California's cap-and-trade system to boost fuel, electricity costs, Mike Wirth, head of Chevron's refining business, says

NEW YORK , October 28, 2011 () – Last week, California adopted a cap-and-trade system designed to eventually limit emissions of greenhouse gases.

The program will require oil refineries and other companies to buy permits to release certain amounts of greenhouse gases. The amount is expected to decline over time, spurring companies to find ways to run a cleaner operation.

California's businesses have criticized the program, which was adopted by the California Air Resources Board, saying it will hurt jobs by raising the cost of doing business in the state.

Mike Wirth, who runs Chevron Corp.'s refining business, was asked for his thoughts on California's new emissions limits. Chevron is headquartered in San Ramon, Calif. While the company is still analyzing how the new law will affect their businesses in the state, Wirth suggested that higher fuel and electricity costs are on the horizon.

QUESTION: How will California's new cap-and-trade law affect you? Will costs be passed on to the consumer?

RESPONSE: "California energy prices are some of the highest in the nation, whether you're talking about electricity or fuels...this is designed to drive prices higher. At some point, businesses have to confront that as do the consumers of those businesses' products. In a state where the economy is challenged, where employment is challenged and with a fiscal situation that is unsustainable, I think the effects here are predictable. We're on a policy path in California that I think is going to need to be addressed by policy makers over time."

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