After two and a half decades of what many in the oil and gas industry label as an unfriendly business atmosphere, California is taking steps to stop companies from packing their bags and leaving.
Facing refinery closures and a sharp rise in fuel prices, with regular gas hitting $4.65 per gallon—well above the national average of $3.17—Governor Gavin Newsom recently signed a pivotal piece of legislation aimed at revamping local oil production. The new law allows for the expedited approval of 2,000 new wells each year in Kern County, a key spot for oil extraction in the state.
Chevron’s president of Americas products, Andy Walz, shared his views on FOX Business, stating that the oil refining sector has faced significant pressure to flee California, describing the situation as a “tyranny” persisted over the span of 25 years.
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Last summer, Walz discussed Chevron’s recent move from California to Texas, emphasizing the complexities of operating in California. “It’s a challenging environment for recruiting and relocating employees. A significant number of our staff advance internally through various roles, but a lot of folks are unwilling to move to California, creating hurdles in operations,” he pointed out.
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FOX Business reached out to the office of Governor Newsom for their take.
In response to California’s newfound push to be accommodating, Lauren Simonetti from FOX Business Network conveyed skepticism about the state’s approach, expressing that Chevron isn’t particularly hopeful.
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The price at the pump isn’t the only issue. The number of working refineries in California will be cut to 11 after Valero and Phillips 66 close down their facilities, from a peak of 40 refineries back in 1983. This costly shrinkage means California has begun to depend on foreign oil sources for approximately 75% of its supply.
In light of these developments, Governor Newsom commented that this legislation will help prevent drastic spikes in gas prices by ensuring a stable supply of locally produced petroleum and enhancing the state’s transportation fuel options.
Original article source:California’s Battle to Keep Oil and Gas Companies Afloat
