RICHMOND, California — In mid-August, this Northern California city extracted a half-billion dollar payout from Chevron, one of the most powerful companies in the world. It didn’t require a lawsuit, or a refinery disaster, or years of negotiations.
Instead, Chevron caved in the face of a local initiative that would have taxed every barrel it produced within Richmond’s city limits at its century-old, 3,000-acre plant just north of San Francisco. Within weeks of the tax being placed on the ballot, the oil and gas giant offered an unprecedented $550 million settlement to make it go away.
The local activists and city council who initiated the process had not set out to win a compromise, but they have revealed a new source of leverage that can be used to win concessions from large corporations with little political bloodshed. In doing so, they may have inadvertently created a playbook for other local governments by proposing a 50-year tax that would have left Chevron’s business future to the whim of voters.
“The community of Richmond has created a movement that will echo across the nation,” Mayor Eduardo Martinez said upon accepting a deal that will increase the city’s annual general fund by about one-quarter annually over a decade and dramatically shift its medium-term financial outlook. “Other communities too can require their polluters to do the right thing, either by negotiation, or by ballot measure.”
