecting consumers from industry profiteering. 

Second, California has enacted the country's largest health-and-safety buffer for oil and gas drilling. Public Resources Code Sections 3280 et seq. After decades of oil companies drilling at will, the law now prevents harmful new drilling within 3,200 feet of homes, schools, hospitals and other community sites.

Third, California is banning hydraulic fracturing, or fracking, an extreme extraction method associated with numerous health and environmental harms. California has not issued a permit to frack since 2021, and will formally prohibit fracking through a regulation to take effect in October.

Together, the health buffer and fracking ban will improve Californians' health and environment and save money in healthcare costs and lost school and work hours.

Big Oil claims health and climate protection hurts California economically, ignoring the fact that the world's fifth-largest economy has six times more clean energy jobs than fossil fuel jobs, and is home to one-quarter of renewable energy jobs nationwide.

Unlike California, Texas has chosen to put its head in the sand. Texas sits on one of the world's biggest carbon bombs -- the Permian Basin. But the Lone Star State has taken no action to hold climate-heating polluters accountable despite leading the nation with the highest number of billion-dollar climate disasters.

Hurricane Beryl, which killed 37 people in July and cost upwards of $6 billion, is only the latest example of 186 confirmed billion-dollar climate disasters affecting Texas since 1980. The total estimated costs of these are over $400 billion.

Moreover, after hundreds of local governments in Texas enacted health buffers and other protections, the Texas Legislature preempted such protections in 2015. Texas Natural Resources Code Section 81.0523. That leaves Texans without the most basic, commonsense safeguards from health harms and associated costs.

The Texas oil regulator is under scrutiny for failing to oversee proper plugging of "orphan" oil wells -- those without a financially solvent operator -- after a flurry of blowouts and leaks across West Texas. And the U.S. Environmental Protection Agency is investigating whether to revoke the regulator's oversight of wells used for injecting oilfield wastewater and carbon dioxide after a petition raised "substantial concern" over risks to water supplies.

Chevron has long had a major presence in both the Golden and Lone Star states. Moving its headquarters to Texas does nothing to change its liability or responsibility to comply with California's environmental laws, no matter how much it dislikes them.

All the move does is highlight the vital protections California has enacted to minimize the damage this dangerous industry does on its way out the door. Texas would be wise to follow suit before its bill comes due.