“Shark Tank” investor and businessman Kevin O’Leary has a message for California Governor Gavin Newsom: “Wake up and smell the hydrocarbons.”
California’s climate change policies have come under criticism this week after Chevron revealed that restrictive rules in the Golden State are costing it up to $4 billion in lost profits. “The regulations have resulted in reduced future projected investment levels,” the company said in a filing on Jan. 2, according to Bloomberg.
In an interview on Fox Business, O’Leary criticized the state’s “uncompetitive” energy policies and called California’s management “the worst of every state in the union.”
Despite claiming to “like” Newsom after meeting him in person, O’Leary described the Democratic governor as “ignorant of competition” in the energy market between states – and added, “I would imagine him managing a candy store.” I won’t let it happen.”
He called California “a very bad place to do business” for energy companies and their investors. Is O’Leary right?
California vs. Big Oil
In late 2022, Newsom announced an ambitious climate action plan that would reduce greenhouse gas emissions by 85% and reduce gas consumption by 94% by 2045.
After reporting that Big Oil would make $200 billion in profits by 2022, Newsom accused them of “robbing Californians” and promised to hold them accountable. State lawmakers are considering setting limits on refining profits.
Speaking at the inaugural New York City Climate Week event in September, Newsom accused oil supermajors of “lying” about climate change. He said: “The climate crisis is, ultimately, a fossil fuel crisis. They continue to fool us. I’ve had enough and I’m tired of it.”
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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 the contribution of fossil fuels to climate change.
Chevron CEO Mike Wirth rejected that claim, telling Bloomberg: “Climate change is a global issue. “This calls for a coordinated global policy response, not piecemeal litigation that benefits lawyers and politicians.”
Investment Capital in California
The Golden State’s non-golden behavior toward Big Oil has had a huge impact on its willingness to invest in the nation’s most populous state.
According to Bloomberg, in December, Andy Walz, president of Chevron’s Americas Products business, wrote in a filing: “California’s policies have made it a difficult place to invest, so we declined capital projects in the state. Is.”
He said: “Such capital flight reflects the state’s inadequate returns and unfavorable business environment.”
As an investor in the energy industry, O’Leary has rejected California because of its “bad policy”. [and] He claims that weak management is “hurting California’s economy and people.”
Instead, he would prefer to put money into states like North Dakota, Virginia, Oklahoma and Texas because “they’re competing for my money” and they have regulatory environments that promote rather than hinder energy security.
“Who would pay a dime to California to invest in energy when the regulatory environment is so punitive that you can’t make money?” He said. “That’s what Chevron is telling everyone.”
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