Last fall Phillips 66 announced it will close its massive Los Angeles refinery complex (8% of the state’s refining capacity). Then in May Valero did the same for its Bay Area refinery.
So now…
The rare attempt by a state government to broker the sale of privately-owned infrastructure reflects its growing concerns over protecting fuel supplies in the most populous U.S. state and keeping a lid on prices…
California’s effort to save the refinery from closing also marks a shift from the focus of government policy in recent years to champion green initiatives and restrict fossil fuel usage, that has led to an often tense relationship between the state and oil companies…
The San Antonio, Texas-based refiner [Valero] is also reviewing whether to continue operations at the rest of its refineries in California, including the 91,300-bpd Wilmington plant near Los Angeles.
The saga of Benicia’s Valero Refinery may finally have an official end date. Despite legislators working around the clock to reverse the decision, Benicia City Manager Mario Giuliani told the Times-Herald on Monday that, “Benicia can now proceed with the closure of the refinery in April or possibly sooner.”…
“State officials have been working feverishly to explore other options since April, but it seems with no new news in the last few days, that the clear option that would make Valero stay didn’t work in their best interests,” Giuliani said…“Now we’re going to have significant and seismic changes,” the city manager said.
While Valero is a big part of Benicia business, is it not without its critics — particularly after the refinery became the site of a series of air pollution incidents. This includes a hydrogen vent at the refinery that had been leaking 2.7 tons of toxics into the air for 15 years. That discovery resulted in an historic $84 million fine imposed by the Bay Area Air Quality Management District (an oversight agency) in 2024.
Critics also point to inspectors reporting that Valero management had known about the leaks for years, but failed to report them or take steps to mitigate the leak. The fine reportedly was the largest penalty ever assessed by the district.
Valero was one of four other refineries that in 2023 didn’t meet requirements as defined by BAAQMD and Rule 12-15. That rule — passed in 2016 — requires refineries to monitor and report fugitive gasses from their operating equipment, such as valves, compressors, and storage tanks. These emissions impact the health of the surrounding communities — the toxic gases released include noxious chemicals like the cancer-causing benzene.
True enough. Perhaps the state could provide a low-interest loan for an overhaul/upgrade. Or provide incentives for the construction of a new plant elsewhere. California has lots of oil reserves (do a search for the Monterey shale formation) but politically I don’t see any of these things happening until the pain gets worse.
California lawmakers this weekend passed Senate Bill 237, a sweeping measure designed to revive in-state crude production in response to declining refining capacity, rising import dependence, and widespread concern about gasoline prices. The new law allows up to 2,000 new oil well drilling permits per year in Kern County beginning January 2026, with the explicit objective of pushing California oil producers to supply close to 25% of the crude used by the state’s refineries…
SB 237 reflects shifting political priorities in Sacramento. With Governor Gavin Newsom widely anticipated to run for president in 2028, gas prices at the pump have become especially politically sensitive. Lawmakers are under pressure from constituents, particularly as refining capacity drops and fuel supplies tighten.
Kern County produce heavy crude similar to tar. Lots of people in CA want the light crude from Middle East which does not violate state pollution standards.