Chevron Moving to Houston – Mabel SELL the House!!!

A couple of weeks ago, a fellow Realtor approached me – “Have you heard that Chevron is pulling out of San Ramon?”

Well, that rocked my boat!

Can you imagine anything worse for San Ramon, Contra Costa County and local East Bay real estate???

The loss of the area’s major employer – Chevron - would be a disaster.

I took a couple of deep breaths and asked the source of the rumor. Well, the grapevine – obviously not a good year or vintage.

I quickly called a fellow real estate agent that handles many relocations for top Chevron people. She advised that this rumor and question has been around a long time and is surfacing again because a couple of the top-dogs at Chevron will be reaching mandatory retirement in the next few years.

This is leading to renewed speculation that Chevron will consolidate it’s world headquarters in Houston, Texas.

According to my relocation Realtor associate, Chevron, in the last few years, has moved more executive staff into San Ramon than out of San Ramon. Her thinking is that Chevron may continue to consolidate some divisions in Houston, but she thinks Chevron is in San Ramon for the long haul.

Checking in with my Chevron Cousin

I have a cousin that works for Chevron. He travels the world for them and is pretty well connected in the corporation. Here is his reply to my email inquiry:

There has been talk for a year or more about Chevron moving out of Chevron Park. The main reason is that it is difficult to entice people to transfer there or start careers there because of the high cost of living.

San Ramon is the corporate HQ and houses the execs and their staffs and a number of corporate level admin groups. The technical HQ for the company is in Houston where we have no less than 5 or so large buildings scattered around the city with world wide operations groups and high level technical support departments.

A number of groups have already migrated from SR to here in the past two years.  No indication yet of when a mass migration may take place. However,  age demographics suggest that a large fraction of employees will reach retirement age in the next 3 yrs or so. This will cause some attrition in SR and ease the transition from there to Houston as new hires will be brought here. Hope this helps. I'll keep you posted if any news comes along.

More Chevron Cousin

My cousin followed up with another email a few days later:

See dialogue below which refutes the idea that the company may move out of SR anytime soon…..

Q:  By the way.  Is there any truth to the rumor that Chevron will move out of Chevron Park and transfer all departments elsewhere (such as Houston)?

A:  That's a rumor that I've never heard before.  They aren't saying anything to us about that!  I'd be pretty shocked.  We'd move but I bet 90% of folks here might not.

Q:  Don't know if this was any more than a rumor or perhaps an extrapolation of a trend over the past 2 years of migrating departments to Houston. 

A:  In fact the number of people here (San Ramon) has been growing- they are leasing more space in Bishop Ranch-1 next door to accommodate.  But the visible growth is in support groups and downstream (refining and marketing).  I think it makes sense for a lot of the upstream (oil field) technical and operations types to be in Houston vs here- although the Asia Pac upstream headquarters are here.

So, from what I can gather, this is just the resurfacing of a rumor that has yet to run its course. And as we all know, there is little that will stop a rumor – especially in this day of corporate suspicion and conspiracy theory.

As I heard one rumor-monger say – I don’t spread rumors, I merely disseminate speculation.

I think – Rest Easy San Ramon – is the word here. At least from three sources closer to the action than your humble real estate tech guy.

Rising Oil & Gas Prices are putting many American’s finances and vacation plans on the ropes. The housing industry, already hammered by the subprime meltdown, tighter lending standards and soaring foreclosure rates, is taking more abuse from unemployment and higher gas prices.

Summer is here and many people are having to rethink their vacation plans.

"Anybody who wants to drive their motor home up to Alaska better do it now while the supply of oil is cheap," says veteran oil geologist L.F. "Buzz" Ivanhoe. "It's not a joke. I hope I'm wrong as hell, but I fear that I'm not."

What’s interesting about this quote is that it is dated August 31, 1998 when gas hit $1.31 a gallon. It’s deja-vu all over again as Yogi Berra would say.

Here’s an interesting email from my cousin who works in the oil industry:

In light of current topics in the news I offer a few comments below and the attached sketch of the current status of worldwide crude supply. 
 
Regardless of who or how speculation has contributed to the abrupt rise in prices, the situation would not be ripe for such shenanigans if supply/demand were not so tight.  In the big picture, the noise about where US refineries source their oil makes little difference.  The market is global and pricing very liquid.  If you don't get it from Region A (Middle East) then you get it from Region B (Latin America) and someone else gets it from Region A for the same price (assuming same quality).  On the same token, if Hugo threatens to boycott shipments to the US he'll have to eat it because we have the only nearby refineries capable of handling the mostly heavy Venezuelan crude in the required volumes. 
 
To create the composite picture in the sketch, data was drawn form three sources:  Energy Information Administration, World Oil (a trade publication), and the CIA.
 
Salient points of the sketch include:
 
-  The Arab Gulf States control 65% of known crude oil proven reserves.  They hold the best hand in this game.
 
-  All of OPEC controls 79% of known proven reserves.
 
-  The US has about 2% of known proven reserves.
 
-  The US supplies 9% of the volume to the daily market and consumes 26% of daily supply.
 
-  US refineries procure about 12% of their crude supply from the Gulf States (not shown on the sketch)

 
A few issues:
 
1.  The long term issue is that the Gulf State kingdoms hold the key to the energy treasury.  They can fine tune their drilling and production rates as they see fit to extract the maximum umbrage from the users.  We will always be behind the curve with this arrangement as it plays out over the next 30 to 50 years.  Some think that Saudi Arabia will be unable to sustain production at their projected 12.5 mm bopd rate advertised for next year.  In other words, they will have reached "peak oil production" within their own reservoir base.  If so, that will worsen the price problem in the near future.
 
2.  The rest of the world is a bit perplexed that, in spite of its heavy consumption, the US has set considerable territory off limits to oil and gas development and chooses, instead, to rely on foreign sources because of low tolerance for environmental risk.  However, this smells of environmental imperialism - we ask the other producing countries to risk their environments on our behalf. 
 
3.  That said, the US will not be energy independent in our lifetime no matter what any politician or media talking head promotes regarding domestic oil production.  We passed that milestone decades ago.  However, there are a number of options that, when combined, can lessen the energy "trade gap" such as: develop more oil and gas domestically, build more nukes, develop more geothermal facilities, dig up tar sands, dig up oil shale, dig up coal, install a zillion windmills, install a zillion solar cells, drive smaller more efficient cars, build energy efficient structures, use better light bulbs, etc.  There is no silver bullet solution.  We will need to press all options to keep our standard of living from slipping away and prevent degradation of our economy.  An important bonus is that money spent on energy extracted or produced here remains within our own economy rather than ending up in someone's else's National Bank.
 
4.  The so called "hydrogen solution" is a non-starter.  It burns clean, but you must expend as much energy to tear molecules apart to create hydrogen as you get when you combust it in an engine.  It works well economically only if the initial energy is free or very low cost.  Extraction of free hydrogen from the atmosphere is also a non-starter - the cost of extraction in energy and dollars far exceeds its economic value.
 
5.  The bio-fuel option is attractive in some versions, however it eats up acreage that could be dedicated to other crops, or causes more untilled land to be torn up - both of which extract their costs in the food market or the environment.
 
5.  A piece of trivia:  Although Exxon is the largest US oil company by far, it is more properly termed Medium Oil than Big Oil.  That's because it is only the 14th largest oil company world-wide - the largest being Saudi Aramco, Kuwait Gulf Oil Co, Lukoil (Russia), etc., etc. The national oil companies have direct control and ownership of their reserves, whereas the US majors only control portions of their US reserves, and must reach contractual arrangements with foreign national oil companies to produce and export crude.  These deals are frequently terminated at the whim of the foreign gov't.  A tenuous existence.
 
Hope this clarifies some of the murk surrounding recent media hyperbole.

Greg McFadden
Chevron Corporate HES
OE Review Advisor

Spring is one of the most active times that companies start relocating employees. This allows the transferees to get their children registered for the new school-year in the town they are moving to.

All of our team members have been relocated for work nationally and internationally multiple times. We know from personal experience what families go through, emotionally and physically. Moving, especially with children, is a stressful process.

A team of experienced professionals familiar with the relocation process is invaluable for those relocating. Our service extends way beyond the sale of a home. We work closely with those relocating to the area to ensure that the whole family becomes familiar with the community and neighborhood. For those selling and moving out of the area, we remain in contact to assist with anything forgotten or unresolved so the client doesn’t have to jump on a plane and return to tie up loose ends that we can handle for them. 

We have an extensive local network a network of professionals that can be of help and have contacts throughout the country and industry that can help no matter where the move is to.

Unfortunately I still see people relocating that end up with new or unexperienced agents just because the relocation company has a relationship with a specific brokerage. In our neighborhood, one of the big brokerages has a home listed where the owners relocated several months ago. The listing agent has done limited marketing, has never done an open house himself but has newer agents take care of that. Newer agents often are more focused in picking up buyers than selling the listing. This is logical as they are new in the business and focused on building their client base and network.

Obviously, this can be a negative for the owner wanting more aggressive marketing of their home. We are a team of five professional Realtors that guarantee high quality service throughout the entire process. Working as a team, affords our clients with a great deal of direct personal contact with us.

In the East Bay we have represented many employees from renowned companies with their relocations, like Chevron, Nissan, Safeway, Toyota, Coca Cola, Tyco and even the Golden State Warriors. We have worked with all the major relocation companies.

We are ready to assist you with your relocation!

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