Consumer Watchdog To Newsom: Don't Help Chevron Get Richer, Pull Back CARB Rules

SACRAMENTO, Calif., May 27, 2026 /PRNewswire/ -- Consumer Watchdog urged Governor Newsom to pull back a Thursday vote on new rules for cap-and-trade that will hand a $2 billion windfall to Chevron and the state's other three oil refiners. Newsom told drivers to steer clear of Chevron stations over the Memorial Day holiday because of Chevron's price gouging.

"The Governor has rightly condemned Chevron for charging an extra dollar at the pump over what drivers pay at Costco for the same gasoline, now he has a chance to stand up for fairness and withdraw a proposal that gives away $2 billion in free emission permits to polluting refineries like Chevron's," said Jamie Court, president of Consumer Watchdog. 

"Giving oil refiners a free ride for their pollution is appalling. The new CARB amendments transfer billions to oil companies like Chevron who have time and again disproved the notion that they will keep prices lower through such giveaways. The new rules are broadly opposed by environmental and public interest groups. Governor Newsom needs not to give in to the oil refiners once again if he is to have any credibility as a climate change champion who is for Big Oil accountability. These CARB rules are the opposite of the Big Oil accountability he championed for his first 6 years in office. This is the time for Governor Newsom to stand up to Chevron."

The new CARB amendments to be voted on this Thursday give refiners and oil producers all the major concessions they wanted. The revised proposal would deliver as much as $4 billion in new free emission permits with about half slated to go the oil industry, that's roughly $2 billion. CARB backed away from the toughest allowance cuts before 2030 and said that it would maintain billions of dollars worth of free allowances for refiners and other industries to protect jobs and avoid extra gasoline cost passthrough. Free allowances are meant to prevent "leakage" or the departure of key industries from California. But refineries are consolidating globally and there is no evidence that the presence or absence of free allowances determine whether they stay or go. Nor does the presence of the cap-and-trade program do that.

CARB also made other concessions, including slightly raising the use of "offsets" versus allowances in which companies fund emissions reductions outside of California or instate outside their own California operations, a cheaper move often criticized for being more ineffective than cutting refinery emissions directly. 

"All of these CARB concessions simply allow the oil industry to continue to avoid accountability for pollution and delay a transition away from fossil fuels whose production and combustion sicken people and the climate," said Liza Tucker, research director for Consumer Watchdog.

This Memorial Day weekend Newsom called on California consumers to sidestep Chevron gas stations for ripping them off. "Californians, if you're hitting the road this holiday weekend, be sure to AVOID Chevron….Big Oil is already making billions off Trump's Iran War; don't let them rip you off even more by overpaying for the brand name," Newsom's office posted on social media.

When the price gouging law, SBx1-2, was signed Newsom said, "California took on Big Oil and won. We're not only protecting families, we're also loosening the vice grip Big Oil has had on our politics for the last 100 years." 

Last year, the legislature extended California's system of cap-and-trade requiring polluters to buy pollution allowances on a trading market to cover their greenhouse gas emissions from 2030 to 2045. CARB was directed to write amendments to the program. CARB initially drafted rules tightening the number of emissions allowances on the market to achieve greater cuts in emissions. The revised rules loosen the allowances to the point of oil refiners possibly gaining more allowances than they use.

SOURCE Consumer Watchdog