Businessman, investor, and TV personality Kevin O’Leary urged California Governor Gavin Newsom to reconsider the state’s energy regulations, which he believes are adversely affecting energy corporations.
O’Leary’s Urgent Appeal to Newsom
O’Leary pleaded with Newsom to ‘Wake up and smell the hydrocarbons,” responding to Chevron’s announcement of a potential profit decline of $3.5 to $4 billion, a situation attributed to California’s energy policies.
Questioning Newsom’s Competence
While expressing personal fondness for Newsom, O’Leary questioned his competence in managing the state’s energy sector.
“I Wouldn’t let him Manage a Candy Store”
The “Shark Tank” star labeled Newsom “clueless to the competition” in the energy sector, adding, “I wouldn’t let him manage a candy store.”
Chevron’s Financial Hit
Chevron’s filing on January 2 revealed the significant financial impact of California’s climate policies. The company highlighted “lower anticipated future investment levels” as a critical factor in its profit decline.
Governor’s Ambitious Climate Plan
In 2022, Newsom announced a plan to drastically reduce greenhouse gas emissions and gas consumption by 2045. His initiative aims to combat climate change aggressively.
California Climate Commitment
“The state announced, ‘California Climate Commitment – a set of world-leading actions to build out a 100% clean energy grid, achieve carbon neutrality by 2045, ramp up carbon removal and sequestration, protect Californians from harmful oil drilling, and invest $54 billion to forge an oil-free future while building sustainable communities throughout the state.'”
Emission Reduction Goals
The state aims for a 71% reduction in air pollution and a significant 85% cut in greenhouse gas emissions by 2045.
Surpassing Previous Targets
This objective surpasses the earlier statutory requirement of lowering emissions to 40% below 1990 levels by 2030, now targeting a 48% reduction by 2030.
Fossil Fuel Consumption Cut
The plan also includes drastically reducing fossil fuel consumption to less than 10% of current levels, amounting to a 94% decrease in oil demand and an 86% reduction in the overall demand for fossil fuels.
Accusation Against Oil Companies
After revealing that major oil companies earned profits of $200 billion in 2022, Newsom accused these companies of excessively charging Californians. The state is contemplating measures to regulate refining profits.
“Continue to Play us for Fools”
In a statement at New York City’s September Climate Week, Newsom blamed oil supermajors for “lying” about climate change. “The climate crisis is, after all, a fossil fuel crisis. They continue to play us for fools. I’ve had enough, and I’m sick and tired of this,” he declared.
California Sues Energy Giants
California has also taken legal action against several major oil companies, including Exxon Mobil, Shell, BP, ConocoPhillips, and Chevron. The lawsuit alleges that these companies misled the public about the impact of fossil fuels on climate change.
Chevron CEO’s Counterargument
In response to the lawsuit, Chevron’s CEO Mike Wirth emphasized the need for a coordinated global approach to climate change rather than isolated legal actions.
Investment Climate in California
California’s tough stance on big oil companies is causing hesitation in investment.
President of Chevron’s Americas Products, Andy Walz, expressed concerns in December’s filing, stating, “California’s policies have made it a difficult place to invest, so we have rejected capital projects in the state.”
“Adversarial Business Climate”
Walz added: “Such capital flight reflects the state’s inadequate returns and adversarial business climate.”
O’Leary’s Investment Perspective
O’Leary, an investor in the energy sector, has shunned California due to what he views as “bad policy [and] weak management.” He prefers investing in states like North Dakota, Virginia, Oklahoma, and Texas, citing their competitive investment environments.
“Who would give a dime to California?”
O’Leary questioned the rationale behind investing in California’s energy sector, echoing Chevron’s sentiment. “Who would give a dime to California to invest in energy when the regulatory environment is so punitive you can’t make money?” he asked.
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