Behind the Oil Industry’s Biggest Divorce: Chevron Versus California. Feb 9, 2025
“Why deal with California when you could go to Texas or New Mexico? You only have so much capital and so much time in the day,” said Andy Lipow, president of Lipow Oil Associates in Houston. “Given the regulatory environment in California, I would be investing outside the state.”
Definitely worth reading.
We looked at trying to save Perth Amboy, by converting it to an advanced fuels terminal and importing from the underutilized UK refinery. Wouldn't work for technical reasons. Glad to sell off the mess.
There has been some evaluation of shutting the refineries and converting them to import terminals, but any gasoline would have to meet CARB standards.
@cb I doubt there is an ARO reserve set that is big enough to cover that closure.
The paradox is while California is becoming a bad economic environment for Big Oil, the cost of environmental cleanup of two large, long history refineries will be an economic drain. No more bandaid remedial approaches if they shutter and no su-kers willing to buy them to keep them running.
The Chevron California refineries are in a paradoxical situation where regulations make it hard to operate, yet also these regulations also insulate them from outside competition. The name of the game here is for them to survive the in-state competition and inherit a dominant or even monopoly position, courtesy of California's foolish regulations. Phillips 66 had a strong SoCal refinery, yet chose to shut down in 4Q2025, which is a big step forward. Relocating corporate functions is a no-brainer, in any case.