A California city reached a settlement with Chevron Corp. on Thursday that will see the company stop taxing it in exchange for paying hundreds of millions of dollars, according to Reuters.
Chevron has agreed to pay Richmond, California, $550 million over 10 years, but the city will halt a ballot measure that would have allowed it to impose new taxes on the company's refineries. According to According to Reuters, the settlement was made by Chevron decision The company announced in early August that it would be relocating its headquarters out of California, in part due to the state's tough regulatory and policy approach to traditional energy producers.
“Chevron Richmond and the City of Richmond have reached an agreement to resolve the litigation and remove the refinery license tax measure from the ballot,” Chevron said in a statement shared with the Daily Caller News Foundation. “This agreement will enable Chevron Richmond to continue providing Northern California with the affordable, reliable and cleaner energy that the local economy needs.” (Related article: What has California's war on fossil fuels actually accomplished?)
A view of the Chevron Richmond Refinery in Richmond, California, on August 3, 2024. (Photo by Justin Sullivan/Getty Images)
According to Reuters, the company plans to make the payments in monthly installments from July 2025 to June 2035. The Richmond refinery in the San Francisco Bay area is Open Founded in 1902, it processes approximately 250,000 barrels of crude oil every day.
The original proposal for the city's “refinery license tax” would have taxed the company $1 per barrel on crude oil and other refinery inputs, a Chevron spokesperson told DCNF. If Richmond voters had approved the measure, it would have imposed huge costs on refineries, potentially to the detriment of consumers and probably triggered a lengthy legal battle that would not benefit either the company or the city, the spokesperson added.
One estimate is that the tax could raise between $60 million and $90 million a year. According to To the Richmond Side, a local nonprofit news outlet.
Andy Waltz, president of Chevron Americas Products, recently told reporters that the tax proposal for the Richmond refinery was one example of the “headwinds” the company faced in California before deciding to move its headquarters to Texas.
Richmond City Attorney Dave Aleshire's office declined to comment.
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