Energizing California - Chevron

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Energizing California Milken Institute 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
Energizing California Milken Institute 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
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Energizing California - Chevron

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