Energizing California - Chevron

Energizing California 

Mapping Chevron’s Economic 

Impacts on the Golden State 

Ross DeVol, Perry Wong, Armen Bedroussian, 

and Benjamin Yeo 

March 2009

Acknowledgments 

This study was made possible by a grant from Chevron Corporation. 

About the Milken Institute 

The Milken Institute is an independent economic think tank whose mission is to improve the lives and economic 

conditions of diverse populations in the United States and around the world by helping business and public 

policy leaders identify and implement innovative ideas for creating broad-based prosperity. We put research to 

work with the goal of revitalizing regions and finding new ways to generate capital for people with original ideas. 

By creating ways to spread the benefits of human, financial, and social capital to as many people as possible—by 

democratizing capital—we hope to contribute to prosperity and freedom in all corners of the globe. 

© 2009 Milken Institute


Milken Institute 

CONTENTS 

Executive Summary .............................................................................................................................1 

Industry Profile and Economic Impacts...........................................................................................1 

Statewide Impacts ..........................................................................................................................2 

Regional Impacts ............................................................................................................................3 

Maintaining California’s Economic Growth and Diversity.........................................................4 

Meeting the Rising Demand for Energy ...................................................................................4 

Supporting Entrepreneurship and Developing Human Capital ........................................6 

Addressing Conservation..............................................................................................................6 

Building Social Capital ..................................................................................................................6 

Conclusion..................................................................................................................................................7 

Introduction.............................................................................................................................................9 

Industry Profile and Economic Impacts................................................................................... 11 

Background ............................................................................................................................................ 11 

Statewide Impacts ............................................................................................................................... 13 

Regional Impacts.................................................................................................................................. 18 

The Bay Area ................................................................................................................................. 18 

Bakersfield ..................................................................................................................................... 20 

Los Angeles..................................................................................................................................... 21 

Maintaining California’s Economic Growth and Diversity.............................................. 23 

California’s Challenges, Chevron’s Responses ............................................................................ 25 

Meeting the Rising Demand for Energy ................................................................................ 25 

Supporting Entrepreneurship and Developing Human Capital...................................... 28 

Addressing Conservation .......................................................................................................... 29 

Building Social Capital ............................................................................................................... 30 

Conclusion ............................................................................................................................................ 33 

Appendix ............................................................................................................................................... 35 

Methodology ......................................................................................................................................... 35 

About the Authors ............................................................................................................................ 43



Executive Summary 

California is facing a host of economic challenges. While the state remains a leader in technology and innovation, 

long-term factors such as aging infrastructure and the high cost of doing business have eroded its competitive 

advantage. Today, the declining housing market and related job losses in construction and mortgage finance 

have placed the state in a worrisome fiscal position. California is confronting the prospect of a more severe 

downturn than the nation as a whole is predicted to experience. 

Energy, however, is one of the bright spots in an otherwise dreary economic prognosis. The energy sector 

has been a stabilizing factor in the state’s economy, stimulating increased investment in oil and natural gas 

exploration, production, and refining, and pursuing alternative and renewable energy solutions with new 

urgency. As the United States looks to meet its growing energy needs while working toward sustainability and 

security, many innovative California firms, both small and large, are emerging as key players in shaping America’s 

energy future. 

Chevron, as a homegrown California firm—the largest in the state in terms of revenue, and the only major 

energy producer actually headquartered here—is uniquely positioned to influence the state’s course. While the 

company maintains its core business of oil and natural gas, it has also expanded its operations in fields such as 

unconventional hydrocarbons, alternative and renewable energy, and energy efficiency. 

This report aims to quantify the role played by the energy industry as a whole, and Chevron in particular, 

in California’s current economy, with an eye toward the state’s long-range prospects for leadership in the 

energy field. 

• In 2007, Chevron employed 10,000 workers, who contributed earnings of $1.2 billion and output 

of $4.5 billion to California’s economy. 

• The figures above represent only part of the story. After incorporating all the multiplier impacts 

of the supply chain and consumption, Chevron’s presence in California directly and indirectly 

generated a total of 68,700 jobs, $3.9 billion in earnings, and $9.2 billion in output in 2007. 

• The energy industry as a whole employs 65,000 people in California, with a total ripple impact 

of 304,500 jobs, $16.3 billion in earnings, and $46.3 billion in output. 

• As of 2007, the Bay Area was home to 7,100 Chevron employees, while Bakersfield had more 

than 1,100 and Los Angeles was home to 1,460. The ripple effects further extend their impacts. 

Industry Profile and Economic Impacts 

For comparative purposes in this report, we have defined the energy sector as the eleven industry categories 

(based on the North American Industry Classification System codes) in which Chevron operates, mainly relating 

to the production, manufacturing, exploration, transportation, and marketing of oil and natural gas. For the 

purposes of this study, we do not include power generation as a part of the energy sector. By adhering to the 

NAICS codes that define Chevron’s California operations, we have created a strict apples-to-apples comparison 

1



between Chevron and other firms engaged in exactly the same types of economic activity in the state. In 2007, 

Chevron accounted for just over 15 percent of jobs generated by comparable parts of the energy industry 

statewide. Similarly, it was responsible for approximately one-fifth of the earnings and output generated by the 

industry in California. 

But these figures represent only a partial snapshot of Chevron’s effect on California’s economy. Beyond the 

direct impacts of the jobs at Chevron, the earnings and pension benefits paid out, the taxes collected and the 

output generated, the firm creates a broader economic ripple effect across many sectors. The extent of such an 

impact is typically determined by analyzing the length and characteristics of the supply chain throughout the 

region. The industry requires an extensive production infrastructure and a large proportion of highly skilled and 

specialized labor, including many researchers and engineers. 

The supply chain activity generates yet more income for the region’s residents, who in turn recycle it back into 

the economy. For example, in addition to consumer spending by engineers, refinery workers, scientists, and 

researchers, one should also consider spending by other business professionals, restaurant workers, retail clerks, 

real estate agents, and many others who are indirectly dependent upon the industry. 

To capture both the direct and the broader effects of Chevron and the overall energy industry on the California 

economy, we applied unique coefficients, known as “multipliers,” developed by the Bureau of Economic Analysis 

(BEA) for these eleven industry codes in the state of California and its regions. These multipliers capture and 

quantify the additional jobs, earnings, and output created beyond the firm and beyond the industry. 

Statewide Impacts 

Chevron 

The average annual earnings figure per employee at Chevron is significantly higher than the average earnings 

in the rest of California’s energy industry. Taking an even broader comparative view of productivity measures, a 

Chevron employee contributes nearly four times the gross state output as the average California employee in all 

industries. 

As shown in the table on page 3, Chevron employed almost 10,000 California workers in 2007 and contributed 

earnings of $1.2 billion and output of $4.5 billion to the state’s economy. Combining the state personal income 

taxes paid by Chevron’s employees, its corporate and property taxes, and the state and local sales and excise tax 

revenues generated by its activities, the firm contributed just under $2.0 billion in total taxes in 2007, providing 

a flow of revenue that helps to sustain government programs and state infrastructure. 

With an employment multiplier of 6.9, every Chevron job creates nearly an additional six jobs in other sectors. 

As its impact reverberated through all sectors of the economy in 2007, the company was responsible for 

generating an additional 58,700 jobs, for a total of 68,700 jobs in California. The petroleum-refining sector alone 

has an employment multiplier of 8.18—a level of impact exceeded by just two other sectors out of 473 in 

California (electronic computer manufacturing, with a multiplier of 16.0, and funds, trusts, and other financial 

vehicles, at 12.6). 

Much of Chevron’s contribution to California’s economy is indirect and thus less immediately apparent. 

Chevron’s total impact on earnings and output in the state added up to $3.9 billion and $9.2 billion, respectively. 

2



After incorporating the multiplier impacts, Chevron accounted for nearly 0.5 percent of the state’s total non-farm 

employment and gross output. In other words, Chevron is directly and indirectly responsible for one out of every 

250 jobs in California. 

High-paying Chevron jobs bring other long-term benefits to the state. Upon retirement, many former employees 

receive either lump-sum or annual payments. Based upon pension payments to California residents at the time 

of the distribution, roughly $200 million was distributed in 2007, creating a ripple effect that boosts the total 

income impact to over $330 million. 

Industry 

Some 65,000 people are directly employed by the energy industry in California, with an additional 239,500 jobs 

produced as a result of its ripple effects. The industry’s statewide earnings totaled almost $5.8 billion, 

with another $10.5 billion in indirect earnings. Statewide, the industry was responsible for a total of $46.3 billion 

in output in 2007. Chevron accounted for approximately one-fifth of the industry’s economic contributions 

in California. 

Economic impact summary 

California, 2007 


Industry-wide 

Direct 

impact 

Total 

impact 

Direct 

impact 

Total 

impact 

Employment (number of jobs) 9,934 68,674 64,924 304,454 

Earnings* (US$ millions) $1,223 $3,909 $5,777 $16,274 

Output (US$ millions) $4,543 $9,203 $23,033 $46,297 

Tax** total (US$ millions) $1,953 --- --- --- 

Pension (US$ millions) $207 $331 --- --- 

Sources: Bureau of Labor Statistics, Bureau of Economic Analysis, Moody's Economy.com, Chevron. 

*Earnings include bonuses; **Includes state and local taxes only. 

Regional Impacts 

The Bay Area 

Headquartered in San Ramon, Chevron has an especially strong presence in the Bay Area. It has a major 

refinery in Richmond, and Chevron Energy Solutions (CES), its energy efficiency and renewable power solutions 

subsidiary, is based in San Francisco. As of 2007, the Bay Area was home to 7,080 Chevron employees—71 

percent of the company’s total employment base in the entire state. The company’s presence generates an 

additional 30,000 jobs indirectly. Furthermore, the $970 million in earnings Chevron pays to its employees 

indirectly generates $1.5 billion in earnings elsewhere in the Bay Area. In addition to $2.7 billion in direct 

Chevron output, the firm stimulates another $1.7 billion in other sectors. 

Incorporating all of these subsidiary effects, the impact of the entire energy industry in the Bay Area comes 

to 77,300 jobs, $5.3 billion in earnings, and $10.5 billion in output. In this calculation, as in all of the regional 

totals given below, we have limited our definition of the energy industry to Chevron’s primary NAICS codes for 

comparative purposes. 

3



Bakersfield 

While Chevron’s economic contributions in the Bakersfield area may not equal its footprint in the Bay Area, they 

represent a significant piece of Bakersfield’s overall economy. The Kern River oil field, operated by Chevron, is 

the third-largest oil field in the state, producing more than 30 million barrels a year. In 2007, Chevron employed 

almost 1,140 workers in the Bakersfield area. The firm was responsible for distributing total earnings of $109 

million to its employees and contributing $492 million in gross state output. After accounting for the multiplier 

impacts, Chevron generates 5,000 jobs, $242 million in earnings, and $884 million in gross metro output in 

the area. 

A total of 22,000 jobs, $1.1 billion in earnings, and $3.8 billion in output in the Bakersfield region are tied back to 

the energy industry as a whole. 

Los Angeles 

One of Chevron’s prime assets in California is its El Segundo refinery. With a capacity of 260,000 barrels per day of 

crude oil, it is one of the largest facilities in the state. Overall, Chevron has more than 1,460 workers based in the 

region; in 2007 it disbursed $131 million in earnings and created $860 million in gross state output. Adding in 

indirect impacts, Chevron accounts for 10,000 jobs, $409 million in earnings, and $1.7 billion in output. 

A total of 98,000 jobs, $4.0 billion in earnings, and $16.8 billion in output in the Los Angeles area are tied back to 

the energy industry as a whole. 

Maintaining California’s Economic Growth and Diversity 

Because it is difficult to quantify the long-term value of many of Chevron’s early-stage investments, and because 

it is virtually impossible to assign a precise dollar value to many social contributions, this portion of the report 

takes a more narrative approach to describing the multiple areas of California’s economy that are impacted by 

Chevron. 

Meeting the Rising Demand for Energy 

Diversity is a key ingredient for building a sustainable economy—and diversity is one of the great hallmarks 

of the California economy, which can draw on vast natural and human resources. Its broad portfolio of energy 

assets—ranging from traditional oil and natural gas to more renewable and alternative forms, such as biofuels, 

wind, solar, and nuclear—gives California a head start as it searches for ways to cope with rising demand while 

mitigating environmental impact. 

Chevron is responding to the increasing demand for energy by making major investments in new production in 

the San Joaquin Valley and enhancing its refineries. All of the oil Chevron produces in California stays in the state, 

where it is refined into transportation fuel that meets the state’s stringent air standards. Chevron’s products and 

services are also mostly consumed in the state. 

Chevron is also making significant R&D investments in alternative energy, including “cellulosic” technology that 

can produce biofuels from nonfood sources. The firm has partnered with the University of California, Davis, on 

a multiyear research project exploring how agricultural waste can be used as a fuel source, and has set up a 

separate business unit to commercialize this technology. 

4



In 2007, Chevron announced the launch of Catchlight Energy LLC, a joint venture with Weyerhaeuser, the forest 

products company. Catchlight’s objective is to combine the technology and expertise of both companies to 

research and develop technology for converting cellulose-based biomass into economical low-carbon fuel. 

Solar energy is yet another option with great potential in California’s sunny climate. In 2007, Chevron Energy 

Solutions (CES) participated in an $11.9 million initiative to design and build a solar-powered project that 

generates renewable power for California State University, Fresno, creating a project that can serve as a template 

for future green development. Chevron Energy Solutions also completed the U.S. Postal Service’s largest solar 

and energy-efficiency system, at the USPS Processing and Distribution Center in Oakland. It reduces the center’s 

purchased power by more than one-third. Chevron Energy Solutions has installed other energy-efficiency and 

renewable power systems for the Postal Service at other locations throughout Northern California. 

The Collaborative for High Performance Schools awarded CES with the 2008 Green Apple Award for Climate 

Change, in recognition of their efforts helping school districts develop energy efficiency and solar energy 

solutions. Among their projects, CES is building and maintaining a 5.4-megawatt solar power system for the San 

Jose Unified School District (California). With this in place, the district stands to enjoy energy savings in excess 

of $25 million. Furthermore, with a 25 percent reduction in its demand for utilities, the system will help reduce 

approximately 40,000 tons of carbon dioxide emissions, equivalent to planting 400 acres of trees. 

Chevron is also utilizing solar technologies to support its oil-field operations. In the San Joaquin Valley, CES 

collaborated with Energy Conversion Devices Inc. to complete Solarmine, the first photovoltaic facility in 

California to help power oil-field operations. 

• To enhance productivity, Chevron is making major investments in new production in the 

San Joaquin Valley and in upgrades of its refineries in El Segundo and Richmond. 

• Chevron is investing in alternative forms of energy, including “cellulosic” and solar technologies. 

In addition to implementing innovations that will improve its own energy efficiency, the firm 

also recycles water reclaimed from oil-field steam technology in Bakersfield. 

• In 2007, Chevron spent approximately $750 million on small, minority-, and women-owned 

businesses in the state of California. 

• The firm funds research and applied degree programs at California universities. In addition, 

Chevron employs approximately 250 graduates each year from the University of California system. 

• The presence of Chevron has a positive impact on sustained growth, public contributions, 

and civic engagement. 

5



Supporting Entrepreneurship and Developing Human Capital 

Chevron has a diverse venture capital strategy, with investments extending beyond its core focus on crude oil 

and natural gas. Over the years, the firm has accumulated vested interests in many early-stage and growing 

companies engaged in activities related to oil and gas, advanced technology, and renewable energy. 

Chevron is also attempting to improve the availability of highly specialized human capital in the state by 

establishing the Center of Excellence for research and academic training on Interactive Smart Oilfield Technologies 

(CiSOFT), a joint effort with the University of Southern California. The center supports cross-disciplinary research 

and collaboration in engineering, integrated media, and information sciences. CiSOFT offers a master’s degree 

program in petroleum engineering, producing graduates who will be at the cutting edge of innovations in oilfield 

operations. 

Addressing Conservation 

Chevron has been able to sustain high levels of production at its Kern River oil field through its use of steam 

technology. As a byproduct of this process, approximately 350,000 barrels of water are recycled each day for use 

in agricultural irrigation, mitigating the region’s water shortage. 

Chevron’s conservation efforts are not restricted to water-use issues alone. The firm has actively supported 

research on the possible benefits of using underwater oil rigs to form the basis of artificial reef habitats for 

marine life. While preserving the underwater portion of rigs is undoubtedly a money-saving strategy for 

Chevron, the firm hopes to prove that doing so would result in a win-win situation for the environment. 

Building Social Capital 

The presence of a large corporate headquarters can benefit its surrounding region in a variety of ways. 

Corporations actually headquartered in California are better positioned to recognize and address local 

challenges. 

Chevron’s supply network in California encompasses vendors in diverse industries, creating a foundation for a 

broad industry cluster that bolsters the entire state economy. 

The small- and medium-sized enterprises (SMEs) that typically benefit from this phenomenon can be important 

drivers of economic growth. Increasingly, many of these firms are headed by women or minorities, who may 

have difficulty leveraging the programs that are available to support their growth strategies. Chevron’s response 

to this issue is its Supplier Diversity/Small Business Program, an inclusive entrepreneurial initiative that includes 

training, outreach, and certification efforts. 

In addition, the presence of Chevron (as with any large corporate headquarters) has positive impact on 

sustained growth, public contributions to nonprofits, and civic engagement. 

6



Conclusion 

The energy industry as a whole exerts an outsized impact on job, wealth, and output creation in California, and 

Chevron drives a substantial portion of that economic benefit. The ripple effects of this industry extend deep 

into other sectors. 

In addition to its role as an important catalyst in the state’s current economy, the energy industry is charged 

with meeting the future needs of California’s growing population and paving the way for continued economic 

expansion. Developing the technology and infrastructure needed to incorporate new forms of renewable energy 

can usher in a new era of sustainable growth and prosperity—and other states are competing fiercely to take the 

lead in this exciting new field. Chevron, as the largest player in California’s energy industry, will play a major role 

in future state initiatives. 

7



Introduction 

This is a pivotal moment for California. With its long legacy of innovation, the state ranks among the world’s 

largest economies. But in recent years, California’s economic leadership has been gradually eroding. Today, 

with its housing market contracting, the state confronts an acute fiscal crisis. California is face-to-face with the 

prospect of a more serious recession and heavier job losses than the rest of the nation will experience. 

One of the bright spots in the state’s current performance is the energy sector, which has maintained its vibrancy 

and momentum. The industry directly generated more than $23 billion in output in 2007, while providing part of 

the fundamental infrastructure needed to support a growing population and every other sector of the economy. 

Chevron has engaged the Milken Institute to analyze the scope of its economic impact in California. Given the 

magnitude of the challenges currently facing the state, we agreed that this is an appropriate time to measure the 

full impact of California’s leading Fortune 500 company—not only to illustrate the importance of energy in the 

state’s economy, but to understand what California’s major firms are doing to address the issues we face. 

The Milken Institute has been eager to focus its research efforts on how recent developments in energy markets 

might impact California’s economy and what role California-based firms can play in shaping a national policy 

response. We have initiated discussions with several leading firms in the industry in hopes of creating a network 

of partners to explore the intersection of these issues. We are pleased that the Chevron Corporation has agreed 

to support an initial examination of the current parameters and future potential of the state’s energy industry, 

and we are hopeful that their data and expertise will enhance our continued research in this field. 

Headquartered in San Ramon, California, Chevron is one of the world’s largest energy firms and one of the state’s 

major employers, generating almost 10,000 high-paying jobs directly and some additional 59,000 jobs when 

considering its broader effects. In these uncertain times, Chevron’s presence in the state provides a muchneeded 

stabilizing influence. 

This study attempts to measure the economic footprint of the industry as a whole and of Chevron in particular, 

since it is impossible to fully map California’s energy landscape without understanding the role of the largest 

player in the state. In Part I, we will analyze the degree to which the presence of Chevron—and the overall 

industry—bolsters employment, consumer spending, and state revenue. We will also attempt to quantify the 

ripple effects and additional economic activity created by both the company’s and the industry’s suppliers and 

support services. Part II of this report will examine some of the specific challenges facing California and profile 

several Chevron initiatives meant to address these issues. 

California’s energy appetite is vast. With its population increasing by approximately 472,000 on average every 

year since 1980, demand grows ever larger. 1 But the pressing need to develop efficient and sustainable solutions 

is not just a challenge: It also represents an enormous economic opportunity. 

1 

California population, 1980 to 2007. Economy.com, U.S. Census Bureau. 

9



Throughout its history, the state’s vast natural resources have driven its economic development—and a new 

chapter of that story is unfolding today. As the United States looks to meet its growing energy needs while 

working toward sustainability and energy independence, California has the resources, the expertise, and the 

track record of innovation to lead the way. Chevron, as a homegrown California firm and the only major energy 

producer actually headquartered here, is positioned to play a key role in driving the state’s contribution to our 

national response. 

10



Industry Profile and Economic Impacts 

Background 

One of the world’s largest integrated energy companies, Chevron is primarily engaged in the production, 

manufacturing, and marketing of oil and natural gas, as well as the exploration, transportation, and marketing 

of fuels or petroleum products. While the company maintains its core focus on oil and natural gas, it has also 

expanded its operations in fields such as unconventional hydrocarbons, alternative and renewable energy, and 

energy efficiency. 

Following the discovery of oil in California’s Pico Canyon, Chevron was born as the Pacific Coast Oil Company 

in 1879. The business later changed its name to Standard Oil Company of California, and eventually became 

Chevron after the acquisition of Gulf Oil Corporation in 1984. 2 As California’s population swelled and new 

industries developed, the state’s demand for energy grew. Chevron expanded right along with the state’s 

economy, meeting this ever-escalating need. 

With its extensive oil and natural gas assets, Chevron is headquartered in California. It has long been a leader 

in the U.S. energy industry, and has more recently emerged as a key international player in renewable energy 

innovation. Its growth in recent years accelerated with the acquisitions of Texaco and Unocal. 3 As of 2006, 

Chevron ranked as the largest oil producer and the sixth-largest gas producer in California. 4 Through its 

operations, facilities, and partners, Chevron has a vast footprint in the Golden State. 

Analyzing the economic ramifications of Chevron’s presence in California is crucial to understanding the 

underpinnings of the state’s economic base and planning for California’s long-term prosperity. In order to 

present an accurate portrait of Chevron’s economic impacts in California, we performed a detailed multiplier 

analysis at the state and regional levels. We have identified not only the direct contributions created by Chevron 

in terms of jobs, earnings per employee, and output, but also the broader economic activity generated by the 

company. 

We have also attempted to assess the size of the industry as a whole so as to quantify Chevron’s role from a 

relative standpoint. Industry-wide impacts will account for Chevron and all other firms whose economic activity 

is classified in the eleven industry codes specified on page 12. 

2 

Chevron company profile, http://www.chevron.com/about/leadership/. 

3 

Ibid. 

4 

California Department of Conversation, Division of Oil, Gas, and Geothermal Resources, “Oil and Gas Statistics,” in 2006 Annual Report of the 

State Oil and Gas Supervisor (Publication PR06), p. 68. 

11



Based on the North American Industry Classification System (NAICS) and according to Bureau of Labor Statistics 

(BLS) guidelines, Chevron’s primary economic activity falls under the following eleven NAICS codes: 

Chevron's primary industries 

By NAICS code 

NAICS 

Code Industry 

211111 Crude petroleum and natural gas extraction 

212111 Bituminous coal and lignite surface mining 

324110 Petroleum refineries 

324191 Petroleum lubricating oil and grease manufacturing 

424690 Other chemical and allied merchant wholesalers 

424720 Petroleum and petroleum products merchant wholesalers* 

483111 Deep-sea freight transportation 

483113 Coastal and Great Lakes transportation 

486110 Pipeline transportation of crude 

531190 Lessors of other real estate property 

541320 Landscape architectural services** 

Sources: Office of Management and Budget, Chevron. 

*Except bulk stations and terminals; **Includes planning and designing the development of land areas for projects. 

The Bureau of Economic Analysis (BEA) assigns unique coefficients, known as “multipliers,” to these industry 

codes in order to help capture the extent of the economic impacts stemming from the industry and its location. 

Until we apply these multiplicative values to Chevron’s current size, it is difficult to fully grasp the firm’s total 

effect on the state economy. 

Multipliers enable us to quantify how employment, earnings, and output generated by an industry within a 

region ripple through and impact other regional economic sectors. In addition to providing data on an industry’s 

regional impact, economic multipliers also bring to light region-wide interdependencies and inter-industry 

relationships. It is important to highlight these relationships because they directly influence how regional 

economies respond to changes in long-term industry structures and business cycles. 

The jobs Chevron directly generates, the earnings per employee, the tax revenue it generates, and the output it 

creates comprise its direct impacts on the state economy. These direct impacts also have an additional, broader 

benefit: They immediately translate into economic stimulus for other sectors that support the industry (such as 

services, trade, and construction). 

Chevron’s presence creates an opportunity for supplier industries to service the company’s operations and 

meet its continuous demand for technological improvements and value-added services. An example of such 

an indirect impact occurs when the company hires subcontractors or contracts with vendors in support of its 

production processes. The extent of the impact is typically determined through the length and characteristics of 

the supply chain throughout the region. A longer and higher-quality supply chain has a greater overall impact in 

a region—and the employment multiplier for the petroleum refinery industry in California is relatively high. The 

industry requires an extensive production infrastructure and a large proportion of highly skilled and specialized 

labor, including many researchers and engineers. With this need comes a higher demand for supply-related 

goods and services, which are likely to stem from the same region. 

12



The cumulative employment and earnings per employee generated by all of this tightly interconnected 

activity ripples throughout the regional economy. This, in turn, generates still more income for the region’s 

residents, who recycle their earnings back into the local economy yet again. For example, consumer spending 

by engineers, refinery workers, scientists, and researchers boosts the income and spending of other business 

professionals, restaurant workers, retail clerks, real estate agents, contractors, and many others indirectly 

dependent upon the industry. Through these greater purchases of goods and services, wealth is created and 

sustained throughout a region. 

We will compare Chevron’s economic impacts with those of the industry as a whole. Industry-wide impacts 

will account for Chevron plus all other firms whose economic activity is classified in the eleven industry codes 

specified above. This will help to further clarify Chevron’s relative contribution to the state. 

Statewide Impacts 

While the energy sector can be defined in various ways, we have strictly limited our definition of the “energy 

industry” to the eleven industries (or NAICS codes) that make up Chevron’s California operations. This narrow 

definition (which excludes power generation, for example) allows us to make a more direct apples-to-apples 

comparison of Chevron’s impact versus the impact of its competitors. In 2007, Chevron constituted just over 15 

percent of the employment share industry-wide in California. Similarly, it accounted for 21.2 and 19.7 percent of 

the earnings and output generated in the industry, respectively. 

The average annual earnings figure per Chevron employee is significantly higher than the industry-wide average. 

In terms of productivity, an average Chevron employee yields $457,300 toward gross state output, about 

$102,500 higher each year than the average worker in the energy industry. It is worth noting that the average 

worker in California produces roughly $123,000 in terms of output, a comparison that highlights the extremely 

high productivity levels achieved by Chevron employees. Simply put, the average Chevron employee contributes 

nearly four times the gross state output produced by the average employee in California. 

Industry profile 


Chevron Industry-wide Share 

Employment (number of jobs) 9,934 64,924 15.3% 

Earnings* (US$ millions) $1,223 $5,776 21.2% 

Output (US$ millions) $4,543 $23,033 19.7% 

Earnings* per employee ($) $123,149 $88,972 --- 

Output per employee ($) $457,311 $354,765 --- 

Sources: BLS, Moody's Economy.com, Chevron. 

*Earnings include bonuses 

Chevron’s presence in the state has ramifications beyond the number of jobs it creates, the earnings it pays 

out, or its direct contribution to the state’s GDP. As shown in the table above, the direct employment of nearly 

10,000 Chevron workers in 2007 contributed substantially to the state economy in terms of earnings ($1.2 billion) 

and output ($4.5 billion). But in addition to the direct impacts of the firm, Chevron generated additional jobs, 

earnings, output, and taxes through a number of indirect and induced impacts. 

13



With an employment multiplier of 6.9, every Chevron job creates nearly six additional jobs in other sectors. 

As its impact reverberated through all sectors of the economy, the company was responsible for generating 

an additional 58,740 jobs in California in 2007 (see chart below). This notably high multiplier stems from 

the individual multipliers assigned by the Bureau of Economic Analysis (BEA) to the industries that Chevron 

comprises. For example, the petroleum-refining sector, one of the industries with which the company is primarily 

engaged, has an employment multiplier of 8.18. Among the 473 detailed industry multipliers provided by 

the BEA, only two other sectors in the state are assigned higher employment multipliers (electronic computer 

manufacturing at 16.0, and funds, trusts, and other financial vehicles at 12.6). 

Similarly, while the firm directly contributed $1.2 billion in earnings by employees 5 and produced $4.5 billion in 

gross state output, its total impact on earnings and output in the state economy added up to $3.9 billion and 

$9.2 billion, respectively. In short, after incorporating the multiplier impacts, Chevron accounted for nearly 0.5 

percent of the state’s total non-farm employment and gross output. 

Furthermore, the additional jobs indirectly generated through Chevron carry an average annual pay of $45,700, 

just slightly higher than the state average of $45,600. These include subcontractors, vendors, and other jobs that 

provide support to Chevron and its employees. 

Thousands 

70 

Chevron's total employment impact 


US$ billions 

4.0 

Chevron's total earnings impact 


60 

50 

40 

30 

Direct impact 

Indirect impact 

3.0 

2.0 

Direct impact 

Indirect impact 

20 

1.0 

10 

0 

Total Impact 

Sources: BEA, Chev ron, Milken Institute. 

0.0 

Total Impact 

Sources: BEA, Chev ron, Milken Institute. 

While the earnings multiplier accounts for the additional earnings per employee created in other sectors, it does 

not take into account the taxed portion of personal income paid to state government. By utilizing an effective 

income tax rate of 6.5 percent, we estimate that state personal income tax receipts stemming from Chevron 

employees accrued to over $79.0 million in 2007. At the same time, the state and local total sales and excise 

tax revenues generated through Chevron’s economic activity amounted to almost $1.5 billion. With corporate 

and property taxes included, the company and its employees contribute a total of just under $2.0 billion in tax 

revenues to state and local government. Roughly speaking, Chevron accounted for nearly 1.0 percent of state 

and local tax receipts in California in 2007. 

5 

This amount includes bonuses and executive bonuses. 

14



Chevron's economic impact summary 


Total 

Multiplier 

Direct 

impact 


impact 

Employment (number of jobs) 6.9 9,934 68,674 

Earnings* (US$ millions) 3.2 $1,223 $3,909 

Output (US$ millions) 2.0 $4,543 $9,203 

Tax** total (US$ millions) --- $1,953 --- 

Pension (US$ millions) 1.6 $207 $331 

Sources: BLS, BEA, Moody's Economy.com, Chevron. 

*Earnings include bonuses; **Includes state and local taxes only. 

Cumulatively, over the six years from 2002 to 2007, the company was responsible for $9.6 billion of state and 

local tax revenue, either directly or through the personal income tax payments of its employees. These taxes 

provide a flow of revenue that helps to sustain government programs and state infrastructure. 

Chevron’s pension distribution should also be accounted for when calculating the company’s full impact. The 

state benefits in numerous ways from having the company’s headquarters located here. The advantages of 

high-paying jobs extend well beyond the active period of employment. Upon retirement, employees are given 

either a lump sum or an annualized amount in accordance with their pension plan. That money is likely to stay 

in California, generating additional positive impacts. In 2007, the company paid out a total of $206.6 million in 

lump sum and annuity payments combined. 

Since these Chevron retirees are no longer in the work force, nor are they tied to the specific industry of which 

they were once a part, their expenditures would stem directly from the household sector (see Appendix on 

Methodology). Although their spending on goods and services would produce a relatively lower impact, it 

nonetheless yields additional economic activity. For every dollar spent from their pension amounts, an additional 

60 cents in output would be generated across all sectors of local economies. In 2007, the company’s pension 

distribution was responsible for generating an additional $124 million in gross state product after rippling 

through all sectors of the economy, amounting to a total impact of $331 million. The pension impacts are an 

ongoing contribution to the state’s long-term wealth, as money gets recycled back into the state economy. 

As a point of comparison, the industry-wide employment multiplier in California is 4.7; that is, each job created 

within the energy industry (as defined by the eleven NAICS codes that make up Chevron’s operations in 

California) generates an additional 3.7 jobs in other sectors of the state’s economy. The difference between 

Chevron’s multiplier and the industry-wide multiplier depends on how the industry-mix (the concentration of 

specific activities and job types) varies between Chevron and other firms. For example, 64.8 percent of 

Chevron’s California employees are engaged in petroleum refining, while the industry average in the state is just 

19.5 percent. 

15



Some 65,000 people are directly employed by the broader energy industry in California, with an additional 

239,500 jobs produced indirectly. The industry’s statewide earnings totaled almost $5.8 billion, with an additional 

$10.5 billion in indirect earnings, as earnings spread through various sectors of the state’s economy. 

Industry-wide economic impact summary 


Total 

Multiplier 

Direct 

impact 

industry-wide 

impact 

Employment (number of jobs) 4.7 64,924 304,454 

Earnings* (US$ millions) 2.8 $5,777 $16,274 

Output (US$ millions) 2.0 $23,033 $46,297 

Sources: BLS, BEA, Moody's Economy.com. 

*Earnings include bonuses. 

The secondary impacts add significant value to California’s overall wealth and provide a huge boost to the state’s 

economy. State-wide, the industry was responsible for a total of almost $46.3 billion in output in 2007. Of this 

amount, more than $23.0 billion in output is created directly by the industry, while $23.3 billion is generated 

via indirect impacts. It is worth noting that Chevron accounts for nearly one-fourth of the total job and earning 

impacts of California’s energy industry. The firm also represents about one-fifth of the total impact in terms of 

industry-wide output. 

Historically, Chevron has been a leading presence in the state’s energy industry. Not only has Chevron served as 

an anchor for other firms in the region, but it has also been able to sustain its job base over the years. Since 2002, 

the company’s overall employment base relative to the industry in California experienced moderate growth, 

increasing by 1.4 percentage points, from 13.9 to 15.3 percent. In fact, the company has captured a larger share 

of the industry-wide base in terms of earnings and output, having increased by 2.0 and 4.1 percentage points, 

respectively. 

Chevron's share of employment and output 

California, 2002 vs. 2007 

Percent share of industry 

20.0 

19.0 

18.0 

2002 

2007 

17.0 

16.0 

15.0 

14.0 

13.0 

Employment 

Output 

Sources: BLS, Moody's Economy.com, Chevron, Milken Institute. 

16



Chevron’s growth in California has much wider implications. Over the years, the company’s capital investments 

in the state have contributed towards workforce development and broadened the state’s high-skilled labor 

pool. In the last decade, the state has seen its manufacturing base erode as relatively high business costs have 

made it challenging for many companies to operate in the state. With manufacturing arguably one of the most 

critical elements of the state’s economy, it is imperative that California shore up and retain this employment 

base, which has long been the source of good jobs and economic opportunity. But while many other industries 

have come and gone, California’s energy sector has maintained its vibrancy. Even in today’s challenging 

business environment, the focus on alternative forms of energy, such as biofuels, solar, and wind, is creating new 

opportunities in support of increased technological innovation. 

The presence of Chevron creates a plethora of jobs and increases output in sectors other than its own. While the 

bulk of direct and indirect impacts are captured within the manufacturing and transportation industries, other 

sectors also benefit significantly, namely professional and scientific services, real estate, wholesale and retail 

trade, and finance. The pie chart below illustrates the distribution of economic activity, on average, as a result of 

a unit change across the eleven industries that Chevron comprises. 

Economic activity generated by Chevron 

Industries most impacted in California 

Information 

2.7% 

Manufacturing 

18.9% 

Transportation and 

w arehousing 

13.3% Real estate 

12.7% 

Health care 

2.9% 

Finance and insurance 

5.1% 

Other services 

7.4% 

Sources: BEA, Milken Institute. 

Professional and 

scientific services 

9.9% 

Wholesale and retail 

trade 

11.1% 

Mining 

11.9% 

The distribution of economic activity is fairly broad-based and includes a number of high-wage occupations 

across the state. Among high-tech sectors, 10.0 and 2.7 percent of the total impact, respectively, is generated 

within professional and scientific R&D and information services. In general, for every job Chevron creates, nearly 

six additional jobs are created either immediately outside of the related sector (i.e., manufacturing) or in an 

unrelated sector (i.e., health care or other services). The distribution mix of the final impact depends on the 

specific mix that Chevron employs. For instance, a job created in petroleum refineries would likely generate a 

higher proportion of jobs within manufacturing, whereas a job in oil and gas extraction would likely have more 

of an indirect impact in mining and real estate. 

The total impact distribution also varies significantly by region. For example, the overall multipliers in the Bay 

Area would reflect the fact that a higher concentration of Chevron activity falls under the refinery industry. 

17



Regional Impacts 

The Bay Area 

Chevron has an especially strong presence in the Bay Area, with its headquarters located in San Ramon. As of 

2007, the Bay Area was home to 7,080 Chevron employees, representing 71 percent of the company’s total 

employment base in the entire state. Also in that year, the company’s employment constituted 37.6 percent 

of all workers industry-wide within the Bay Area region. As indicated by the firm location quotient (LQ), 6 the 

company’s employment base relative to the industry is two-and-a-half times more concentrated in the Bay Area 

than it is in the state on average. Altogether, Chevron disbursed total employee earnings of $966 million and 

produced $2.7 billion in gross state output in the Bay Area in 2007, representing 42.9 and 43.7 percent of the 

industry-wide totals, respectively. 


Bay Area, 2007 

Chevron Industry-wide Share Firm LQ 

Employment (number of jobs) 7,081 18,826 37.6% 2.46 

Earnings* (US$ millions) $966 $2,252 42.9% --- 

Output (US$ millions) $2,669 $6,114 43.7% --- 

Earnings* per employee ($) $136,351 $119,621 --- --- 

Output per employee ($) $376,970 $324,751 --- --- 



Key Chevron operations in the Bay Area include (but are not limited to) a petroleum refinery, petroleum 

wholesalers, freight, and coastal transportation. With a capacity of 243,000 barrels of crude oil per day, 7 the 

Richmond plant is currently the third-largest refinery in the state. 

According to the NAICS classification, petroleum refining (part of the company’s downstream manufacturing) 

comprises more than 5,150 workers, or four out of every five workers employed industry-wide. Since Chevron’s 

primary line of business falls under this industry classification, many of the jobs located at its headquarters— 

including marketing, administrative, and corporate staff—are actually assigned under this category. For the 

purposes of this report, Chevron’s San Ramon headquarters includes executive management and key corporate 

functions. 

Other activity in the Bay Area includes Chevron’s deep-sea (oil and production shipping) freight and coastal 

transportation industries, which employ more than 320 workers. Interestingly enough, the company’s 

employment in this industry is 5 times more concentrated in the Bay Area than it is in the state as a whole (see 

the 2007 industry profile in the Appendix). Similarly, the firm’s petroleum wholesale business relative to the 

industry is nearly 3 to 4 times more concentrated than the state average. Chevron’s Oronite subsidiary, which 

6 

Location quotient (LQ) equals percent share of Chevron employment relative to industry-wide employment divided by that same share in 

California. So an LQ >1 indicates that Chevron employment in the specified industry is more concentrated in a region than it is in the state, 

on average. 

7 

California Energy Commission, Energy Almanac, “California Oil Refinery Locations and Capacities” (as of March 2006), http://www. 

energyalmanac.ca.gov/petroleum/refineries.html. 

18



produces additives that improve fuel performance, accounts for more than 11.2 and 11.3 percent of the jobs 

and output generated industry-wide, respectively. When accounting for its downstream marketing operations, 

Chevron’s petroleum wholesale business industry employs about 300 workers in the Bay Area, representing 26.4 

and 20.7 percent of employment and output, respectively, industry-wide. 

Chevron’s operations in the Bay Area include Chevron Energy Solutions, an energy services subsidiary focused on 

R&D and delivering energy efficiency solutions for a broad range of institutional customers. Although Chevron 

employs only 65 workers or 3.2 percent of all workers in this particular sector industry-wide in the region, it 

captures nearly double that share in terms of output, at 6.3 percent. (The preceding are 2007 employment 

numbers. As of 2009, Chevron employs 88 workers in this sector.) This subsidiary complements Chevron’s focus 

on innovation and R&D. 

Chevron’s overall employment multiplier in the Bay Area is 5.2. In other words, for every job Chevron employs 

in the region, an additional 4.2 jobs are generated immediately within or outside of the sector. In this case, the 

firm’s presence supports an additional 30,000 jobs. On top of the $966 million paid to Chevron employees in 

the form of earnings in 2007, an additional $1.5 billion in earnings were generated elsewhere in the Bay Area. 

The additional activity stems across a broad range of industries (e.g., third-party contractors, local suppliers, any 

services by these employees and their households). Similarly, in addition to the $2.7 billion of output Chevron 

produces directly, it creates another $1.7 billion in other sectors. 

Total 


impact 

Total 

industry-wide 

impact 


multiplier 

Industry-wide 

multiplier 

Employment (number of jobs) 5.2 36,858 4.1 77,324 

Earnings* (US$ millions) 2.5 $2,445 2.4 $5,333 

Output (US$ millions) 1.7 $4,437 1.7 $10,464 





The industry-wide employment multiplier, which is derived implicitly, is slightly lower, at 4.1, resulting in the 

creation of an additional 59,000 jobs. Once again, the difference in Chevron’s overall multiplier and the industrywide 

multiplier is determined by the specific industry mix employed by Chevron versus others firms engaged in 

the industry. 

Without question, Chevron’s operations in the petroleum refinery industry generate the biggest impact 

throughout the region. The company as a whole constitutes 45.8 and 42.4 percent of the total impact industrywide 

in terms of earnings and output, respectively. 

19



Bakersfield 

In 2007, Chevron employed almost 1,140 workers in the Bakersfield area. As a result, the firm was responsible for 

distributing total earnings of $109 million to its employees and contributing $492 million in gross state output. 

Overall, Chevron accounts for about a fourth of the region’s economic activity industry-wide. Based on its firm 

LQ, Chevron’s employment share of the industry is roughly 56 percent above that of the state average, further 

highlighting the importance of the firm to the region. 


Bakersfield, 2007 



Earnings* (US$ millions) $109 $457 23.8% --- 

Output (US$ millions) $492 $2,075 23.7% --- 





The bulk of the firm’s employment is captured in the crude petroleum and natural gas extraction industry, 

Chevron’s greatest asset in the area (as reported under NAICS code 211111). The company employs about 30.4 

percent of workers industry-wide in Bakersfield, California. In 2006, Kern County was responsible for 76 percent 

of the state’s oil production.The Kern River oil field, operated by Chevron, is the third-largest oil field in the 

state, producing more than 30.8 million barrels or roughly 14 percent of the state’s oil production. 8 In addition, 

Chevron also operates more than 35 percent of Midway-Sunset (also located in Kern County), which is currently 

the largest oil-producing field in the state. 9 

Other operations employed by Chevron in the region include petroleum extraction-related activities and pipeline 

transportation of crude, representing 11.7 and 14.0 percent of industry-wide employment totals, respectively. 

Accounting for multiplier impacts, Chevron is responsible for generating an additional 3,900 jobs, $133 million 

in earnings, and $392 million in gross metro output in the area. Relative to the industry, Chevron comprises 

over 23 percent of the total impacts in terms of earnings and output. Industry-wide, more than 21,800 jobs are 

created in Bakersfield when accounting for ripple effects. 



Total 


impact 

Total 

industry-wide 

impact 


multiplier 

Industry-wide 

multiplier 


Earnings* (US$ millions) 2.2 $242 2.4 $1,076 

Output (US$ millions) 1.8 $884 1.8 $3,788 



8 

California Department of Conversation, Division of Oil, Gas, and Geothermal Resources, “Oil and Gas Statistics,” in 2006 Annual Report of the 

State Oil and Gas Supervisor (Publication PR06), p. 66. 

9 

———, “Oil and Gas Produced, by Operator,” pp. 123–124. 

20



Given the area’s less diversified industry mix, Chevron’s operations in Bakersfield may have more critical 

implications in this local economy than in the rest of the state. In a region with a relatively low per capita income, 

the presence of Chevron generates higher-paying jobs, with earnings that are, in turn, recycled back into the 

local economy through higher purchases of goods and services. This redistribution of wealth around the region 

creates opportunities for local businesses and entrepreneurs to profit from the industry’s impacts. Since 2002, 

the company’s employment base has increased by 5 percentage points and now represents about a fourth of all 

the jobs in the industry. 

Chevron’s presence in Kern County not only generates additional economic activity but also supports the water 

needs of the region’s biggest asset: agriculture. This initiative is covered in detail in a subsequent section on 

“Addressing Conservation.” 

As global demand for oil increases, investment opportunities will become more worthwhile in the region. The 

need for newer and more efficient technological infrastructure supporting the industry will attract more firms 

and high-skilled labor into the area. 

Los Angeles 

One of Chevron’s key assets in California is its El Segundo refinery, located in the Los Angeles metropolitan area. 

Built in 1911, Chevron’s second refinery (hence the name “El Segundo”) played an important role in shaping the 

community that grew up around it, even lending its name to the area. The refinery provides roughly 1,175 jobs 

and is the one of the largest facilities in the state in terms of oil capacity, processing 260,000 barrels of crude 

oil per day. 10 Nearly one out of every three workers in the petroleum refinery industry in the Los Angeles area 

is employed through Chevron. Beyond the refinery sector, Chevron also employs more than 200 workers in 

petroleum wholesaling operations, accounting for nearly a fifth of this industry’s output in the area. 


Los Angeles, 2007 



Earnings* (US$ millions) $131 $1,416 9.3% --- 

Output (US$ millions) $860 $8,505 10.1% --- 





In this region, Chevron employs more than 1,460 workers, disburses $131 million in employee earnings, and 

creates $860 million in gross state output. The firm comprises 6.5 and 10.1 percent of the industry-wide shares 

of employment and output, respectively. More significant, however, is that each Chevron job, on average, 

produces an output of $587,000 in Los Angeles. Since the industry average in comparison is about $376,000, it 

further supports the notion that Chevron employees in the Los Angeles area account for a much greater share of 

productivity than the industry as a whole. 

10 

California Energy Commission, Energy Almanac, “California Oil Refinery Locations and Capacities” (as of March 2006), http://www. 

energyalmanac.ca.gov/petroleum/refineries.html 

21



The refinery in El Segundo and the Port of Los Angeles yield a complementary relationship based on geographic 

proximity, since the port provides an efficient means for crude oil transportation. Through its strong import 

capabilities, the refinery in turn becomes even more of a focal point, playing a key economic role in the industry’s 

sustainability and the region’s long-term prosperity. 

After accounting for the multiplier impacts, Chevron is responsible for creating 10,000 jobs in the region. 

For every single Chevron job in the Los Angeles area, nearly six additional jobs are created elsewhere in the 

region. Similarly, an additional $278 million and $841 million are generated in terms of earnings and output, 

respectively. In comparison, the industry-wide impacts contribute an additional 75,800 jobs, $2.6 billion in 

earnings and $8.3 billion in output to the region’s economic base. 



Total 


impact 

Total 

industry-wide 

impact 


multiplier 

Industry-wide 

multiplier 


Earnings* (US$ millions) 3.1 $409 2.8 $3,992 

Output (US$ millions) 2.0 $1,701 2.0 $16,840 



22



Maintaining California’s Economic Growth and Diversity 

The story of California’s development—dating all the way back to the Gold Rush and the initial discovery of oil— 

has largely been driven by the state’s wealth of natural resources. The abundance of this land has always drawn 

those seeking new opportunities. 

Today, with a population of approximately 35 million, California is the largest state economy in the nation and 

the eighth-largest economy in the world. The Golden State has long been considered a model of economic 

innovation and growth, effectively utilizing both its natural and human resources. 

Diversity is a key facilitator of a sustainable economy—and indeed, economic diversity is one of the great 

hallmarks of California. Agriculture is a $36.6 billion industry, generating $100 billion in economic activities. 11 

Building on California’s strength as a hub for shipping, with some of the nation’s key ports, agriculture represents 

nearly 10 percent of the state’s exports to foreign countries. 12 In addition, the state is also a major player in the 

entertainment, banking, and retail sectors. Among private non-farm-based industries, professional and business 

services (21.5 percent) and retail trade (16.1 percent) make up the most of the state’s industry mix. In recent 

decades, California has further evolved to become one of the most successful knowledge-based economies in 

the world, with strong information technology, aerospace, and biotech sectors. 

With leading academic institutions such as the University of California system, the California State University 

system, and top-flight private institutions like Stanford and the University of Southern California, the state 

maintains its appeal to businesses and investors seeking talented human capital. 

California’s non-farm industry breakdown 

By employment, 2007 

Transportation 

and warehousing 

4.25% 

Transportation 

and utilities 

4.80% 

Natural resources 

and mining 

0.25% 

Professional and 

business services 

21.52% 

Financial 

activities 

8.62% 

Manufacturing 

13.91% 

Retail trade 

16.06% 

Leisure and 

hospitality 

14.76% 

Sources: Moody's Economy.com, Milken Institute. 

Education and 

health services 

15.82% 

11 

California Department of Food and Agriculture, http://www.cdfa.ca.gov/. 

12 

California Legislative Analyst’s Office, “Cal Facts 2006,” http://www.lao.ca.gov/2006/cal_facts/2006_calfacts_econ.htm 

23



The previous figure illustrates California’s employment distribution using standardized industry classifications, 

thus highlighting the state’s diverse industry structure. Energy-related activities are captured across this broader 

spectrum of industries ranging from manufacturing to transportation. 

The following table provides a list of the twenty largest Fortune 500 companies in California. Their primary lines 

of business range from information technology to banking, retail, and entertainment. The synergies forged by 

these companies make California’s economy unique and very attractive to large capital investments. 

Company 

Top 20 Fortune 500 Companies in California 

2008 

Fortune 1000 

rank 2008 

Revenue 

2008 

Fortune 1000 

rank 2007 

Revenue 

2007 

Rank ($ millions) ($ millions) 

1 Chevron 3 210,783 4 200,567 San Ramon 

2 Hewlett-Packard 14 104,286 14 91,658 Palo Alto 

3 McKesson 18 93,574 18 88,050 San Francisco 

4 Wells Fargo 41 53,593 41 47,979 San Francisco 

5 Safeway 55 42,286 56 40,185 Pleasanton 

6 Intel 60 38,334 62 35,382 Santa Clara 

7 Walt Disney 67 35,882 64 34,285 Burbank 

8 Ingram Micro 69 35,047 70 31,358 Santa Ana 

9 Cisco Systems 71 34,922 77 28,484 San Jose 

10 Northrop Grumman 76 32,032 73 30,304 Los Angeles 

11 Apple 103 24,006 121 19,315 Cupertino 

12 Countrywide Financial 104 23,442 91 24,445 Calabasas 

13 Occidental Petroleum 123 20,206 124 19,029 Los Angeles 

14 Oracle 137 17,996 167 14,380 Redwood City 

15 DirecTV Group 143 17,246 160 14,756 El Segundo 

16 Google 150 16,594 241 10,605 Mountain View 

17 Gap 162 15,779 144 15,943 San Francisco 

18 Amgen 173 14,771 171 14,268 Thousand Oaks 

19 Health Net 179 14,108 189 12,908 Woodland Hills 

20 Sun Microsystems 184 13,873 187 13,068 Santa Clara 

Source: CNNMoney.com. 

City 

In 2007, Chevron was the top Fortune 500 company in California, ranking fourth in the nation by revenue. By 

2008, Chevron had climbed to the third position nationally and maintained its leadership in California. The firm 

has operations in more than 100 countries and employs 59,000 workers around the world. 13 

Today, Chevron continues to thrive in California through its operations in oil and natural gas production, and 

the refining, transportation, and marketing of high-value products. It is a ubiquitous presence in the state, 

with a network of approximately 1,500 dealer-owned and -operated service stations. It also conducts major 

R&D programs in California and manages a subsidiary, Chevron Energy Solutions, which implements energyefficiency 

solutions for institutional customers. 

13 

Stephen P. Turnipseed and Thomas M. Breedlove, 2005. Chevron San Joaquin Valley Strategic Business Unit. 

24



California’s Challenges, Chevron’s Responses 

California is facing more than its fair share of challenges. In the pages that follow, we will briefly examine a few of 

these issues, including energy demand, and discuss Chevron’s impact in these areas. 

While Part I of this report included precise measurements of Chevron’s presence in the California economy, the 

impacts discussed here are more difficult to quantify, but we have attempted to identify and describe individual 

programs and initiatives that specifically address the state’s unique set of challenges. Because Chevron is based 

right here in California, it is better positioned and more predisposed to respond to local conditions than other 

corporations that do business in the state but are headquartered elsewhere. 

Meeting the Rising Demand for Energy 

California is the most populous state in the nation—and that vast population creates an enormous demand for 

a reliable supply of energy. According to California’s Department of Finance, the state’s population is expected to 

exceed 44 million by 2020, and reach nearly 60 million by 2050. 

California produces 39 percent of the crude oil it consumes. Approximately $100 billion in annual energy 

expenditures is required to maintain California’s economic output, and to meet the needs of its burgeoning 

population. 14 The energy industry is vital to the state’s future. 

Chevron is actively responding to the rising demand for energy. The firm has made substantial investments 

in new production at its San Joaquin Valley Business Unit and has upgraded its refineries. These investments 

are focused on increasing the supply of transportation fuel in California, which must be specially processed 

to meet the state’s stringent clean air standards. In addition, the company has committed cumulative capital 

expenditures of approximately $2.2 billion toward the El Segundo and Richmond refineries (combined) between 

2003 and 2008. 15 

As illustrated in the following graph, California’s gasoline consumption grew at an even faster rate than its 

population from 1997 to 2005, climbing by almost 20 percent. 

California motor gasoline consumption 

Indexed growth, 1997 to 2005 

Indexed growth 1997 = 100 

160 

Real GDP Motor gasoline consumption 

Population 

150 

140 

130 

120 

110 

100 

1997 1998 1999 2000 2001 

Sources: BEA, Economy.com, Milken Institute. 

2002 

2003 

2004 

2005 

14 

Ibid. 

15 

Chevron Corporation’s Global Downstream Group. 

25



It is worth noting, however, that California’s GDP has increased at a dramatically faster rate than its population 

and motor gasoline consumption rates. The solid line in the graph on the preceding page shows that California’s 

motor gasoline oil consumption per unit of GDP decreased between 1997 and 2005. This suggests that California 

is growing, with higher productivity levels, and using its energy resources more efficiently. 

California has led the nation in the drive for greater energy efficiency. The state’s landmark alternative-energy 

initiatives aim to develop a clean energy portfolio. Under directions from Assembly Bill 1007 (Pavley, Chapter 

371, Statutes of 2005), the Energy Commission and the California Air Resources Board (ARB) must collaborate 

to execute a statewide strategy for the transportation sector to reduce dependency on traditional fuels and 

increase the use of alternative fuels. 16 The state is home to 12 percent of the U.S. population, but contributes 

only 6.2 percent of the nation’s greenhouse gas (GHG) emissions, as shown below. 17 

Percentage of population and GHG emissions 


Percentage 

14 

Percentage of U.S. population Percentage of U.S. emissions 

12 

10 

8 

6 

4 

2 

0 

United States 

Source: California Energy Commission. 

California’s 2003 Energy Action Plan outlined the state’s commitment to developing energy sources that are both 

cost-effective and environmentally sensitive. The plan is currently under review and will be updated to reflect 

current conditions. The process of achieving these goals will likely involve considerable investments to promote 

innovation in energy generation, infrastructure, and policies. 18 The viability of alternative energy sources will 

be vital to California’s success in meeting future energy demands while ensuring environmental sustainability. 

Between 2007 and 2009, Chevron plans to spend $2.5 billion in alternative-energy and energy-efficiency 

initiatives around the world, with the bulk of this spending allocated in California. 19 

In 2001, Chevron began evaluating the viability of hydrogen as a clean, alternative energy source. Hydrogen 

can be produced through solar and wind energy from sources such as biomass and water, and redistributed 

according to demand. When used in fuel cells, its byproducts are heat and water. The company is continuing to 

engage in research on hydrogen as a viable transportation fuel. 

16 

Ibid. 

17 

Susan Brown, “California Greenhouse Gas Emission Trends and Selected Policy Options” (California Energy Commission, 2004). 

18 

State of California, Energy Action Plan, 2008 update available for download at http://www.energy.ca.gov/energy_action_plan/index.html. 

19 

Chevron Corporation. 

26



In 2007 Chevron launched Catchlight Energy LLC, a joint venture with Weyerhaeuser, the forest products 

company. Headquartered in San Ramon, Catchlight Energy combines technologies and expertise from both 

companies to research and develop the conversion of cellulose-based biomass to economical low-carbon 

biofuels. In the same vein, Chevron has entered a multiyear research partnership with the University of California, 

Davis, to explore the development of purpose-grown nonedible feedstock as a fuel source; the firm has also 

created an internal business unit focused on commercializing this technology. 

Solar energy is yet another option with great potential in California’s sunny climate. The state can benefit 

tremendously from investments in concentrating solar power (CSP) plants. According to projections by the 

National Renewable Energy Laboratory, each dollar invested in CSP contributes about $1.40 to California’s gross 

state product (GSP), compared to between $0.90 to $1.00 for natural gas plants. 20 

In 2007, Chevron Energy Solutions (CES), a Chevron subsidiary, designed and constructed an $11.9 million solarpowered 

parking structure at California State University, Fresno, creating a project that can serve as one template 

for future green development. The resulting photovoltaic installation generates enough energy to power 700 

vehicles. Chevron aims to rely on this structure to produce 20 percent of campus electricity demand (equivalent 

to the energy needed to power 1,000 homes). The structure has an expected lifespan of 30 years, and will save 

the university more than $13 million in utility expenses. 21 

Also in 2007, CES completed an energy-efficiency and solar power system at the U.S. Postal Service (USPS) 

Processing and Distribution Center in Oakland as part of its focus on developing clean-tech solutions (including 

solar projects) to meet rising energy demand. The Postal Service’s largest system of its kind in Northern 

California, it reduces the center’s purchased power by more than one-third (or 11 million kilowatt hours) and 

eliminates 7,400 tons of carbon dioxide emissions every year. 22 This project is a part of a larger collaboration 

between Chevron and the USPS to improve energy efficiency at postal service facilities throughout Northern 

California. 23 

The Collaborative for High Performance Schools honored CES with its 2008 Green Apple Award for Climate 

Change, in recognition of its efforts in helping school districts develop energy efficiency and solar energy 

solutions. Among their projects, CES is building and maintaining a 5.4-megawatt solar power system for the San 

Jose Unified School District (California). Because of this project, the district stands to enjoy energy savings in 

excess of $25 million. Furthermore, the 25 percent reduction in its demand for utilities will “lower carbon dioxide 

emissions by 37,500 tons—equivalent to planting 400 acres of trees.” 24 

Chevron is also utilizing solar technologies to support its oil-field operations. In the San Joaquin Valley, Chevron 

Energy Solutions collaborated with Energy Conversion Devices Inc. to build Solarmine, the first photovoltaic 

facility in California to power oil-field operations. It ranked as one of the largest amorphous-silicon solar facilities 

in the world when it was completed. 25 

20 

L. Stoddard, J. Abiecunas, and R. O’Connell, Economic, Energy, and Environmental Benefits of Concentrating Solar Power in California 

(National Renewable Energy Laboratory, U.S. Department of Energy, April 2006), available for download at http://www.nrel.gov/csp/ 

news/2006/510.html. 

21 

“Fresno State, Chevron Energy Solutions Complete Solar Parking Project, Largest at U.S. University,” Fresno State News, May 13, 2008 (http:// 

www.fresnostatenews.com/2007/11/solarwrapup2.htm). 

22 

Chevron, http://www.chevron.com/deliveringenergy/solar/. 

23 

“Chevron Installs Huge Solar PV System for U.S. Post Office,” Cleantech, http://media.cleantech.com/287/chevron-installs-huge-solar-pvsystem-f. 

24 

Reuters, “Chevron Energy Solutions Receives Green Apple Award for Climate Change,” September 11, 2008. http://www.reuters.com/article/ 

pressRelease/idUS164004+11-Sep-2008+PRN20080911 

25 

Chevron, http://www.chevron.com/deliveringenergy/solar/. 

27



Supporting Entrepreneurship and Developing Human Capital 

In the new intangible economy, R&D and entrepreneurial capacity are critical ingredients for growth. With top 

universities providing a strong knowledge base and large corporations responding to constant demand for 

services, California has a vibrant entrepreneurial environment that fuels creativity. 

As the largest California-based Fortune 500 company, Chevron is an active investor in the state economy. As 

it seeks to develop new technologies and enhance its business operations, Chevron has developed a venture 

capital model designed to spot fledgling companies that can strengthen its core competencies or introduce 

new growth opportunities. The firm’s investment portfolio focuses on enterprises that bridge the gap between 

Chevron’s needs and emerging technologies. The resulting flow of capital creates opportunity for California 

entrepreneurs. 

Chevron’s diverse venture capital strategy extends beyond its core focus on oil and gas. Over the years, 

Chevron has accumulated vested interests in many early-stage and growing companies engaging in oil and gas 

exploration and production, advanced technology, and renewable energy. In essence, the company is leveraging 

its investments in the latter two categories to support its oil and gas operations. 

The following table provides a list of major players in Chevron’s investment portfolio in California. Chevron works 

with these partners to align goals and synergize operations, with the aim of creating an efficient and collateral 

value-added supply chain. The firm’s wide strategic range of venture capital investments serves as an impetus for 

new companies in various industries to grow, thus supporting California’s entrepreneurial culture. 

Major companies in Chevron’s investment portfolio 

Company California location Industry 

Apprion Inc. Moffett Field Wireless technologies 

Artificial Muscle Inc. Menlo Park Mechanical technologies 

BlueArc Corp. San Jose Network storage 

BrightSource Energy Inc. Oakland Solar energy 

Codexis Inc. Redwood City Biochemical manufacturing 

Microfabrica Inc. Van Nuys Microdevices 

Radiance Technologies Inc. Sunnyvale Enterprise software 

SpectraSensors Inc. Rancho Cucamonga Gas analysis 

Sub-One Technology Pleasanton Material science 

California’s top universities represent a natural place to focus efforts to nurture human capital. From the 

University of California system, Chevron employs approximately 250 graduates each year to support its 

knowledge-driven operations. In December 2003, Chevron and the University of Southern California (USC) 

established CiSOFT, a Center of Excellence for research and academic training on Interactive Smart Oilfield 

Technologies, including sub-disciplines such as robotics, artificial intelligence, and immersive visualization. 

The Center capitalizes on the expertise of top research scientists from the Viterbi School of Engineering, 

the Integrated Media Systems Center (IMSC), and the Information Sciences Institute (ISI) at USC, as well as 

professionals from Chevron. 26 

26 

University of Southern California, USC Viterbi School of Engineering, http://cisoft.usc.edu/about/about-cisoft/. 

28



In addition to its research, CiSOFT offers a master’s degree program in petroleum engineering. The program aims 

to develop a base of engineers working on the cutting edge of the rapid technological innovations taking place 

in oil-field operations. 27 The Center’s research orientation and academic focus is designed to nurture and train 

highly skilled human capital, attracting new talent to the state and enhancing the quality of the labor pool. 

Addressing Conservation 

California is one of the nation’s most fertile agricultural regions, and seven of the state’s ten most productive 

counties are concentrated in the San Joaquin Valley. 28 Water supply is the most critical element in sustaining the 

Valley’s $20 billion agrarian economy, but resources are perennially strained. 29 

The region has initiated efforts to govern the allocation of water. A coordinated effort involving collaborations 

among nonprofits, businesses, and representatives from various sectors (including food, media, health, and 

community development) may be needed to address the water challenge. 30 

In the San Joaquin Valley, Chevron’s operations are centered in Bakersfield. Just north, the Kern River oil field was 

discovered in 1899 and has produced approximately 1.8 billion barrels of oil as of 2003, and has exceeded a daily 

rate of more 100,000 barrels. The oil field yielded its 2 billionth barrel of oil in 2007. Overall, the Kern River oil field 

is among the largest steam flood-operated oil fields in the world, and the sixth-largest in the United States. 31 

Chevron’s operations in Bakersfield are important components in its upstream and downstream activities. The 

former includes procurement and production, while the latter involves refinery upgrades for lower costs and 

higher yields. The firm’s use of steam technology to recover oil echoes a statewide effort to enhance oil recovery 

and production. To this end, Chevron has invested in BrightSource Energy, an alternative energy company based 

in Oakland, to explore the possibilities of using concentrated solar power in its operations. 

The most beneficial aspect of this technology in Kern River is the water that is produced as a byproduct of 

the high-pressure steam injections used to recover oil. With more than 900,000 barrels of high-quality water 

produced each day, Chevron put in place a system to recycle more than one-third of the water for irrigation. The 

system is governed by National Pollutant Discharge Elimination System permits that are issued by the California 

State Water Resources Control Board. 32 

The recycled water is channeled through a pipeline to the Cawelo Water District, where the agriculture industry 

has a pressing need for irrigation water. This is a common problem faced by Bakersfield’s farms, where limited 

water supplies inhibit growth in their industry. In 1996 Chevron and the Cawelo Water District received an Award 

for Distinguished Service in Environmental Planning from the State Water Resources Control Board. 33 

27 

Ibid. 

28 

Judith Redmond, “New Directions for the Sustainable Agriculture Movement: A Conversation about Strategy January 2005 and Beyond,” 

The Ecological Farming Association, http://www.eco-farm.org/efa/declaration/newdirections_judith.html. 

29 

California Partnership for the San Joaquin Valley, http://www.sjvpartnership.org/. 

30 

Redmond, http://www.eco-farm.org/efa/declaration/newdirections_judith.html. 

31 

Jim Waldron, “Produced Water Reuse at the Kern River Oil Field,” Southwest Hydrology 4, no. 6 (November/December 2005), available for 

download at http://www.swhydro.arizona.edu/archive/V4_N6/. 

32 

Ibid. 

33 

Business Roundtable, Water Brief for Business, http://waterbrief.businessroundtable.org/Questions/Industry.aspx?guid=383cb1b0-203c- 

4554-9c24-be2caf32bbf0. 

29



Chevron and Cawelo are collaboratively exploring the possibility of using constructed wetlands to improve the 

water-treatment system for use in agriculture. This is an instance in which the location of a homegrown anchor 

firm is proving to have wider collateral benefits to its region. Through its understanding of local conditions, 

Chevron was able to form a highly targeted response to the San Joaquin Valley’s ongoing water shortage. 

Chevron’s conservation efforts in California have extended beyond water-use issues. The presence of twentyseven 

oil rigs off the California coast has long been the center of heated debate regarding environmental 

protection and threats to marine life. But ironically, the submerged portions of these rigs may have the potential 

to become habitats for a variety of creatures. In 2001, legislation outlining an artificial reef plan was approved by 

California’s state legislature, but was vetoed by the governor, who cited the need for further study. 34 

As part of Chevron’s “Rigs to Reef” initiative, the California Artificial Reef Enhancement (CARE) Program was set 

up as a nonprofit organization dedicated to researching the role artificial reefs might play in the underwater 

ecosystem. Its board of directors is made up of members from Chevron, the United Anglers Association, Diving 

Unlimited International, and the Professional Association of Diving Instructors. 35 

Before this program existed, California law required oil companies to remove offshore oil rigs after expending 

the oil wells entirely. However, the removal process involves heavy machinery that needs to be imported from 

other continents. It also requires intensive use of diesel fuels that cause tremendous amounts of air pollution. 

Through a potential Rigs to Reefs program, Chevron would remove only the top half of an oil rig, preserving the 

submerged portions as habitats for marine life. While keeping these structures in place would obviously result in 

cost savings for Chevron and other oil companies, researchers have noted the abundance of sea life drawn to the 

rigs and questioned whether using these structures as man-made habitats might result in a win-win situation. 

This partial, rather than full, removal process can lead to savings in energy use and a reduction of pollution from 

diesel use. 36 

Building Social Capital 

The presence of a major anchor firm, particularly a leading Fortune 500 company, brings with it multiple benefits 

that percolate throughout the surrounding metropolitan region. Large corporations typically choose to base 

their operations in locations that offer strong knowledge assets and fundamental infrastructure that can be 

leveraged to create opportunities for growth. Cities compete fiercely to attract corporate headquarters for the 

obvious reasons—job creation and a larger tax base—but they also enjoy a range of subsidiary benefits. Some 

of these secondary advantages, such as the enhanced economic activity generated by a self-sustaining industry 

cluster, are macro effects, while others, such as community outreach programs, may be smaller in scale but 

specifically targeted to address social issues that can enhance the region’s quality of life. 

Anchor firms facilitate an upward spiral of entrepreneurship and assets, as related, self-sustaining industry 

clusters take root and mature. 37 This phenomenon can be seen throughout the nation, from the impact of the 

SAS Institute in North Carolina’s Research Triangle to the effect of Micron Technology on the currently booming 

34 

Dan Rothbach, “Rigs to Reefs: Refocusing the Debate in California,” Duke Environmental Law & Policy Forum 17, 283 (http://www.law.duke. 

edu/shell/cite.pl?17+Duke+Envtl.+L.+&+Pol’y+F.+283). 

35 

California State Lands Commission, http://www.slc.ca.gov/Division_Pages/MRM/Rigs_to_Reef/Whitepaper.html. 

36 

“Report on Rigs to Reefs Conference,” event held in Huntington Beach, California, in March 2007; report available for download at http:// 

www.coastkeeper.org/news/events/2007-03_rigs-to-reefs.asp. 

37 

Perry Wong, Benjamin Yeo, and Ross DeVol, Pittsburgh Technology Strategy (Milken Institute, 2006). 

30



economy in Provo-Orem, Utah, which was recently named the “Best-Performing City” of 2008. 38 Anchor firms 

generally make their surrounding regions more conducive to investments. 

The presence of a large anchor firm can be transformative for any given region. It is particularly instructive to 

look at the effect Wal-Mart has had on Bentonville, Arkansas. Any corporate headquarters is likely to serve as a 

magnet for related vendors eager to support the anchor’s extensive supply chain, thus laying the foundation 

for an industry cluster. Wal-Mart, as one of the world’s largest employers, has attracted a host of vendors to the 

region—including several firms that are themselves members of the Fortune 500. 39 

Similarly, Chevron’s supply network supports a wide range of vendors in diverse industries. Its corporate 

headquarters acts as a node around which these vendors can enhance their operations. Such networks lay the 

foundation for industry clusters, with production organized around its relationships. The cooperative business 

networks in California’s Silicon Valley played an important role in sustaining the region’s economic growth. 40 

Other major corporations like Chevron have a natural tendency to build business networks that will benefit 

the state. 

These supply chains often include small- and medium-sized enterprises (SMEs), which are increasingly important 

drivers of regional economic growth. Earlier in this report, in the section on “Supporting Entrepreneurship and 

Developing Human Capital,” we discussed Chevron’s investments in smaller enterprises that complement the 

firm’s operations. Yet many small businesses headed by women or minorities may be operating at a disadvantage 

during the crucial start-up phase. Chevron’s Supplier Diversity/Small Business Program was launched to 

develop a more inclusive entrepreneurial environment, tapping into the full range of ideas and talent found 

within California’s diverse population. In 2007, Chevron spent approximately $750 million on small, minority-, 

and women-owned businesses in California. The program, which includes training, outreach, and certification, 

improves opportunities for minority and female business owners, while broadening the state’s talent pool. 41 

To this end, Chevron has built partnerships with organizations such as the Small Business Administration, the 

Women’s Business Enterprise Council-West, the Northern California Supplier Development Council, and the 

Southern California Minority Business Development Council. 

The impacts of a large anchor firm are not restricted to the economic domain. On the education front, colleges can 

build curricula around the needs and the expertise of large corporations in the vicinity. In Arkansas, for example, 

NorthWest Arkansas Community College developed programs leading to a marketing analyst certificate specifically 

geared toward the operations of Wal-Mart, its vendors, and Tyson Foods, also located in the state. 42 

Efforts to develop targeted educational programs represent a convergence of interests, for corporations benefit 

along with the wider community from initiatives that successfully develop a high-quality work force. Earlier 

in this report, we described the CiSOFT program, a joint venture with Chevron and USC to provide advanced 

specialized training for engineers. Another Chevron program attempts to address education issues by reaching 

students at a much earlier age, improving public schools throughout the San Joaquin Valley. 

38 

Ross DeVol, Armen Bedroussian, Kevin Klowden, and Soojung Kim, Best-Performing Cities 2008: Where America’s Jobs Are Created and 

Sustained (Milken Institute, 2008). 

39 

Ross DeVol, Kevin Klowden, Jeffrey Collins, and Lorna Wallace, Arkansas’ Position in the Knowledge-Based Economy: Prospects and Policy 

Options (Milken Institute, 2004). 

40 

AnnaLee Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge, MA: Harvard University Press, 

1996). 

41 

Chevron, http://www.chevron.com/productsservices/supplierdiversity/. 

42 

DeVol, et al., Arkansas’ Position in the Knowledge-Based Economy: Prospects and Policy Options. 

31



The Energy for Learning Classroom Grant program was launched in 2008 to promote high-quality math and 

science instruction. 43 Through this program, Chevron issues individual grants to teachers based on creative 

classroom projects, in a competitive process that seeks to encourage innovative pedagogical approaches in 

math, science, reading, health, and safety training. The program also endeavors to prepare students for the 

workplace. 

The presence of a corporate headquarters typically sparks public contributions of about $10 million annually 

to local nonprofits. However, the headquarters of a larger firm can generate $25 million annually. 44 This can 

be at least partially explained by the larger concentration of high-income workers. In 2001, Chicago spent $63 

million in incentives in a bid to convince Boeing to relocate its headquarters in the Windy City. 45 The relocation 

did not include major production facilities, but did involve several hundred top-level executives. 46 This suggests 

the importance of high-income wage earners to a region on multiple levels, including civic engagement and 

contributions to local charities. 

Large anchor firms can impact a surprisingly wide range of social issues. In our own state, Union Bank of 

California Foundation was named by Goodwill as Benefactor of the Year in 2008 for providing financial support 

for education, training, and work-placement services in the Inland Empire. 47 In the Bay Area, Chevron led and 

sponsored the 2-1-1 community service, which directs low-income individuals and non-English-speakers toward 

resources that can provide help regarding in-home support, poverty, and mental-health counseling. Participants 

in the service include companies such as AT&T and PG&E. The 2-1-1 service not only addresses the needs of the 

most vulnerable residents of the Bay Area, but it also reduces the number of non-emergency calls to 9-1-1, thus 

making response times more efficient for everyone. 48 

43 

“Chevron Energy for Learning Classroom Grant Program,” http://wwwstatic.kern.org/gems/grants2/ChevronGrantApp.pdf . 

44 

David Card, Kevin F. Hallock, and Enrico Moretti, “The Geography of Giving: The Effect of Corporate Headquarters on Local Charities,” 

working paper, University of California, Berkeley, March 2008; available for download at www.econ.berkeley.edu/~moretti/wp.html. 

45 

Kyung Song, “The Man Who Moved Boeing to Chicago Comes Home,” Seattle Times, June 28, 2002. 

46 

Card, Hallock, and Moretti, “The Geography of Giving: The Effect of Corporate Headquarters on Local Charities.” 

47 

“Goodwill Southern California Honors Union Bank of California Foundation with Benefactor of the Year Award,” The Corporate Social 

Responsibility Newswire, http://www.csrwire.com/News/12355.html. 

48 

“2-1-1 Sponsors and Partners,” 211 Bay Area, http://www.211bayarea.org/partners.php. 

32



Conclusion 

The energy industry is a key component of California’s economy, and a substantial portion of its impact can be 

traced to Chevron, which is a significant driver of job, wealth, and output creation. This economic activity creates 

broad ripple effects. 

As California enters an economically challenging period, the energy industry is providing a much-needed anchor. 

Chevron, in particular, generates a stable employment base and a steady flow of state and local revenue, while 

stimulating economic activity in a variety of related sectors. 

The energy industry is charged with meeting the needs of California’s rapidly growing population and paving the 

way for continued economic expansion. At the same time, it is critical for the state’s energy providers to address 

efficiency and sustainability in the longer term. A farsighted yet practical energy agenda that leverages the 

state’s considerable R&D capacity will be needed to ensure California’s economic performance in the decades 

to come. 

Developing the technology and infrastructure needed to incorporate new forms of renewable energy can usher 

in a new era of sustainable growth and prosperity—and other states are competing fiercely to take the lead 

in this exciting new field. California’s enviable track record of innovation leaves it well positioned to seize this 

opportunity, and Chevron, as the largest player in the state’s energy industry, has the capacity to play a large role 

in shaping the outcome. 

33



Appendix 

Methodology 

With the exception of output, company-specific data (employment and earnings per employee) was provided by 

Chevron. Industry-wide data broken out by NAICS and by region was complied and processed from the Bureau 

of Labor Statistics (BLS) and Moody’s Economy.com. Chevron’s output at the six-digit NAICS level was derived by 

applying output data at the four-digit NAICS level from Moody’s Economy.com to the ratio of four- to six-digit 

wage shares from the BLS. For a few industries for which the government does not release data at the more 

detailed NAICS level, the next aggregate NAICS level data was compiled. For example, in the most extreme case, 

since the BLS does not disclose data for NAICS 4861 (pipeline transportation of crude oil), data at the industry 

level was compiled from its corresponding three-digit NAICS level (pipeline transportation). 

The Regional Input-Output Modeling System (RIMS II) developed by the Bureau of Economic Analysis (BEA) at 

the U.S. Department of Commerce was used to conduct the systematic economic multiplier impact analysis. This 

methodology uses the input-output structure of industries at the national and regional level to estimate the 

total impact one industry has on the wider economy. 

The employment, earnings, and output multipliers from RIMS are applied to the appropriate employment, 

earnings, and output estimates from the BLS and Moody’s Economy.com. The input-output matrix from RIMS 

provides the necessary coefficients, or multipliers, needed to estimate the total number of jobs and value 

of wealth generated in all other sectors through the energy industry. Thus, the total impact is calculated by 

applying the appropriate multiplier to the direct impact for employment, earnings, and output. The difference 

between the total and direct impacts comprises the indirect and induced portions of the impact. 

The employment and earnings multipliers are based on a direct-effect concept. In other words, these multipliers 

quantify how employment and earnings stemming from the industry directly impact employment and earnings 

across all industries. More specifically, the direct-effect employment multiplier measures the change in the 

number of jobs in all industries that results from a change of one job in the energy industry. In a similar fashion, 

the direct-effect earnings multiplier calculates the total dollar change in the earnings of households employed 

by all industries that results from a $1 change in earnings paid directly to households employed by the energy 

industry. Finally, the output multiplier is based on a final-demand concept. It measures the total dollar change in 

output in all industries that results from a $1 change in output delivered to final demand by the energy industry. 

Multipliers for the energy industry are unique for each geographic region. At the local level, multipliers can vary 

depending on the chain of supplier networks. The longer the chain, the less economic activity will leak into 

other areas. For that reason, multipliers at the state level are less prone to leakage than those at the metro level, 

and multipliers at the national level are even greater. In arriving at the state multiplier effects, the result from 

summing up all economic activity at the metro level will differ than the results produced at the state level. The 

discrepancy between the two multipliers stems from a leakage effect. 

The BEA multipliers are based on the 1997 national benchmark input-output (I-O) accounts, while incorporating 

2005 regional data as defined by North American Industry Classification (NAICS) system. Further documentation 

of the NAICS classification is provided by the Office of Management and Budget. 

35


By region and by NAICS code, 2007 

Region 

Bakersfield 

Bay Area 

Los Angeles 

Other 

California 

NAICS 

code NAICS description Employment Earnings* Output 

Earnings* per 

employee 

Output per 

employee Employment Earnings* Output 

Earnings* per 

employee 

Output per 


211111 Crude petroleum and natural gas extraction 1,013 $96,511,997 $427,788,843 $95,273 $422,299 3,333 $317,590,957 1,407,720,000 $95,273 $422,299 30.4% 30.4% 30.4% 1.00 

212111 Bituminous coal and lignite surface mining 0 $0 $0 $0 $0 0 $0 0 $0 $0 0.0% 0.0% 0.0% 0.00 

324110 Petroleum refineries 85 $8,737,105 $37,828,760 $102,789 $445,044 726 $85,911,383 371,967,718 $118,340 $512,372 11.7% 10.2% 10.2% 0.23 

324191 Petroleum lubricating oil and grease manufacturing 1 $88,287 $382,252 $88,287 $382,252 45 $2,220,706 9,614,917 $49,787 $215,559 2.2% 4.0% 4.0% 0.18 

48311 Deep-sea freight /coastal and Great Lakes transportation 0 $0 $0 $0 $0 3 $126,000 331,891 $42,000 $110,630 0.0% 0.0% 0.0% 0.00 

486110 Pipeline transportation of crude 39 $3,455,415 $25,656,947 $88,600 $657,870 279 $14,393,000 106,870,067 $51,588 $383,047 14.0% 24.0% 24.0% 11.04 

424690 Other chemical and allied merchant wholesalers 0 $0 $0 $0 $0 0 $0 39,398,382 $0 $0 0.0% 0.0% 0.0% 0.00 

424720 Petroleum and petroleum products merchant wholesalers*** 1 $81,321 $122,358 $81,321 $122,358 242 $32,048,601 48,221,189 $132,597 $199,510 0.4% 0.3% 0.3% 0.05 

531190 Lessors of other real estate property 0 $0 $0 $0 $0 134 $4,375,138 70,071,733 $32,652 $522,950 0.0% 0.0% 0.0% 0.00 

541320 Landscape architectural services**** 0 $0 $0 $0 $0 0 $0 21,228,561 $0 $0 0.0% 0.0% 0.0% 0.00 

Bakersfield total 1,139 $108,874,125 $491,779,161 $95,587 $431,764 4,762 $456,665,784 2,075,424,459 $95,903 $435,855 23.9% 23.8% 23.7% 1.56 

211111 Crude petroleum and natural gas extraction 889 $141,293,939 $59,237,897 $158,936 $66,634 2,925 $464,954,397 $194,933,491 $158,936 $66,634 30.4% 30.4% 30.4% 1.00 

212111 Bituminous coal and lignite surface mining 0 $0 $0 $0 $0 0 0 0 $0 $0 0.0% 0.0% 0.0% 0.00 

324110 Petroleum refineries 5,151 $703,219,304 $2,423,615,465 $136,521 $470,514 6,550 $962,022,554 $3,315,569,873 $146,872 $506,189 78.6% 73.1% 73.1% 1.55 

324191 Petroleum lubricating oil and grease manufacturing 89 $10,429,667 $35,945,406 $117,187 $403,881 402 $24,867,124 $85,703,486 $61,790 $212,958 22.1% 41.9% 41.9% 1.81 

48311 Deep-sea freight /coastal and Great Lakes transportation 326 $39,032,467 $37,569,133 $119,731 $115,243 1,141 $134,321,000 $129,285,283 $117,722 $113,309 28.6% 29.1% 29.1% 5.09 

486110 Pipeline transportation of crude 19 $1,697,243 $6,101,575 $89,329 $321,136 1,044 $49,815,000 $179,084,494 $47,716 $171,537 1.8% 3.4% 3.4% 1.44 

424690 Other chemical and allied merchant wholesalers 242 $33,115,647 $46,492,612 $136,842 $192,118 2,154 $293,121,123 $411,526,510 $136,077 $191,045 11.2% 11.3% 11.3% 3.91 

424720 Petroleum and petroleum products merchant wholesalers** 299 $27,703,394 $38,564,411 $92,653 $128,978 1,133 $133,805,123 $186,262,944 $118,048 $164,328 26.4% 20.7% 20.7% 2.88 

531190 Lessors of other real estate property 1 $245,511 $6,639,066 $245,511 $6,639,066 1,430 $50,745,112 $1,372,239,081 $35,488 $959,661 0.1% 0.5% 0.5% 0.81 

541320 Landscape architectural services**** 65 $8,767,351 $15,160,896 $134,882 $233,245 2,046 $138,390,940 $239,311,818 $67,638 $116,963 3.2% 6.3% 6.3% 3.18 

Bay Area total 7,081 $965,504,524 $2,669,326,461 $136,351 $376,970 18,826 $2,252,042,372 $6,113,916,980 $119,621 $324,751 37.6% 42.9% 43.7% 2.46 

211111 Crude petroleum and natural gas extraction 13 $611,571 $375,956,592 $47,044 $28,919,738 43 $2,012,491 $1,237,156,187 $47,044 $28,919,738 30.4% 30.4% 30.4% 1.00 

212111 Bituminous coal and lignite surface mining 0 $0 $0 $0 $0 0 $0 $0 $0 $0 0.0% 0.0% 0.0% 0.00 

324110 Petroleum refineries 1,175 $109,823,507 $383,271,817 $93,467 $326,189 4,127 $571,962,939 $1,996,087,002 $138,576 $483,614 28.5% 19.2% 19.2% 0.56 

324191 Petroleum lubricating oil and grease manufacturing 4 $487,637 $1,701,799 $121,909 $425,450 254 $14,784,553 $51,596,444 $58,300 $203,461 1.6% 3.3% 3.3% 0.13 



424690 Other chemical and allied merchant wholesalers $0 $0 $0 $0 3,623 $255,476,201 $874,927,897 $70,510 $241,475 0.0% 0.0% 0.0% 0.00 

424720 Petroleum and petroleum products merchant wholesalers*** 202 $13,670,649 $62,558,021 $67,676 $309,693 2,066 $78,607,014 $359,712,201 $38,053 $174,133 9.8% 17.4% 17.4% 1.07 



Los Angeles total 1,464 $131,074,710 $859,985,798 $89,532 $587,422 22,630 $1,416,055,119 $8,505,483,522 $62,575 $375,852 6.5% 9.3% 10.1% 0.42 

211111 Crude petroleum and natural gas extraction 68 $4,915,624 $467,796,066 $72,289 $6,879,354 224 $16,175,789 $1,539,371,324 $72,289 $6,879,354 30.4% 30.4% 30.4% 1.00 

212111 Bituminous coal and lignite surface mining 82 $4,279,451 $11,678,551 $52,188 $142,421 82 $4,279,451 $11,678,551 $52,188 $142,421 100.0% 100.0% 100.0% 1.00 

324110 Petroleum refineries 23 $3,120,886 $22,623,773 $135,691 $983,642 1,680 $110,641,387 $802,056,072 $65,845 $477,317 1.4% 2.8% 2.8% 0.03 

324191 Petroleum lubricating oil and grease manufacturing 1 $62,904 $456,000 $62,904 $456,000 103 $2,859,947 $20,732,183 $27,701 $200,812 1.0% 2.2% 2.2% 0.08 

48311 Deep-sea freight /coastal and Great Lakes transportation 0 $0 $0 $0 $0 456 $19,245,000 $52,501,066 $42,204 $115,134 0.0% 0.0% 0.0% 0.00 

486110 Pipeline transportation of crude 5 $361,188 $2,360,241 $72,238 $472,048 905 $37,059,000 $242,167,727 $40,949 $267,589 0.6% 1.0% 1.0% 0.44 

424690 Other chemical and allied merchant wholesalers 0 $0 $0 $0 $0 1,245 $67,405,414 $273,539,301 $54,143 $219,720 0.0% 0.0% 0.0% 0.00 



541320 Landscape architectural services**** 3 $395,246 $786,207 $131,749 $262,069 2,205 $132,127,526 $262,822,820 $59,911 $119,173 0.1% 0.3% 0.3% 0.14 

Other total 

250 $17,908,381 $521,839,432 $71,634 $2,087,358 11,147 $601,195,022 $5,313,263,630 $53,932 $476,645 2.2% 3.0% 9.8% 0.15 

211111 Crude petroleum and natural gas extraction 1,983 $243,333,131 $1,330,779,399 $122,710 $671,094 6,525 $1,492,396,000 $4,839,021,042 $228,704 $741,563 30.4% 16.3% 27.5% 0.45 

212111 Bituminous coal and lignite surface mining 82 $4,279,451 $11,678,551 $52,188 $142,421 82 $4,279,451 $11,678,551 $52,188 $142,421 100.0% 100.0% 100.0% 0.02 

324110 Petroleum refineries 6,434 $824,900,802 $2,867,339,815 $128,210 $445,654 12,660 $1,870,244,000 $6,816,765,171 $147,733 $538,464 50.8% 44.1% 42.1% 1.66 




424690 Other chemical and allied merchant wholesalers 242 $33,115,647 $46,492,612 $136,842 $192,118 8,416 $674,902,780 $1,620,788,991 $80,190 $192,578 2.9% 4.9% 2.9% 0.72 


531190 Lessors of other real estate property 7 $1,080,835 $27,799,772 $154,405 $3,971,396 8,147 $259,282,475 $6,206,446,864 $31,824 $761,767 0.1% 0.4% 0.4% 1.82 


California total 9,934 $1,223,361,739 $4,542,930,851 $123,149 $457,311 64,924 $5,776,442,546 $23,032,898,563 $88,972 $354,765 15.3% 21.2% 19.7% --- 


*Earnings include bonuses; 

**Location quotient (LQ) equals percent share of Chevron employment relative to industry-wide divided by that same share in California. So an LQ >1 indicates that Chevron employment in the specified industry is more concentrated in the metro than it is in the state, on average; 

***Except bulk stations and terminals; ****Includes planning and designing the development of land areas for projects. 


Industry-wide Share of industry 

Firm 

LQ**


By region and by NAICS code, 2002 

Region 

Bakersfield 

Bay Area 

Los Angeles 

Other 

NAICS 

code NAICS description Employment Earnings* Output 

Chevron Industry-wide Share of industry 

Earnings* per 

employee 

Output per 


Earnings* per 

employee 

Output per 


211111 Crude petroleum and natural gas extraction 944 $66,865,018 $425,009,424 $70,832 $450,222 3,344 $236,878,942 $1,505,657,012 $70,832 $450,222 28.2% 28.2% 28.2% 1.00 

212111 Bituminous coal and lignite surface mining 0 $0 $0 $0 $0 1,023 $17,008,810 $66,445,828 $16,626 $64,952 0.0% 0.0% 0.0% 0.00 

324110 Petroleum refineries 64 $4,573,924 $25,108,650 $71,468 $392,323 346 $25,845,690 $141,880,443 $74,606 $409,554 18.5% 17.7% 17.7% 0.41 

324191 Petroleum lubricating oil and grease manufacturing 0 $0 $0 $0 $0 0 $0 $0 $0 $0 0.0% 0.0% 0.0% 0.00 

48311 Deep-sea freight /coastal and Great Lakes transportation 0 $0 $0 $0 $0 2 $89,000 $236,506 $44,500 $118,253 0.0% 0.0% 0.0% 0.00 

486110 Pipeline transportation of crude 25 $1,583,624 $7,201,025 $63,345 $288,041 118 $7,206,000 $32,766,989 $61,068 $277,686 21.2% 22.0% 22.0% 15.72 

424690 Other chemical and allied merchant wholesalers 0 $0 $0 $0 $0 191 $15,156,000 $33,953,685 $79,351 $177,768 0.0% 0.0% 0.0% 0.00 

424720 Petroleum and petroleum products merchant wholesalers*** 1 $50,497 $43,382 $50,497 $43,382 182 $33,513,657 $28,791,597 $184,274 $158,310 0.5% 0.2% 0.2% 0.03 

531190 Lessors of other real estate property 0 $0 $0 $0 $0 141 $2,413,538 $84,102,436 $17,145 $597,435 0.0% 0.0% 0.0% 0.00 

541320 Landscape architectural services**** 0 $0 $0 $0 $0 72 $5,566,554 $7,640,527 $77,674 $106,614 0.0% 0.0% 0.0% 0.00 

Bakersfield total 1,034 $73,073,062 $457,362,481 $70,670 $442,323 5,419 $343,678,191 $1,901,475,025 $63,421 $350,891 19.1% 21.3% 24.1% 1.37 

211111 Crude petroleum and natural gas extraction 783 $85,558,196 $58,998,155 $109,270 $75,349 2,774 $303,102,214 $209,009,450 $109,270 $75,349 28.2% 28.2% 28.2% 1.00 


324110 Petroleum refineries 4,492 $381,569,165 $1,697,405,235 $84,944 $377,873 6,691 $653,992,219 $2,909,275,477 $97,748 $434,832 67.1% 58.3% 58.3% 1.50 



486110 Pipeline transportation of crude 16 $987,042 $3,141,199 $61,690 $196,325 1,081 $50,068,000 $159,338,210 $46,316 $147,399 1.5% 2.0% 2.0% 1.10 

424690 Other chemical and allied merchant wholesalers 206 $17,892,599 $29,337,609 $86,857 $142,416 2,566 $278,010,338 $455,839,804 $108,338 $177,636 8.0% 6.4% 6.4% 3.43 

424720 Petroleum and petroleum products merchant wholesalers** 901 $66,463,719 $122,137,615 $73,767 $135,558 1,299 $92,289,040 $169,595,735 $71,068 $130,600 69.4% 72.0% 72.0% 3.38 

531190 Lessors of other real estate property 0 $0 $0 $0 $0 1,220 $35,526,863 $677,995,225 $29,127 $555,868 0.0% 0.0% 0.0% 0.00 


Bay Area total 7,286 $610,101,293 $2,008,226,567 $83,736 $275,628 22,098 $1,761,247,108 $5,138,776,366 $78,838 $232,547 33.0% 34.6% 39.1% 2.37 

211111 Crude petroleum and natural gas extraction 18 $1,698,196 $17,548,995 $94,344 $974,944 64 $6,016,102 $62,169,837 $94,344 $974,944 28.2% 28.2% 28.2% 1.00 


324110 Petroleum refineries 1,151 $82,473,618 $412,934,083 $71,654 $358,761 4,232 $357,319,294 $1,789,048,650 $84,429 $422,722 27.2% 23.1% 23.1% 0.61 








Los Angeles total 1,522 $107,606,209 $538,191,510 $70,701 $353,608 23,800 $1,105,409,096 $6,093,855,513 $46,446 $256,045 6.4% 9.7% 8.8% 0.46 

211111 Crude petroleum and natural gas extraction 49 $3,104,329 $314,761,179 $63,354 $6,423,698 174 $10,997,532 $1,115,086,748 $63,354 $6,423,698 28.2% 28.2% 28.2% 1.00 


324110 Petroleum refineries 6 $796,612 $6,768,999 $132,769 $1,128,166 35 $2,340,517 $19,887,916 $67,193 $570,956 17.2% 34.0% 34.0% 0.39 

324191 Petroleum lubricating oil and grease manufacturing 1 $93,738 $799,078 $93,738 $799,078 95 $1,976,466 $16,848,513 $20,886 $178,045 1.1% 4.7% 4.7% 0.02 

48311 Deep-sea freight /coastal and Great Lakes transportation 0 $0 $0 $0 $0 440 $18,869,000 $47,186,548 $42,884 $107,242 0.0% 0.0% 0.0% 0.00 

486110 Pipeline transportation of crude 10 $608,667 $3,433,213 $60,867 $343,321 900 $34,951,000 $197,142,668 $38,834 $219,047 1.1% 1.7% 1.7% 0.82 



531190 Lessors of other real estate property 0 $0 $0 $0 $0 2,699 $77,155,002 $2,087,031,669 $28,583 $773,156 0.0% 0.0% 0.0% 0.00 

541320 Landscape architectural services**** 6 $624,195 $973,735 $104,032 $162,289 1,798 $83,401,465 $130,105,115 $46,379 $72,350 0.3% 0.7% 0.7% 0.30 

Other total 

150 $9,925,935 $339,135,231 $66,173 $2,260,902 21,535 $575,442,531 $4,998,267,502 $26,722 $232,102 0.7% 1.7% 6.8% 0.05 

211111 Crude petroleum and natural gas extraction 1,794 $157,225,738 $816,317,753 $87,640 $455,027 6,356 $773,882,359 $4,719,800,333 $121,766 $742,632 28.2% 20.3% 17.3% 0.55 

212111 Bituminous coal and lignite surface mining 0 $0 $0 $0 $0 6,440 $365,975,600 $1,310,679,564 $56,829 $203,522 0.0% 0.0% 0.0% 0.32 

324110 Petroleum refineries 5,713 $469,413,320 $2,142,216,966 $82,166 $374,972 12,798 $1,130,350,480 $5,601,417,573 $88,324 $437,686 44.6% 41.5% 38.2% 1.84 


California 



424690 Other chemical and allied merchant wholesalers 206 $17,892,599 $29,337,609 $86,857 $142,416 8,814 $568,649,712 $1,445,791,177 $64,516 $164,031 2.3% 3.1% 2.0% 0.87 

424720 Petroleum and petroleum products merchant wholesalers*** 1,233 $88,052,993 $212,797,840 $71,414 $172,585 6,006 $284,870,304 $724,347,076 $47,431 $120,605 20.5% 30.9% 29.4% 0.86 



California total 9,992 $800,706,499 $3,342,915,790 $80,135 $334,559 71,847 $4,176,092,010 $21,397,392,820 $58,125 $297,819 13.9% 19.2% 15.6% --- 


*Earnings include bonuses; 

**Location quotient (LQ) equals percent share of Chevron employment relative to industry-wide divided by that same share in California. So an LQ >1 indicates that Chevron employment in the specified industry is more concentrated in the metro than it is in the state, on average; 

***Except bulk stations and terminals; ****Includes planning and designing the development of land areas for projects. 

Firm 

LQ**

Chevron economic impacts 


Employment impact Earnings* impact Output impact 

NAICS 

codes NAICS description 

Employment 

multiplier 

(number of jobs) 

Direct 


impact 

Total 


impact 

211111 Crude petroleum and natural gas extraction 5.11 1,983 10,138 2.49 $243,333,131 $606,921,495 2.05 $1,330,779,399 $2,732,356,261 

212111 Bituminous coal and lignite surface mining 2.40 82 196 2.31 $4,279,451 $9,899,226 1.93 $11,678,551 $22,582,814 

324110 Petroleum refineries 8.18 6,434 52,646 3.46 $824,900,802 $2,856,219,028 1.98 $2,867,339,815 $5,681,347,109 

324191 Petroleum lubricating oil and grease manufacturing 4.52 95 429 3.17 $11,068,495 $35,126,976 2.66 $38,485,457 $102,409,802 

483111 Deep-sea freight transportation 6.94 163 1,131 4.60 $24,020,039 $110,554,632 2.59 $27,032,004 $70,118,315 

483113 Coastal and Great Lakes transportation 6.94 181 1,256 4.60 $17,376,242 $79,975,889 2.59 $19,555,115 $50,724,013 

486110 Pipeline transportation of crude 5.64 88 497 2.99 $7,201,901 $21,526,481 2.54 $41,057,674 $104,331,655 

424690 Other chemical and allied merchant wholesalers 2.66 242 643 2.08 $33,115,647 $68,930,220 2.16 $46,492,612 $100,475,185 

424720 Petroleum and petroleum products merchant wholesalers** 2.66 569 1,511 2.08 $46,011,403 $95,772,735 2.16 $112,986,631 $244,175,408 

531190 Lessors of other real estate property 2.74 7 19 3.12 $1,080,835 $3,373,936 1.75 $27,799,772 $48,760,800 

541320 Landscape architectural services*** 2.31 90 208 1.88 $10,973,792 $20,665,845 2.30 $19,723,822 $45,305,619 

Total 6.91 9,934 68,674 3.20 $1,223,361,738 $3,908,966,464 2.03 $4,542,930,851 $9,202,586,980 


*Earnings include bonuses; **Except bulk stations and terminals; ***Includes planning and designing the development of land areas for projects. 

Earnings 

multiplier 

(dollars) 

Direct 


impact 

Total 


impact 

Output 

multiplier 

(dollars) 

Direct 


impact 

Total 


impact 

Industry-wide economic impacts 


Employment impact 

Earnings* impact Output impact 

NAICS 

codes Name of Industry 

Employment 

multiplier 


Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

Earnings 

multiplier 

(dollars) 

Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

Output 

multiplier 

(dollars) 

Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

211111 Crude petroleum and natural gas extraction 5.11 6,525 33,361 2.49 $1,492,396,000 $3,722,334,103 2.05 $4,839,021,042 $9,935,478,003 

212111 Bituminous coal and lignite surface mining 2.40 82 196 2.31 $4,279,451 $9,899,226 1.93 $11,678,551 $22,582,814 

324110 Petroleum refineries 8.18 12,660 103,586 3.46 $1,870,244,000 $6,475,719,850 1.98 $6,816,765,171 $13,506,738,510 

324191 Petroleum lubricating oil and grease manufacturing 4.52 778 3,515 3.17 $45,926,667 $145,752,869 2.66 $176,205,165 $468,881,944 

48311 Deep-sea freight /coastal and Great Lakes transportation 6.94 6,128 42,523 4.60 $237,444,000 $1,092,859,754 2.59 $517,479,014 $1,342,288,813 

486110 Pipeline transportation of crude 5.64 6,952 39,241 2.99 $258,814,000 $773,595,046 2.54 $927,141,412 $2,355,959,043 

424690 Other chemical and allied merchant wholesalers 2.66 8,416 22,355 2.08 $674,902,780 $1,404,810,137 2.16 $1,620,788,991 $3,502,687,088 

424720 Petroleum and petroleum products merchant wholesalers** 2.66 6,222 16,526 2.08 $412,985,899 $859,630,149 2.16 $941,039,188 $2,033,679,789 

531190 Lessors of other real estate property 2.74 8,147 22,293 3.12 $259,282,475 $809,376,174 1.75 $6,206,446,864 $10,886,107,799 

541320 Landscape architectural services*** 2.31 9,014 20,859 1.88 $520,167,274 $979,579,010 2.30 $976,333,166 $2,242,637,283 

Total 4.69 64,924 304,454 2.82 $5,776,442,546 $16,273,556,319 2.01 $23,032,898,563 $46,297,041,085 


*Earnings include bonuses; **Except bulk stations and terminals; ***Includes planning and designing the development of land areas for projects.




NAICS 


Employment 

multiplier 


Direct 


impact 

211111 Crude petroleum and natural gas extraction 4.05 889 3,604 2.13 $141,293,939 $301,408,230 1.81 $59,237,897 $107,125,813 

212111 Bituminous coal and lignite surface mining 0.00 0 0 0.00 $0 $0 1.00 $0 $0 



483111 Deep-sea freight transportation 5.42 161 872 3.72 $23,830,190 $88,765,074 2.25 $22,936,792 $51,660,537 

483113 Coastal and Great Lakes transportation 5.42 165 894 3.72 $15,202,277 $56,626,962 2.25 $14,632,341 $32,956,422 


424690 Other chemical and allied merchant wholesalers 2.32 242 562 1.88 $33,115,647 $62,095,150 1.91 $46,492,612 $88,582,374 

424720 Petroleum and petroleum products merchant wholesalers** 2.32 299 694 1.88 $27,703,394 $51,946,634 1.91 $38,564,411 $73,476,772 

531190 Lessors of other real estate property 2.41 1 2 2.70 $245,511 $663,052 1.60 $6,639,066 $10,649,062 


Total 5.21 7,081 36,858 2.53 $965,504,523 $2,444,578,548 1.66 $2,669,326,461 $4,437,098,887 



Total 


impact 

Earnings 

multiplier 

(dollars) 

Direct 


impact 

Total 


impact 

Output 

multiplier 

(dollars) 

Direct 


impact 

Total 


impact 




NAICS 


Employment 

multiplier 


Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

Earnings 

multiplier 

(dollars) 

Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

Output 

multiplier 

(dollars) 

Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

211111 Crude petroleum and natural gas extraction 4.05 2,925 11,858 2.13 $464,954,397 $991,840,719 1.81 $194,933,491 $352,517,726 

212111 Bituminous coal and lignite surface mining 0.00 0 0 0.00 0 $0 1.00 $0 $0 



48311 Deep-sea freight /coastal and Great Lakes transportation 5.42 1,141 6,180 3.72 $134,321,000 $500,332,293 2.25 $129,285,283 $291,189,243 

486110 Pipeline transportation of crude 4.59 1,044 4,791 2.54 $49,815,000 $126,475,304 2.22 $179,084,494 $397,818,294 

424690 Other chemical and allied merchant wholesalers 2.32 2,154 5,003 1.88 $293,121,123 $549,631,418 1.91 $411,526,510 $784,081,460 

424720 Petroleum and petroleum products merchant wholesalers** 2.32 1,133 2,632 1.88 $133,805,123 $250,897,986 1.91 $186,262,944 $354,886,787 


541320 Landscape architectural services*** 2.07 2,046 4,237 1.73 $138,390,940 $238,862,762 2.05 $239,311,818 $490,278,122 

Total 4.11 18,826 77,324 2.39 $2,252,042,372 $5,372,344,298 1.71 $6,113,916,980 $10,463,562,415 





Employment impact Earnings* impact 

Output impact 

NAICS 


Employment 

multiplier 


Direct 


impact 

211111 Crude petroleum and natural gas extraction 4.14 1013 4,195 2.10 $96,511,997 $202,819,961 1.75 $427,788,843 $748,416,581 


324110 Petroleum refineries 7.78 85 661 3.43 $8,737,105 $29,958,660 1.98 $37,828,760 $74,768,545 

324191 Petroleum lubricating oil and grease manufacturing 3.57 1 4 2.54 $88,287 $224,619 2.18 $382,252 $833,157 

483111 Deep-sea freight transportation 4.81 0 0 3.24 $0 $0 2.05 $0 $0 

483113 Coastal and Great Lakes transportation 4.81 0 0 3.24 $0 $0 2.05 $0 $0 


424690 Other chemical and allied merchant wholesalers 2.30 0 0 1.81 $0 $0 1.88 $0 $0 

424720 Petroleum and petroleum products merchant wholesalers** 2.30 1 2 1.81 $81,321 $147,142 1.88 $122,358 $229,935 

531190 Lessors of other real estate property 2.45 0 0 2.72 $0 $0 1.64 $0 $0 

541320 Landscape architectural services*** 2.08 0 0 1.70 $0 $0 2.00 $0 $0 

Total 4.43 1139 5,051 2.22 $108,874,125 $242,203,915 1.80 $491,779,161 $883,505,503 



Total 


impact 

Earnings 

multiplier 

(dollars) 

Direct 


impact 

Total 


impact 

Output 

multiplier 

(dollars) 

Direct 


impact 

Total 


impact 




Output impact 

NAICS 


Employment 

multiplier 


Direct industrywide 

impact 

Total 

industry-wide 

impact 

Earnings 

multiplier 

(dollars) 

Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

Output 

multiplier 

(dollars) 

Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

211111 Crude petroleum and natural gas extraction 4.14 3,333 13,804 2.10 $317,590,957 $667,417,395 1.75 $1,407,720,000 $2,462,806,140 


324110 Petroleum refineries 7.78 726 5,647 3.43 $85,911,383 $294,581,540 1.98 $371,967,718 $735,194,195 


48311 Deep-sea freight /coastal and Great Lakes transportation 4.81 3 14 3.24 $126,000 $408,429 2.05 $331,891 $679,513 

486110 Pipeline transportation of crude 4.85 279 1,353 2.62 $14,393,000 $37,711,099 2.31 $106,870,067 $246,827,106 

424690 Other chemical and allied merchant wholesalers 2.30 0 0 1.81 $0 $0 1.88 $39,398,382 $74,037,439 


531190 Lessors of other real estate property 2.45 134 328 2.72 $4,375,138 $11,907,814 1.64 $70,071,733 $114,651,370 

541320 Landscape architectural services*** 2.08 0 0 1.70 $0 $0 2.00 $21,228,561 $42,478,351 

Total 4.59 4,762 21,861 2.36 $456,665,784 $1,075,664,935 1.83 $2,075,424,459 $3,788,248,047 






NAICS 


Employment 

multiplier 


Direct 


impact 

211111 Crude petroleum and natural gas extraction 5.07 13 66 2.47 $611,571 $1,509,909 2.03 $375,956,592 $761,387,291 


324110 Petroleum refineries 7.71 1,175 9,056 3.25 $109,823,507 $356,706,751 1.88 $383,271,817 $720,972,615 

324191 Petroleum lubricating oil and grease manufacturing 4.50 4 18 3.14 $487,637 $1,531,668 2.63 $1,701,799 $4,469,776 

483111 Deep-sea freight transportation 6.70 2 13 4.45 $189,849 $845,456 2.58 $724,278 $1,868,855 

483113 Coastal and Great Lakes transportation 6.70 16 107 4.45 $2,173,965 $9,681,316 2.58 $8,293,708 $21,400,254 


424690 Other chemical and allied merchant wholesalers 2.66 0 0 2.08 $0 $0 2.16 $0 $0 


531190 Lessors of other real estate property 2.72 5 14 3.11 $618,281 $1,924,030 1.76 $16,763,954 $29,427,444 


Total 6.83 1,464 9,997 3.12 $131,074,710 $408,928,187 1.98 $859,985,798 $1,700,619,886 



Total 


impact 

Earnings 

multiplier 

(dollars) 

Direct 


impact 

Total 


impact 

Output 

multiplier 

(dollars) 

Direct 


impact 

Total 


impact 




Output impact 

NAICS 


Employment 

multiplier 


Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

Earnings 

multiplier 

(dollars) 

Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

Output 

multiplier 

(dollars) 

Direct 

industry-wide 

impact 

Total 

industry-wide 

impact 

211111 Crude petroleum and natural gas extraction 5.07 43 217 2.47 $2,012,491 $4,968,639 2.03 $1,237,156,187 $2,505,488,711 




48311 Deep-sea freight /coastal and Great Lakes transportation 6.70 3,184 21,328 4.45 $97,503,000 $434,210,110 2.58 $371,975,409 $959,808,147 

486110 Pipeline transportation of crude 5.42 1,856 10,061 2.87 $81,613,000 $234,490,472 2.48 $335,478,194 $832,656,876 

424690 Other chemical and allied merchant wholesalers 2.66 3,623 9,635 2.08 $255,476,201 $532,463,498 2.16 $874,927,897 $1,891,944,084 

424720 Petroleum and petroleum products merchant wholesalers** 2.66 2,066 5,493 2.08 $78,607,014 $163,832,740 2.16 $359,712,201 $777,841,664 


541320 Landscape architectural services*** 2.30 3,809 8,747 1.87 $209,271,962 $391,296,715 2.28 $436,375,453 $993,190,530 

Total 4.35 22,630 98,416 2.82 $1,416,055,119 $3,991,637,756 1.98 $8,505,483,522 $16,840,440,863 





About the Authors 

Ross C. DeVol is Director of Regional Economics and the Center for Health Economics at the Milken Institute. 

He oversees research on comparative regional growth performance, technology and its impact on regional and 

national economies, and health-related topics. He is an expert on the intangible economy and how regions can 

compete in it. He is also an appointee to the California State Controller’s Council of Economic Advisors. He was 

the principal author of An Unhealthy America: The Economic Burden of Chronic Disease, a widely acclaimed report 

that brought to light the economic losses associated with preventable illnesses and estimated the avoidable 

costs if a serious effort were made to improve Americans’ health. He also authored America’s High-Tech Economy: 

Growth, Development and Risks for Metropolitan Areas and created the Best-Performing Cities index, an annual 

ranking of U.S. metropolitan areas that shows where jobs are being created. His other recent work involves the 

study of biotechnology and life-science clusters and their impact on regional economies. Previously, DeVol was 

senior vice president of Global Insight Inc., where he supervised the Regional Economic Services Group, served 

as the firm’s spokesman on international trade, and headed its U.S. Long-Term Macro Service. He is ranked 

among the “Super Stars” of Think Tank Scholars by International Economy magazine. DeVol earned his master’s 

degree in economics at Ohio University. 

Perry Wong is a Senior Managing Economist in the Regional Economics group at the Milken Institute. He is 

an expert on regional economics, development and econometric forecasting, and specializes in analyzing the 

structure, industry mix, development and public policies of regional economies. He has a background in demand 

analysis for regional utilities, and has provided consulting services to the American Petroleum Institute, analyzing 

the energy consumption patterns of U.S. industries. Wong designs, manages, and performs research on labor 

and workforce issues, the relationship between technology and economic development, and trade and industry, 

with a focus on policy development and implementation of economic policy in both leading and disadvantaged 

regions. He is actively involved in projects aimed at increasing access to technology and regional economic 

development in California and the American Midwest. His work extends to the international arena, where he is 

involved in regional economic development in southern China, Taiwan, and elsewhere in Asia. Prior to joining 

the Institute, Wong was a senior economist and director of regional forecasting at Global Insight Inc. He received 

a master’s degree in economics from Temple University. 

Armen Bedroussian is a Research Economist with the Milken Institute. He has extensive graduate training 

in econometrics, statistical methods, and other modeling techniques. Before joining the Institute, he was an 

economics teaching assistant at the University of California, Riverside, where he taught intermediate micro- and 

macroeconomics. Since coming to the Institute, Bedroussian has co-authored numerous studies, including 

The Impact of 9/11 on U.S. Metropolitan Economies, America’s Biotech and Life Science Clusters, Biopharmaceutical 

Industry Contributions to U.S. and State Economies, Economic Benefits of Proposed University of Central Florida 

College of Medicine, and An Unhealthy America: The Economic Burden of Chronic Disease. In addition to coauthoring 

annual reports on Best-Performing Cities, Bedroussian is also responsible for compiling the Milken 

Institute’s Cost of Doing Business Index; both of these studies have gained increasing popularity among business 

and policy leaders across the nation. Bedroussian earned his B.S. in applied mathematics and a master’s degree 

in economics from UC-Riverside. 

43



Benjamin Yeo is a Senior Research Analyst in the Regional Economics group at the Milken Institute. His 

expertise involves information technology planning and knowledge management for e-business and economic 

development; information systems/process management; and national information policy studies. Recent 

projects include the Keystone Workforce Cluster project in Pennsylvania, where he assisted in an analysis of 

the statewide IT work force; Pittsburgh’s Technology Strategy: SWOT Analysis, a study of Pittsburgh’s technology 

strategy; and research on Orlando’s newly approved Nemours Children’s Hospital, Nemours Children’s Hospital: 

Advancing Orlando’s Life Science and Economic Development. He received a Ph.D. in information science from 

the College of Information Sciences and Technology at Pennsylvania State University, and holds bachelor’s and 

master’s degrees from the School of Communication and Information at Nanyang Technological University in 

Singapore. 

44

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