Who’s Doing Chevron’s Dirty Work in California?

June 12, 2024 | 1:11 pm
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Laura Peterson
Corporate Analyst & Advocate

Questioning fossil fuel companies is part of our mission, but each year the Union of Concerned Scientists (UCS) gets a chance to aim some choice words directly at corporate leaders during their annual shareholders’ meetings. At the end of May, I asked Chevron directors about a fake grassroots—or “astroturf”—group the company funded to the tune of $5.8 million last year to pump out disinformation about California’s energy policies. More and more shareholders have been pushing companies to stop funding these astroturf groups because of their role in the distraction, deception, and delay around climate change.

According to its most recent disclosure of trade association memberships, Chevron directed millions of dollars to a group named Californians for Energy Independence that characterizes itself as a coalition of 200,000 Californians but is actually funded by fossil fuel companies and industry organizations. The organization is part of a cluster of front groups lending their names to media campaigns aimed at defeating state legislation that attempts to rein in the oil and gas industry.

In a 2023 report outlining Chevron’s position on lobbying and engagement with trade associations, Vice President for Corporate Affairs Albert Williams says the company lobbies “ethically, constructively and in a nonpartisan manner.” My question: How does financing a front group that spreads partisan disinformation align with that statement?

Chevron opens a new front in the Golden State

Research by UCS and social scientists has shown that fossil fuel companies use trade associations as a vehicle for blocking climate policy, a kind of indirect lobbying. When such activity conflicts with a company’s public positions, it can create financial and reputational risks for the company and its shareholders. A 2015 survey by UCS and the international climate disclosure organization CDP found that few companies were willing to disclose their memberships or discuss whether their public stance on climate change aligned with the groups they funded (associations are not required by law to disclose their members or boards of directors).

Concern over the disconnect between private lobbying and public pledges has led institutional investors to push companies toward disclosing their trade association memberships. Chevron began publishing its list in 2018 after more than 30 percent of investors approved a resolution directing the company to disclose its “policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.”

Chevron initially published a list only of organizations that received $100,000 or more from the company, but now lists all its association memberships in order of how much money they receive. The most recent list, which covers the first six months of 2023, puts Californians for Energy Independence (CEI) at the top, a slot shared only with the American Petroleum Institute, the country’s largest oil and gas industry association. California lobbying records show Chevron gave CEI $5.8 million in 2023 and $1.2 million in 2024 to date.

According to its most recent tax filings, CEI is a nonprofit with a mission of “educating the public and advocating on sensible energy policies which promote economic development and energy security.” The organization’s tax-exempt status means it can use funds for advocacy without disclosing donor names. The organization appears to have only three employees, all of whom are primarily employed elsewhere: the chief financial officer is a lawyer with Nielsen Merksamer, a firm that works extensively on ballot initiatives and elections and was paid more than $1 million by CEI in 2022; the director is CEO of the California Independent Petroleum Association; and the president, Cathy Reheis-Boyd, happens to serve as president of the Western States Petroleum Association (WSPA).

Reheis-Boyd is uniquely qualified to run a front group, since WSPA practically wrote the book on fossil fuel astroturfing in the Golden State. Founded in 1907, Sacramento-based WSPA counts nearly every major US oil and gas producer as a member and has a history of aggressively opposing science-based climate policy. A leaked 2014 presentation by Reheis-Boyd laid out WSPA’s plan to attack climate-related policies like low-carbon fuel standards.

The plan involved the creation of more than a dozen front groups including CEI, according to some reports. Other groups have names like California Drivers Alliance, Californians for Affordable and Reliable Energy, and Fed Up at the Pump. WSPA funneled millions of dollars to the groups for billboards, radio spots, and other outlets for their misleading information about climate legislation. The strategy, exposed in UCS’s 2015 Climate Deception Dossiers, echoed the infamous 1998 American Petroleum Institute memo laying out a plan to spread uncertainty about climate science in order to keep the United States out of the Kyoto Protocol.

Chevron fights bills that protect people instead of profits

So what “ethical, constructive and bipartisan” activities could CEI have engaged in during 2023 that required so much money? A look through tax and lobbying documents offers some clues.

In September 2022, California Governor Gavin Newsom signed a bill prohibiting construction and operation of new oil and gas infrastructure within 3,200 feet of homes, schools, and other gathering places. Studies have shown that proximity to oil production facilities puts communities at a higher risk for asthma, cancer, and other chronic diseases. Oil companies and associations including WSPA immediately attacked the law, sponsoring a referendum that has suspended implementation of the law until the referendum goes to a vote this November. A report from a coalition of environmental groups formed to support the bill showed that oil-funded groups such as CEI spent $11 million on advertising in 2023 on Facebook ads falsely blaming the law for driving gas prices up in the state.

Newsom also signed a bill in March 2023 to investigate price gouging by the oil industry. The bill was intended to impose a windfall tax on companies raking in record profits while Californians were paying six dollars per gallon at the pump. But CEI, along with other groups sharing the same leaders and funders, sponsored a series of misleading ads on social media and television claiming the bill would make gasoline more expensive while making California dependent on foreign oil.

Chevron, headquartered in the Northern California town of San Ramon, has long opposed state environmental initiatives. The company wrote off around $2 billion from its 2023 earnings as “impairments . . . due to continuing regulatory challenges in [California] that have resulted in lower anticipated future investment levels.” The year 2023 also saw the filing of a lawsuit by California Attorney General Rob Bonta charging several Big Oil entities—including Chevron and the American Petroleum Institute—with misleading Californians about the dangers of climate change.

Turn the page on the disinformation playbook

As my colleague Kathy Mulvey has described, corporate membership in trade associations was a common thread among our questions this year. We asked ExxonMobil, which withdrew from the Independent Petroleum Association of America last year because of “misalignment” on climate policy (such as IPAA’s operating front groups that spread disinformation), why it retained memberships in similar associations. An example is the American Fuel and Petrochemical Manufacturers, which is currently running an ad campaign falsely claiming that the US Environmental Protection Agency banned gasoline-powered cars.

The standard defense among oil and gas corporations is that trade associations advocate for many positions the companies do support. Companies also claim they can influence association positions better from the inside than from the outside. Chevron’s funding of CEI gives the lie to these arguments. By funding an astroturf group that has no visible ties to the company and pumps out messages that contradict facts, Chevron is resorting to the same disinformation playbook that created the need for climate accountability lawsuits like California’s. It’s way past time to close the book on these deceptive practices.