Chevron warns Newsom's cap-and-invest plan will destroy California's refining industry

Chevron says proposed amendments to the state's climate program will cripple the state's remaining refineries and lead to higher fuel prices for consumers.

Published on Mar. 6, 2026

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Chevron has warned Governor Gavin Newsom and the California Air Resources Board that proposed amendments to the state's Cap-and-Invest program will devastate California's remaining oil refineries, leading to significant job losses and higher fuel prices for consumers. The company says the regulation will "cripple the survivability of the state's remaining refineries" and "upend California's fuels market and threaten critical energy and national security assets."

Why it matters

California's Cap-and-Invest program is a key part of the state's climate agenda, but Chevron argues the proposed changes will have severe economic consequences, including the loss of high-paying union jobs and reduced funding for public services. The company also warns the policy will undermine national energy security by reducing domestic refining capacity.

The details

Chevron laid out the stakes in concrete terms, noting the oil and gas industry supports over 530,000 jobs in California and contributes $64 billion annually in tax revenue. The company says the regulation will "increase transportation and aviation fuel prices for consumers" and "risk significant job losses, including many high-paying union jobs." Chevron's letter comes as Valero has already begun shutting down its Benicia refinery, highlighting the real-time impacts of the state's climate policies on the industry.

  • Chevron sent the letter to Governor Newsom and the California Air Resources Board this week.
  • Newsom extended the Cap-and-Invest program through 2045 in September 2026.

The players

Chevron

An American oil and gas company that is one of the largest refiners in California.

Gavin Newsom

The Governor of California who extended the state's Cap-and-Invest program through 2045.

California Air Resources Board

The state agency responsible for regulating greenhouse gas emissions and overseeing the Cap-and-Invest program.

Andy Walz

The president of Chevron who signed the letter warning about the impacts of the proposed Cap-and-Invest amendments.

Valero

An oil refining company that has already begun shutting down its Benicia refinery in California.

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What they’re saying

“The proposed regulation will cripple the survivability of the state's remaining refineries, which will result in California losing the entire industry to this misguided program.”

— Andy Walz, President, Chevron (Chevron)

“This regulation will increase transportation and aviation fuel prices for consumers. It will risk significant job losses, including many high-paying union jobs, while reducing funding for essential public services. It will upend California's fuels market and threaten critical energy and national security assets.”

— Andy Walz, President, Chevron (Chevron)

What’s next

Chevron has urged policymakers and regulators to "reconsider and revise the proposed regulation before it causes lasting and irreversible harm to California's economy and energy security and broader vital American interests."

The takeaway

California's ambitious climate agenda, including the Cap-and-Invest program, is on a collision course with the state's energy infrastructure and economy. The proposed changes to the program threaten to devastate California's refining industry, leading to job losses, higher fuel prices, and potential risks to national energy security.