“Shark Tank” investor and entrepreneur Kevin O’Leary has a message for California Gov. Gavin Newsom: “Wake up and smell the hydrocarbons.”
California’s climate change policies came under fire this week after Chevron revealed it faces up to $4 billion in lost profits due to restrictive regulations in the Golden State. The regulations “resulted in lower expected future investment levels,” the company said in a statement on January 2, according to Bloomberg.
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In an interview with Fox Business, O’Leary criticized the state’s “uncompetitive” energy policies and called California’s administration “the worst of every state in the union.”
Despite claiming to “like” Newsom after meeting him in person, O’Leary called the Democratic governor “ignorant of competition” in the interstate energy market — adding, “I’m not going to let him run a candy store.”
He called California “a very bad place to do business” for energy companies and their investors. Is O’Leary right?
California vs. Big Oil
In late 2022, Newsom announced an ambitious climate action plan that would cut greenhouse gas emissions by 85% and cut gas consumption by 94% by 2045.
After reporting that Big Oil companies made $200 billion in profits in 2022, Newsom accused them of “plundering Californians at the pump” and promised to hold them accountable. State lawmakers are considering setting a ceiling on refining profits.
Speaking at the opening ceremony of Climate Week in New York City in September, Newsom accused Big Oil of “lying” about climate change. “The climate crisis is, ultimately, a fossil fuel crisis,” he said. They keep playing us like fools. “I’ve had enough and I’m sick and tired of this.”
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That same week, California filed a civil suit against five energy giants — ExxonMobil, Shell, BP, ConocoPhillips and California-based Chevron — accusing them of misleading the public and downplaying fossil fuels’ contribution to climate change.
Chevron CEO Mike Wirth rejected the claim, telling Bloomberg: “Climate change is a global issue. It calls for a coordinated global policy response, not piecemeal litigation that benefits lawyers and politicians.”
California venture capital
The Golden State’s unflattering treatment of major oil companies has had a significant impact on their willingness to invest in the most populous state in the country.
According to Bloomberg, in December, Andy Walz, head of Chevron’s Americas products business, wrote in a filing: “California’s policies made it a difficult place to invest, so we rejected capital projects in the state.”
“Such capital flight reflects insufficient state revenues and a hostile business climate,” he added.
As an investor in the energy industry, O’Leary has dismissed California for its “poor policy (and) poor governance” that he claims is “harming California’s economy and its people.”
Instead, he prefers to funnel money to states like North Dakota, Virginia, Oklahoma and Texas, because they are “competing for my money” and have regulatory environments that promote rather than hinder energy security.
“Who’s going to give a dime to the state of California to invest in energy when the regulatory environment is so punitive that they can’t make money?” He said. “That’s what Chevron is telling everyone.”
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