Gavin Newsom’s Green Energy Agenda Is Collapsing — And the Economic Fallout Is About to Hit America Hard

Governor Gavin Newsom’s radical green energy agenda has not merely failed — it has spectacularly backfired. What is unfolding in California is a completely self-inflicted economic disaster with consequences that will extend far beyond state borders. In the coming weeks and months, Americans across the Southwest may feel the shockwaves of decisions made in Sacramento by leaders who ignored warnings, silenced critics, and prioritized ideology over reality.

This is no longer just about residents fleeing California in record numbers. It is about the collapse of a critical energy infrastructure — one that one of the largest corporations on Earth saw coming from a mile away.

They warned the governor.
They warned the legislature.
They were ignored.

So they left.

Chevron’s Exit Marks the End of an Era

Chevron is not a minor player. It is one of the world’s largest multinational energy corporations, with a market capitalization of roughly $300 billion. It ranks among the top five global oil and gas giants alongside ExxonMobil, Saudi Aramco, Shell, and BP. Its operations span continents, its supply chains power economies, and its investment decisions shape entire regions.

Founded in San Francisco in 1879, Chevron helped build California’s modern energy infrastructure. For more than 140 years, it fueled the state’s growth, provided tens of thousands of high-paying jobs, and anchored California’s industrial base.

That relationship is now over.

Earlier this year, Chevron announced it was relocating its headquarters to Houston, Texas. The question was obvious: why would a company abandon the state it helped build?

Chevron CEO Mike Wirth gave a blunt answer. California has become impossible to operate in.

Under Gavin Newsom’s leadership, the state has become hostile to business — defined by regulatory chaos, ideological extremism, crushing taxes, endless litigation, and total unpredictability. Permitting delays stretch for years. Environmental mandates shift constantly. Lawsuits are perpetual. Costs spiral out of control.

The situation has deteriorated so badly that Chevron can no longer pay six-figure engineers enough to justify living in California. Housing costs, taxes, commuting times, and declining quality of life have erased the value of even elite salaries.

When a global energy giant can’t compensate highly skilled professionals enough to make California livable, something has gone catastrophically wrong.

Chevron Is Only the Beginning

Chevron’s departure is not an isolated incident. Valero, a major supplier of California’s fuel, has also announced it is leaving the state. The company plans to shut down its Benicia refinery by April 2026 — a move economists warn will devastate California’s gasoline supply.

If gas prices already feel unbearable, brace yourself.

The city of Benicia alone stands to lose roughly 20% of its municipal budget, a fiscal gut punch that will ripple through schools, public services, and infrastructure. Desperate state officials even offered to subsidize Valero to keep the refinery operating.

Valero refused.

Executives made it clear they had no interest in partnering with what they described as environmental extremism. In fact, Valero is willing to absorb a staggering $1 billion loss just to escape California’s regulatory regime.

Hundreds of workers will lose their jobs. Supply will shrink. Demand will not. Prices will surge — all by design.

And then came another bombshell.

Philip 66 announced it will shut down its massive Los Angeles refinery by the end of December. That’s 139,000 barrels per day gone overnight. In less than a year, California will lose nearly 20% of its gasoline production capacity.

You cannot replace that overnight. You cannot “transition” your way out of missing refineries.

California’s Energy Nightmare Explained

To understand how California arrived at this point, you must examine the regulatory maze created under Newsom’s leadership.

California’s cap-and-trade system forces refineries to buy costly carbon allowances, driving production costs sky-high. The state mandates a unique gasoline blend that isolates California from the national fuel market, meaning few refineries outside the state can supply it during shortages.

Newsom recently signed legislation allowing the state to cap refinery profit margins and punish companies for what bureaucrats decide is “excessive” profit.

Let that sink in.

California now penalizes companies for being profitable — a policy guaranteed to drive investment away and shut down production.

To make matters worse, California is effectively an energy island. There are no pipelines connecting its refineries to Texas or Louisiana. Federal shipping restrictions under the Jones Act make it nearly impossible to import fuel efficiently by sea, since domestic shipping must use American-built, American-owned vessels — and the U.S. has almost none available.

China is currently building over 1,800 commercial ships. The United States is building five.

The Ultimate Green Energy Irony

So where will California get its fuel when its refineries close?

Saudi Arabia.
South Korea.
India.

That’s right. The state that claims to be saving the planet will rely on massive oil tankers burning heavy fuel oil to ship gasoline halfway around the world. Deliveries take weeks. Any disruption — a storm, a war, a refinery fire — and California’s fuel supply evaporates.

University economists are already projecting gas prices could hit record highs by next summer, with some models approaching $8 per gallon.

That’s not an inconvenience. That’s economic suicide.

And it won’t stop at California’s borders.

California refineries supply 88% of Nevada’s gasoline and roughly a third of Arizona’s fuel. When California collapses, neighboring states feel it immediately. Governors across party lines have begged Newsom to reverse course. He has refused.

A Tale of Two Americas

What’s happening in California reflects a larger national divide.

Red states are booming. Blue states are shrinking.

Between 2023 and 2024 alone, California lost nearly 250,000 residents. New York lost over 129,000. Illinois lost tens of thousands more. Meanwhile, Texas, Florida, Tennessee, and South Carolina gained residents by the hundreds of thousands.

Texas led the nation in corporate headquarters relocations in 2024. California lost the most.

Unemployment is lowest in red states. California now has the highest unemployment rate in the country, hovering near 6%. The Southeast has surpassed the Northeast in total economic output, a historic shift decades in the making.

This didn’t happen by accident. It was the result of policy choices.

Low taxes, deregulation, affordable housing, and stable governance fueled growth in red states. High taxes, regulatory overreach, crime, and ideological governance hollowed out blue states.

Chevron didn’t leave California because of the weather. It left because businesses cannot operate under uncertainty and hostility.

Chevron was the canary in the coal mine.

And that canary just died.

The Reckoning Ahead

Now Newsom is scrambling — proposing price caps, anti-gouging laws, and regulatory theatrics that solve nothing. You cannot legislate supply into existence. The refineries are closing. The workforce is leaving. The ships are weeks away.

California wanted a future without oil companies.

Congratulations.

You got exactly what you asked for.

Now millions of Californians will pay for it — every single time they fill their tanks.