Thanks to Guv Newsom, Phillips 66 and Valero are leaving California—for a total of 14% of our refinery capacity—with NO replacement. Now we find Chevron may be in the same boar—and investors might want to tank the stock.
“”We contend that enforcing a mandatory minimum inventory requirement will likely result in two negative outcomes: an increased frequency and duration of supply shortages, and a permanent rise in gasoline prices for consumers,” Walz said in the letter.
“This legislation could have a negative impact on California’s energy infrastructure, including supply shortages and higher gasoline prices,” the letter said. “These new policies may cause refiners to rethink how capital is used, which could lead to California becoming ‘uninvestible.'”
Chevron rips California’s new fuel inventory law, says may raise prices for customers
Carl Surran, SA News Editor, 11/27/24 https://seekingalpha.com/news/4340020-chevron-rips-californias-new-fuel-inventory-law-says-may-raise-prices-for-customers
Chevron (NYSE:CVX) said Tuesday that recently enacted legislation that authorizes the California Energy Commission to set regulations on the state’s refineries and energy infrastructure is based on “inaccurate and flawed arguments.”
In a letter from Andy Walz, the head of Chevron’s (CVX) Downstream, Midstream and Chemicals business, he said increasing regulation on the justification of “price spikes are profit spikes” was “misleading.”
Last month, California Governor Gavin Newsom signed into effect ABX2-1, a bill designed to prevent fuel supply shortages in the state and gives regulators at the California Energy Commission greater control over oil refineries operating in the state.
The new law enables the CEC to enforce refineries in the state to maintain minimum levels of fuel inventories, and manage necessary refinery turnarounds and maintenance in consultation with labor and industry stakeholders, in order to minimize the impacts of maintenance-related production losses on fuel prices.
“We contend that enforcing a mandatory minimum inventory requirement will likely result in two negative outcomes: an increased frequency and duration of supply shortages, and a permanent rise in gasoline prices for consumers,” Walz said in the letter.
“This legislation could have a negative impact on California’s energy infrastructure, including supply shortages and higher gasoline prices,” the letter said. “These new policies may cause refiners to rethink how capital is used, which could lead to California becoming ‘uninvestible.'”
