Friday, January 1, 2010

Chevron Departing Bay Area - Maybe

Chevron, a major international oil company, has a refinery in Richmond and its headquarters nearby in San Ramon, California, both on the San Francisco Bay. A recent article states that Chevron may have had enough of battling California (the state) and Californians (the eco-nuts) in its quest to upgrade and modernize the Richmond refinery. Chevron may just shut it down, and perhaps import gasoline, diesel, and jet fuel that is refined somewhere else. Goodbye to the jobs, to the taxes that support the local and state economy.

Chevron might consider relocating the headquarters to more friendly areas. Exxon did when it departed New York and moved to Dallas, Texas. The difference to the bottom line between New York's tax rates and Texas' made a big difference to Exxon's bottom line (now ExxonMobil after aquiring Mobil). Chevron could use the boost to its bottom line, too.

And nothing would be more fitting than for a huge corporation, with thousands of employees in California, to move out of California. Other industries have downsized or departed entirely. Cars are no longer made in California (after the sole remaining plant shuts down, as they have stated they will.)

Some Californians will likely say goodbye and good riddance if Chevron shuts down and departs. They view the corporation as an evil on society, causing pollution that injures or sickens or kills people prematurely. These same people drive their cars to their protest meetings, heat their homes with natural gas, depend on emergency generators fueled by diesel, and fly to their vacations and holidays in jets that burn jet fuel. All made by oil and refining companies, very likely Chevron, although there are several others in the state.

I hope Chevron does shut down the Richmond refinery and use it just as an import terminal. I hope Chevron does close its doors in San Ramon and move the headquarters to another state with lower taxes and no Global Warming Solutions Act like AB 32.

On the other hand, closing the refinery may not be possible. Shell tried to shut down a refinery in the Bakersfield area recently, and was required instead to find a buyer who would keep it running. Anti-trust reasons were brought up because the supply-demand balance in California is very tight (or it was in those days, it has improved somewhat now with the economic recession). The reasoning was that prices would soar if that one (and it was very small) refinery was closed, which would be an anti-competitive practice. Shell found a buyer, sold the refinery, and the buyer soon filed for bankruptcy, proving Shell was correct in their assessment that the refinery could no longer be run profitably. Will a US Senator intervene against Chevron if Chevron wants to shut down the Richmond refinery? Why should she, if Chevron imports the fuels? No harm, no foul, just bring in ships with products rather than ships with crude oil. India has plenty of refining capacity with products for sale.

California. What a place. Fantasies are written almost daily in this state, and some are made into movies to entertain the world. Some are actually quite good, while most are junk. Yet the front page news stories are far more entertaining than the film world's products. Imagine this script, where a large state writes law after law to cripple its industries, decrease employment, enrich consultants and doom-sayers, employ armies of lawyers, drive out employers, stays eternally in massive budget deficits in the amount of roughly $24 billion each year, spends half its state budget "educating" children who cannot read or write upon graduation, then that same state advertises itself as The Golden State where everyone is free, the weather is fabulous, and business opportunities abound.

Nah, couldn't happen. No state would be that dumb.

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