Chevron calls Richmond’s proposed refinery tax ‘exhorbitant’

The director of Chevron’s Richmond refinery told media during a noon briefing today at a Chevron gas station that a November ballot measure asking voters to approve a refinery tax undermines the refinery’s viability and hurts consumers and employees.

The Richmond Refining Business License Tax ballot measure, passed unanimously by the City Council in May, would create a $1 per barrel tax that would bring an estimated $60 million to $90 million in General Fund revenue annually. The measure was brought to the council by Oakland-based and Richmond-rooted Asian Pacific Environmental Network and environmental justice group Communities for a Better Environment, which has an office in Richmond near the Metro Richmond Village, according to its website.

“It is no secret that California is an adversarial place for us to do business,” said Richmond refinery Director Tolly Graves, speaking to a group of about 10 journalists at the gas station. “This proposed tax is going to make it even harder on manufacturing here. It unfairly targets one refinery, the Chevron Richmond refinery, and puts us in a significant competitive disadvantage to the two other refineries that still exist here.”

A Public Records Act request showing the company’s most recent tax contributions to Richmond, however, shows that the Richmond refinery accounted for 20.1% of the city’s General fund in 2022-2023 and 15.7% of total city revenue. The information for 2023-2024 was unavailable at the time of the request in March.

Isa Flores-Jones, campaign communications manager with Asian Pacific Environmental Network, pushed back on Graves’ assertion that the ballot measure would target the manufacturing aspect of the refinery.

“The measure does not, in fact, target or tax manufacturing broadly — it would tax local refining, exclusively,” Flores-Jones said in an email to Richmondside.

The press conference, which was announced to the media by Chevron Wednesday afternoon, signals that Chevron does not plan to quietly stand down when it comes to being taxed — not surprising given that the company in 2009 won a court fight to overturn the 2008 business license tax, Measure T, which was narrowly passed by voters.

On June 28 Chevron filed a lawsuit against the city under a newly formed organization called the Coalition for Richmond’s Future, challenging the text of the ballot measure question as “false, misleading, and biased in violation of the California Elections Code.”

The lawsuit seeks an order prohibiting Richmond and the Contra Costa County Registrar from including that language on the ballot and the sample ballot and requests a judgment declaring that the use of public funds to prepare, print, and distribute the “biased ballot label” violates voters’ rights under the California Elections Code and under the U.S. and state constitutions. 

Graves said that although he did not have an opinion on the probability of the litigation’s outcome he felt good about the company’s arguments against it.

Kerry Guerin, an attorney for Communities for a Better Environment, disagrees with Chevron’s claim that the ballot measure contains improper language and said that the default practice is to include examples in ballot measures around the country — though it varies by jurisdiction.

“However the overwhelming majority are written exactly like the Richmond Refining Tax Measure,” Guerin said. “We are confident that the court will swat away this legal stunt for what it is.”

CBE maintains that Chevron can afford the tax.

“The local oil company made $21.4 billion in profit last year,” Guerin said. “They have the money.”

Caitlin Powell, spokesperson for the Richmond Chevron refinery, said Friday it is important to distinguish the company’s overall profits from the Richmond refinery’s contribution to that total figure.

“The Richmond Refinery represents a small part of Chevron’s U.S. downstream business and an even smaller part of Chevron’s global business, which is predominately upstream operations,” she wrote in an emailed statement.

According to Powell, upstream business is taking oil out of the ground while downstream refers to the refining process. All of Chevron’s U.S. downstream hubs — which include refineries in Richmond, El Segundo, Texas and Mississippi — accounted for about 13% of the company’s total assets as of the end of 2023.

“Richmond is a very small part of that 13%,” she said in a phone call Friday. “Within that 13% there are the four other refineries. There is the retail business, there’s chemical lubricants and additive business lines. That’s all of Chevron’s U.S. downstream. Richmond is just a piece of that.”

The city council, which approved its $500 million budget in June, is seeking to increase city revenue. While it has enough money to cover general operating expenses, for years it has accumulated an estimated $78 million in deferred maintenance for street repairs and infrastructure improvements at facilities such as fire stations and the main library branch, where buckets are scattered around during rainy seasons to collect water leaking through damaged ceiling tiles.

Chevron maintains that the proposed tax “radically” raises taxes on manufacturing and disadvantages consumers throughout the Bay Area.

Graves said the tax would be “playing chicken with the city’s golden goose,” potentially putting the refinery and its revenue — which he said accounts for a quarter of Richmond’s General fund — at risk while raising the cost of living for residents in Northern California.

“We would welcome an opportunity to meet with the city’s leaders to talk about solutions that solve the city of Richmond’s fiscal problems in a way that doesn’t burden consumers,” he added. “We are here today to tell drivers, airline passengers and consumers that we are going to fight for them.”

According to Chevron’s “Approach to tax and transparency” report, which summarizes its 2023 IRS Form 10-K, the company’s  total income tax expense for 2023 was $8.2 billion, which included a U.S. federal income tax bill of $1.6 billion, a U.S. state and local income tax expense of $212 million and an international income tax expense of $6.4 billion. In addition, its total non-income tax expense for 2023 was $4.2 billion. Its worldwide tax rate is 27.6%, according to the report.

When asked about Chevron’s February settlement with the Bay Area Air Quality Management District — which included $20 million in fines for 678 violations over the last five years — Graves said the company is continuing to invest in reducing emissions.

“The things mentioned are in the past, and we look forward to continuing to work with the communities to invest in the kinds of things that they want us to do to be better neighbors,” Graves said.

Guerin said that CBE Action and the Asian Pacific Environmental Network have been rooted in the Richmond community for decades, organizing alongside Richmond residents to find ways to advance environmental justice for the community, including addressing the many negative impacts that oil refining has on life here.

“I think of the five to 11 premature deaths in Richmond each year that come from the particulate matter emissions from the local refiner. I think about all the childhood asthma and the elevated cancer rates. These are things the community has taken seriously for a long time, and the Richmond refining fax is the fruition of years of organizing, years of research and we are confident and excited about it moving forward,” Guerin said. 

Richmondside Editor-in-Chief Kari Hulac contributed to this report.

An earlier version of this story miskatenly stated that District 3 Councilmember Doria Robinson was not in attendance during the vote for the Richmond Refining Tax. It has been updates to reflect she was in attendance.