When it comes to California’s climate future, the most important figure in the state’s chaotic governor’s race may not be any of the candidates on the debate stage. It may not even be outgoing governor Gavin Newsom, or President Donald Trump.
Instead, it might just be Chevron, the multinational oil company that was founded in the Golden State more than 100 years ago. It is among the largest producers, refiners, and sellers of petroleum products in a state rapidly shifting toward electric vehicles. Depending on which candidate is talking, the company is an example of how Big Oil is strangling consumers or an example of how climate regulations are strangling the state economy.
The behemoth — it reported $12.3 billion in profit last year — took the spotlight last month when an interviewer asked leading Democratic candidate Xavier Becerra about Chevron’s contributions to his campaign. The former state attorney general and Biden-era health secretary gave what seemed to be a 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.”
The phrase “I need Chevron” soon appeared in anti-Becerra videos by the likes of climate hawk Jane Fonda, implying that the candidate was saying he needs Chevron to get elected. Progressive billionaire Tom Steyer, Becerra’s lead Democratic opponent, urged him to return the contribution and said he is “doing [the] bidding” of Big Oil. Representative Katie Porter, another leading Democrat, said in a statement that she “hasn’t made millions off Big Oil or taken their checks.”
Becerra is not entirely wrong. California consumes around 13 billion gallons of gasoline annually, all of it specifically formulated to meet the state’s stringent clean air standards. Most of it comes from just six refineries, and Chevron owns two that account for one-third of the state’s production. That gives the company and its peers tremendous leverage. But California’s gas consumption has declined by about 15 percent from a peak in 2004 due to improved fuel economy in conventional vehicles and growing adoption of electric vehicles. It could fall by half over the next two decades.
The primary is June 2. The challenge for the next governor will be to continue the energy transition while retaining the infrastructure needed to move and refine oil. This has never been accomplished in a place as large as California, which was the world’s fifth-largest economy in 2025. The risks are tremendous: If the state moves too quickly, it could create shortages and price spikes for drivers already paying the highest prices in the country. If it moves too slowly, it could lock in decades of air pollution and hinder global climate progress.
“It’s messy,” said Emily Grubert. She is a civil engineer and sociologist at Notre Dame who has studied fossil fuel transitions and advised the state government on oil infrastructure. “As soon as you realize that actually transitioning away from fossil fuels means you have to close things, people get really freaked out.”
Newsom spent much of his governorship going after Big Oil, an effort that included a series of executive actions to restrict fracking in Kern County oil fields. When the war in Ukraine sent gas prices surging, Newsom and Democrats in the Legislature passed a series of bills to stop what he called “price gouging.” These laws empowered a new oil-focused watchdog agency, created a tool that could impose refinery price caps, and required refineries to maintain certain storage reserves, all of which cut profit margins for Chevron and others. The new refinery rules added to multiple carbon taxes that make selling gasoline in California more expensive.
However, there is some evidence refiners have overcharged Californians. Even after accounting for state taxes, environmental fees, and production costs, a gap remains between gas prices in the Golden State and everywhere else. This gap appeared in 2015 after a refinery fire in Torrance and has come to be known as the “mystery gasoline surcharge.” It now averages about $1. Last fall, a state regulator concluded that refiners’ monopoly power may be the reason for the price spikes.
Oil companies accused Newsom of trying to regulate them out of existence, and many threatened to leave. Two major refiners, Wilmington and Benicia, announced last year that they would close their operations, forcing a state that already imports about 60 percent of its oil to rely on imports of gasoline refined in Asia. Chevron relocated its corporate headquarters from the San Francisco suburb of San Ramon to Houston in 2024, and it has delivered a series of ominous warnings this year as climate regulators have revised the state’s almost 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,” Andy Walls, the president of Chevron’s refinery business, wrote in an open letter to Newsom in March. The implication was clear: unless you relax your regulations, we will leave the state and strand you without gasoline. That would mean paying Asian refiners to produce more of the state’s specific blend, at significant cost.
The Newsom administration spent much of 2025 trying to work out a grand bargain with the industry. The Legislature eased rules governing drilling in Kern County oil fields, helping maintain a stable supply of crude to refineries, It also delayed implementing a refinery profit cap, and allowed the temporary sale of gasoline with higher concentrations of ethanol. The state’s climate regulator has also suggested giving refineries free allowances under the state’s cap-and-trade system, even if it means less money for big projects like high-speed rail and sustainable housing. The idea is to give investors enough certainty that they’re willing to remain in California even as the state uses less gasoline.
Experts believe it will take a lot more than that to manage inevitable changes.
“You actually can’t have a smooth and safe and effective transition without some form of coordinating function for that decline,” said Grubert. She believes a degree of state ownership of refineries will be necessary to keep facilities open if they stop being profitable. The wrong approach, she says, would be to respond to each potential a refinery closure with ad hoc subsidies and state support, since that would allow refiners to extort the state one by one.
That point was reinforced this month by a report from the California Energy Commission that has not received much notice. The analysis of the state’s shaky fuel system found that “California cannot sustainably manage this transition through repeated crisis interventions at an asset-by-asset level.” It suggested options that included “legal obligations to operate,” “centralized planning of closures,” and “direct state management or ownership of assets.”
The Iran war will accelerate a decline in both the supply of, and demand for, oil. Gas retailers like Chevron are already struggling to find additional imports of refined fuel, and some experts predict shortages if the Strait of Hormuz does not open within weeks. Meanwhile, electric vehicles continue gaining market share, and Newsom plans to roll out subsidies for them this year. Wider adoption of these vehicles, and hybrids, will further crimp demand, making any remaining refineries more likely to shutter.
Mark Ralston / AFP via Getty Images
All of this helps explain the showdown between the leading Democrats in the governor’s race, who are each trying to find a lane in a field that at one time included more than 50 candidates.
Becerra has given lip service to clean energy, but many public statements suggest a friendliness toward oil producers. As attorney general, he initiated a few lawsuits against petroleum companies, and supported other state climate lawsuits, but punted on major investigations. He has focused his gubernatorial campaign on vows to fight Donald Trump and protect healthcare, and has made controversial promises to freeze utility and insurance rates. On decarbonization, he has noted that “climate action only succeeds if it is affordable, reliable, and fair.”
After the chaos of the early primary, many oil producers have decided that Becerra is their candidate. Chevron last month contributed the maximum allowable amount of $39,200 to his campaign, the first time in a decade it has backed a gubernatorial candidate. Last week, the company contributed another $500,000 to an independent political committee supporting Becerra. California Resources Corporation, the state’s largest driller, also gave $500,000 to a Becerra committee. And gas companies like Sempra are among the donors to an anti-Steyer political committee that has raised more than $24 million.
Steyer, meanwhile, has made attacking Big Oil the focus of his campaign, as it was during his 2020 presidential run. He says he would lower gas prices by activating the refining profit cap that Newsom has declined to use, investigating what is causing high gas prices (something the state has already done), and taxing private jet fuel. When refineries “inevitably” close, he says he will stockpile an oil reserve and import more refined fuel for as long as California needs it.
Steyer has also had to address his own fossil fuel ties. The hedge fund he founded, Farallon Capital, remains a major player in coal power finance abroad, including in Indonesia and Australia. Steyer still holds a stake in the firm, which he left in 2012, but his campaign says he no longer receives dividends from its fossil fuel investments.
California uses a “jungle primary” in which the top two candidates advance to the general election, regardless of party. The latest poll shows Becerra essentially tied with former Fox News host Steve Hilton, a Republican, with Steyer trailing at around 15 percent. The most likely outcome is that one of Becerra or Steyer will make it to the general election. (The other Democrats, including Porter and San Jose Mayor Matt Mahan, trail behind in the double digits.)
Railing against Big Oil has long proven to be good politics in California. But in the wake of Trump’s second election victory, Democrats have sought to downplay climate issues and focus instead on affordability. The question in the governor’s race is how best to achieve that in the long run. Is it better to use a bully pulpit against companies like Chevron in an effort to break their market power, or conciliate them in the hope that they don’t flee?
Mike Madrid, a veteran California political operative, believes Becerra’s approach will resonate more with the young and Latinos, both of whom often decide statewide elections.
“This attack on Chevron, it works for the base Steyer already has,” he said. “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.”
Steyer’s campaign may not get him over the line in the primary, but he has at least been consistent. In a 2013 blog post for this very publication, he celebrated the result of the Virginia governor’s race, where a climate-focused Democrat beat a fossil-fuel friendly Republican with help from Steyer’s own war chest.
“A new political dynamic is emerging,” he wrote at the time. “Climate change is a winner, not a loser,” and is “no longer electoral Kryptonite.”
If Chevron has its way, next week’s primary results will prove otherwise.
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This story was originally published by Grist with the headline ‘I need Chevron’: The oil company at the center of the California governor’s race on May 26, 2026.
