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California vs. Big Oil

In late 2022, Newsom announced an ambitious climate action plan that would slash greenhouse gas emissions by 85% and drop gas consumption 94% by 2045.

After reporting Big Oil made $200 billion in profits in 2022, Newsom accused these companies of “fleecing Californians at the pump” and promised to hold them accountable. State lawmakers are considering capping refining profits.

Speaking at the opening ceremony of New York City's Climate Week in September, Newsom accused oil supermajors of “lying” about climate change. He said: “The climate crisis is, after all, a fossil fuel crisis. They continue to play us for fools. I’ve had enough and I’m sick and tired of this.”

In the same week, California filed a civil lawsuit against five energy giants — Exxon Mobil, Shell, BP, ConocoPhillips and California-based Chevron — accusing them of misleading the public and downplaying how fossil fuels are contributing to climate change.

Chevron CEO Mike Wirth rejected that claim, telling Bloomberg: “Climate change is a global issue. It calls for a coordinated global policy response, not piecemeal litigation that benefits attorneys and politicians.”

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Investment capital in California

The Golden State’s not-so-golden treatment of Big Oil has had a huge impact on its willingness to invest in the nation’s most populous state.

According to Bloomberg, in December, Walz wrote in a filing: “California’s policies have made it a difficult place to invest so we have rejected capital projects in the state.”

He added: “Such capital flight reflects the state’s inadequate returns and adversarial business climate.”

As an investor in the energy industry, O’Leary has rejected California because of its “bad policy [and] weak management” that he claims is “hurting the California economy and people.”

Instead, he would rather pump money into states like North Dakota, Virginia, Oklahoma and Texas because “they’re competing for my money” and have regulatory environments that boost — rather than hinder — energy security.

“Who would give a dime to California to invest in energy when the regulatory environment is so punitive you can't make money?” he said. “That’s what Chevron’s telling everybody.”

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Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.

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