(The Center Square) – Following through on a 2022 pledge, Chevron, the oil giant founded in California, is relocating its headquarters to Houston, Texas, the oil and natural gas capital of the world.
Chevron Corporation announced on Friday that it was relocating its headquarters from San Ramon, California, to Houston, and it was migrating all corporate functions over the next five years.
After 145 years, California’s quintessential oil company will no longer be headquartered there, following a decades-long pattern of California losing people and businesses to Texas.
Chevron, which has been operating in Texas and globally for decades, was formerly Standard Oil of California (1906-1984), which was formerly the Pacific Coast Oil Company founded in 1879.
After the discovery of oil there, California was the leading oil-producing state in the country by 1903. After years of regulatory constraints targeting the industry, by 2022, California only produced roughly 3% of crude oil in the country.
After the Spindletop discovery in Beaumont, Texas, in 1901, Texas would soon become the leading oil-producing state. Backed by a supportive state government and regulatory environment, theingenuity of Texas businessmen, engineers and a skilled workforce, Texas now supplies 43% of all domestically produced crude oil and 28% of natural gas marketed production in the country, The Center Square reported. The Texas industry continues to break records from production, The Center Square reported.
In response to the news, Texas Gov. Greg Abbott, said, “WELCOME HOME Chevron! Texas is your true home. Drill baby drill. Chevron, in Snub to California, to Move Its Headquarters to Houston.”
Chevron is already one of the largest producers in the Permian Basin in west Texas, is actively involved in offshore drilling in the Gulf of Mexico. It runs refineries, chemical plants and other operations in Texas.
“Chevron’s announcement makes complete sense given the business-friendly environment in our state, the company’s significant Texas employee base and their tremendous assets in the Permian Basin,” Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, told The Center Square.
“We will continue to see an exodus of companies fleeing California to Texas from many industry sectors in the coming years. Thanks to the strong leadership from Texas policymakers, including Governor Abbott, our state will be the beneficiary of the increasing regulatory requirements and the associated cost of doing business in places like California.”
In 2022, Chevron first announced its plans to relocate its headquarters and purchased the failed energy company Enron’s building in downtown Houston. It also offered to pay its California employees to relocate to the Houston area.
At the time, under California Gov. Gavin Newsom, California’s business exodus was well underway. Hundreds had been relocating to Texas and other lower-tax states, The Center Square reported. California has lost moreresidents under Newsom than at any time in state history, while under Abbott, Texas gained a record number.
California often finds itself at or near the bottom of state comparisons regarding its business and regulatory environment, while Texas is often a national leader. In 2021, a Stanford University study warned that unless reforms were made, California would keep losing business to Texas, which was outcompeting all other states.
“There are historical patterns, clues and dangling statements made years ago that indicate that Chevron could eventually decide to move its headquarters to downtown Houston,” Realty News Report suggested. In 2022, it cited high taxes and an excessive regulatory “unfriendly” business environment “especially to oil and gas companies.” Among them was a 2020 executive order Newsom signed banning the sale of new gasoline-powered vehicles by 2035. Unlike the Texas legislature, California’swould go on to increase taxes,business regulations, impose greater restrictions and ban gasoline-powered vehicles and appliances.
Over the years, Abbott signed bills into law to reduce property and franchise taxes and regulations, protect Texans from federal overreach, and prohibit local governments from ever imposing bans similar to those of California.
Abbott and the legislature have said they remain committed to protecting “energy choice in Texas. No city or county should be able to deny Texans the ability to put gas in their cars, power their lawnmowers, or use natural gas in their homes,” he said. “The hardworking men and women of the energy sector are the lifeblood of the booming Texas economy.”
“The California-to-Texas moves often begin with the establishment of a beachhead in the Lone Star State where the work force grows. It’s eventually followed with the relocation of the corporate headquarters,” Realty News Report explained, referring to it as “The Texas Two-Step.” The Texas Two Step is a Country Music dance move and is also the name of a state lottery game.
“Chevron is a long-respected energy leader and moving their headquarters to the Energy Capital of the World—Houston, Texas—is fantastic news and a strong signal they are continuing to plan aggressively for a robust oil and natural gas future,” Todd Staples, president of the Texas Oil & Gas Association, told The Center Square. “With the right policies in place, oil and natural gas will continue to contribute to the state economy in a powerful way, create jobs, meet the everyday energy needs of families and secure our energy future.”
