In California’s turbulent governor’s race, the key player shaping the state’s climate future might not be any of the candidates or even outgoing governor Gavin Newsom or President Donald Trump.
Instead, it could be Chevron, the multinational oil giant founded in California over a century ago. As one of the top producers, refiners, and distributors of petroleum products, Chevron finds itself at a crossroads in a state rapidly embracing electric vehicles. Depending on the candidate, Chevron is either seen as a consumer-strangling force of Big Oil or a victim of climate regulations crippling the state economy.
Chevron, reporting $12.3 billion in profit last year, became a focal point when Democratic candidate Xavier Becerra was questioned about campaign contributions from the company. Becerra, previously a state attorney general and health secretary under Biden, offered a seemingly candid response:
“Chevron, that’s the problem with politics. They’re not the bad guy. Does everybody here drive an electric vehicle? You need Chevron. I need Chevron. My people of the state of California need Chevron … Chevron wants to give me a check, that’s — that’s their prerogative.”
Becerra’s comment “I need Chevron” quickly surfaced in anti-Becerra videos from figures like climate advocate Jane Fonda, suggesting he needs Chevron for election success. Tom Steyer, a progressive billionaire and Becerra’s main Democratic rival, urged Becerra to return the donation, accusing him of “doing [the] bidding” of Big Oil. Fellow Democrat Katie Porter noted that she has not profited from or accepted contributions from Big Oil.
Becerra isn’t entirely off base. California uses about 13 billion gallons of gasoline annually, all formulated to meet strict clean air standards. Just six refineries, including two owned by Chevron, produce most of it, giving the company significant influence. However, since 2004, California’s gasoline consumption has dropped about 15 percent due to more efficient vehicles and increased electric vehicle use, with potential for further decline in the next two decades.
With the primary on June 2, the next governor must navigate the energy transition while preserving essential oil infrastructure, a feat never before achieved in a region as large as California, the world’s fifth-largest economy in 2025. The stakes are high: moving too fast risks shortages and price spikes, while moving too slowly could prolong pollution and hinder climate progress.
“It’s messy,” said Emily Grubert, a civil engineer and sociologist at Notre Dame, who has studied fossil fuel transitions and advised the state on oil infrastructure. “When people realize transitioning away from fossil fuels means closing things, they get really freaked out.”
Throughout his governorship, Newsom targeted Big Oil with actions like restricting fracking in Kern County. When the Ukraine war surged gas prices, Newsom and state Democrats passed laws against “price gouging.” These measures empowered a new watchdog agency, enabled refinery price caps, and required storage reserves, reducing profit margins for Chevron and others. New refinery rules added to various carbon taxes, making California gasoline pricier.
Evidence suggests refiners have overcharged Californians. Despite state taxes, fees, and production costs, a price gap persists between California and other states. This gap, known as the “mystery gasoline surcharge,” began after a 2015 refinery fire in Torrance and averages about $1. A state regulator concluded that monopoly power might be driving these price spikes.
Oil companies accused Newsom of trying to eliminate them, prompting threats to leave. Two significant refiners, Wilmington and Benicia, announced closures, pushing California, which already imports 60 percent of its oil, to rely on gasoline refined in Asia. Chevron moved its headquarters from San Ramon to Houston in 2024, issuing ominous warnings as climate regulators revised the state’s nearly 15-year-old carbon tax.
“The proposed regulation will cripple the survivability of the state’s remaining refineries, which will result in California losing the entire industry,” stated Andy Walls, president of Chevron’s refinery business, in an open letter to Newsom in March. He implied that if regulations aren’t relaxed, Chevron would leave, leaving California without gasoline and reliant on costly Asian refiners.
In 2025, Newsom’s administration sought a grand bargain with the industry. The Legislature eased drilling rules in Kern County, delayed refinery profit caps, and temporarily allowed gasoline with higher ethanol content. The state’s climate regulator suggested giving refineries free allowances under the cap-and-trade system, even at the cost of funds for major projects like high-speed rail and sustainable housing, to assure investors and keep them in the state.
Experts argue more is needed to manage inevitable changes.
“You can’t have a smooth, safe, effective transition without some coordinating function for that decline,” Grubert noted. She suggests state ownership of refineries to keep them open if they become unprofitable, warning against ad hoc subsidies and support that would allow refiners to extort the state.
This was emphasized in a report by the California Energy Commission, which stated that “California cannot sustainably manage this transition through repeated crisis interventions at an asset-by-asset level.” Options proposed included “legal obligations to operate,” “centralized planning of closures,” and “direct state management or ownership of assets.”
The Iran war will expedite the decline in oil supply and demand. Chevron and other retailers struggle to secure additional fuel imports, with experts predicting shortages if the Strait of Hormuz remains closed. Meanwhile, electric vehicles continue gaining market share, and Newsom plans to introduce subsidies for them this year. Increased adoption of these vehicles, along with hybrids, will further reduce demand, leading to more refinery closures.
This context highlights the clash among leading Democrats in the governor’s race, as they seek distinct positions in a field that once had over 50 candidates.
While Becerra supports clean energy, his statements hint at a favorable stance toward oil companies. As attorney general, he filed a few lawsuits against petroleum firms and backed other state climate cases but avoided major investigations. His campaign focuses on opposing Donald Trump and safeguarding healthcare, with contentious promises to freeze utility and insurance rates. On decarbonization, he emphasized that “climate action only succeeds if it is affordable, reliable, and fair.”
Following the primary’s early turmoil, many oil producers have rallied behind Becerra. Chevron recently contributed the maximum of $39,200 to his campaign, marking its first gubernatorial backing in a decade. The company also donated $500,000 to a Becerra-supporting political committee. California Resources Corporation, the state’s largest driller, contributed $500,000 to a Becerra committee as well. Gas companies like Sempra have funded an anti-Steyer committee that has raised more than $24 million.
Steyer, in contrast, centers his campaign on challenging Big Oil, as he did during his 2020 presidential bid. He proposes lowering gas prices by activating a refining profit cap that Newsom has not employed, probing high gas prices (an issue already examined by the state), and taxing private jet fuel. He plans to stockpile an oil reserve and import more refined fuel when refineries close “inevitably.”
Steyer has addressed his own fossil fuel connections. The hedge fund he founded, Farallon Capital, remains a significant entity in coal power finance overseas, in countries like Indonesia and Australia. Though he left the firm in 2012, he retains a stake, but his campaign claims he no longer receives dividends from its fossil fuel investments.
California’s “jungle primary” system allows the top two candidates, regardless of party, to advance to the general election. The latest poll indicates Becerra is nearly tied with Republican Steve Hilton, with Steyer trailing at around 15 percent. It appears likely that either Becerra or Steyer will advance. Other Democrats like Porter and San Jose Mayor Matt Mahan lag in double digits.
Historically, opposing Big Oil has been popular in California politics. However, after Trump’s second election win, Democrats have shifted focus from climate issues to affordability. The governor’s race raises a critical question: should the state confront companies like Chevron to diminish their market power, or engage them to prevent their departure?
Mike Madrid, a seasoned California political strategist, suggests Becerra’s strategy might appeal more to young voters and Latinos, who often determine state election outcomes.
“This attack on Chevron, it works for the base Steyer already has,” Madrid commented. “Young Latino working-class men are the demographic most affected by gas prices. Do you think they’re saying we need to get rid of Chevron? Of course not.”
Though Steyer’s campaign may not succeed in the primary, it remains consistent. In a 2013 blog post for this publication, he celebrated a Virginia governor’s race win, where a climate-centric Democrat defeated a fossil-fuel-friendly Republican, aided by Steyer’s financial backing.
“A new political dynamic is emerging,” he wrote then. “Climate change is a winner, not a loser,” and is “no longer electoral Kryptonite.”
If Chevron influences the outcome, the upcoming primary results might tell a different story.
