'I wouldn't allow him to run a candy store': Kevin O'Leary blasts California Gov. Gavin Newsom after Chevron forecasts up to $4 billion hit to profits due to state's energy policies
“Shark Tank” investor and businessman Kevin O'Leary has a message for California Gov. Gavin Newsom: “Wake up and smell the hydrocarbons.”
California's climate change policies have come under fire this week after Chevron said it faces a loss in profits of up to $4 billion due to restrictive regulations in the Golden State. The regulations “have resulted in lower expected future levels of investment,” the company said in a Jan. 2 filing, according to Bloomberg.
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In an interview with Fox Business, O'Leary criticized the state's “uncompetitive” energy policy and called California's management “the worst of any state in the union.”
Although he claimed to “like” Newsom after meeting him in person, O'Leary described the Democratic governor as “clueless about the competition” in the interstate energy market – adding: “I wouldn't put him in charge of one.” “Leave it to the 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 plan that aims to reduce greenhouse gas emissions by 85% and gas consumption by 94% by 2045.
After Newsom reported that Big Oil made $200 billion in profits in 2022, he accused them of “harassing Californians at the pump” and vowed to hold them accountable. State lawmakers are considering capping refinery profits.
At the opening ceremony of New York Climate Week in September, Newsom accused oil companies of “lying” about climate change. He said: “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 of it.”
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That same week, California filed a civil lawsuit against five energy giants — Exxon Mobil, Shell, BP, ConocoPhillips and California-based Chevron — accusing them of misleading the public and downplaying the contribution of fossil fuels to climate change.
Chevron CEO Mike Wirth dismissed that claim, telling Bloomberg: “Climate change is a global problem. “It requires a coordinated global policy response, not one-off litigation that benefits lawyers and politicians.”
Investment capital in California
The Golden State's less-than-favorable treatment of oil companies had a huge impact on its willingness to invest in the country's most populous state.
According to Bloomberg, Andy Walz, president of Chevron's Americas Products business, wrote in a December filing: “California's policies have made it a difficult place to invest, so we have rejected capital projects in the state.”
He added: “Such capital flight reflects the state’s inadequate returns and adversarial business climate.”
As an energy industry investor, O'Leary has rejected California for its “bad policies.” [and] weak management,” which he claims is “hurting California’s economy and people.”
Instead, he would rather pump money into states like North Dakota, Virginia, Oklahoma and Texas because “they're competing for my money” and have a regulatory environment that enhances energy security – rather than hinders it.
“Who would give California a dime to invest in energy when the regulatory environment is so strict that you can't make money?” he said. “That’s what Chevron tells everyone.”
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