BIG UPDATE: Chevron agrees to a $550 million settlement with California city

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According to Politico, In mid-August, the city of Richmond, California, secured a groundbreaking $550 million settlement from Chevron without the need for lawsuits or years of negotiation. Chevron, one of the world’s most powerful corporations, agreed to the payout after a local initiative proposed a tax on every barrel of oil produced at its century-old refinery in Richmond. The tax was slated to be voted on in the upcoming ballot, but Chevron moved quickly to settle and avoid a drawn-out public battle.

The unexpected victory reveals a powerful strategy that could inspire other cities to challenge large corporations with minimal conflict. Richmond’s plan to impose a 50-year tax, which would have left Chevron’s business operations at the mercy of voters, may have created a model for other local governments.

Ripple Effect Across California

Richmond’s success has already sparked interest from other communities. Mayor Eduardo Martinez hailed the deal as a transformative moment, stating, “Other communities too can require their polluters to do the right thing, either by negotiation, or by ballot measure.” In nearby Martinez, home to PBF Energy’s Martinez Refining Company, local activists are considering a similar tax initiative. Organizers from Richmond say that other California cities have also reached out for guidance on launching their own efforts.

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Statewide, businesses and activists have increasingly used ballot initiatives as leverage in negotiations. Recent examples include a $22 minimum wage campaign for fast-food workers, which led to a compromise of $20 per hour, and several other initiatives that were pulled after lawmakers reached legislative agreements.

Chevron’s Response and Future Implications

Chevron officials downplayed the Richmond deal, characterizing it as another in a series of tax agreements with the city. However, the speed with which the company settled raises questions about the viability of forcing polluting industries to defend their practices directly to voters. Some activists, like Heidi Taylor from Healthy Martinez, see this as an approach that could be replicated statewide or even nationally.

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A Movement Sparked by Fire

The roots of this new approach can be traced back to a fire at the Richmond Chevron refinery in 2012. On a windy evening that August, a blaze erupted, sending thick black smoke across the San Francisco Bay, prompting county-wide health warnings. The aftermath saw 15,000 residents seek medical treatment for respiratory problems, and Chevron later pleaded guilty to failing to repair faulty equipment, paying $2 million in fines.

The fire marked a turning point in the relationship between Chevron and the city. Activists from environmental justice groups, such as the Asian Pacific Environmental Network (APEN) and Communities for a Better Environment, had long opposed Chevron, but the disaster rallied more residents to their cause. Richmond’s local government, historically aligned with Chevron, even sued the company for years of neglect and safety lapses, resulting in a $5 million settlement in 2018.

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Paving the Way for Local Activism

The fire emboldened local groups to take a more aggressive stance against Chevron. In 2014, sustained community pressure helped extract a $90 million community benefits agreement from Chevron, in exchange for the approval of a controversial refinery modernization project. This victory, alongside a shift in local government representation, set the stage for Richmond’s more recent efforts.

Through leadership training, public awareness campaigns, and a growing progressive alliance, local activists empowered residents to demand more from Chevron. This created the conditions for the 2023 tax initiative that ultimately led to the half-billion dollar settlement.

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