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.
Ariza told the Globe that Valero, which announced in April 2025 that it would be shutting down its Benicia refinery in April 2026, has bumped the closure date up to January. Ariza explains why:
“The Phillips 66 refinery in Wilmington shut down on October 17th is taking 140,000 barrels per day of crude oil refining offline. Originally Valero in Benicia was slated to shut down in April of 2026. However, given the fact that they cancelled their crude oil contracts over six weeks ago it looks like they will be shutting down no later than January of 2026, four months ahead of schedule."
California will have no gasoline problem. When push comes to shove they will simply “temporarily” allow standard formulations of gasoline to be sold in the state. And if refineries that can do their special formulation don’t gear up quickly enough, well, temporary will turn into longer temporary, and so on…
At the center of the warning is the planned shutdown of two major refineries: Valero’s Benicia facility and Phillips 66’s Los Angeles plant. Together, the closures would eliminate nearly 20% of California’s in-state refining capacity, according to Reps. Vince Fong and Stan Ellis, both Republicans from Bakersfield.
The West Coast is relatively isolated from other major refining hubs, such as the Gulf Coast, making it harder to replace lost supply when refineries shut down. While the Los Angeles and Benicia facilities account for less than 2% of total U.S. refining capacity, they represent about 17% of California’s capacity.
The stakes extend beyond consumer prices as California hosts more than 30 military bases that rely on in-state fuel production, including major Air Force and Army installations. Fong said the refineries provide critical fuel for military operations, serving bases in California as well as in nearby states like Nevada and Arizona.
Ellis noted that California currently imports around one-fifth of its refined petroleum products and warned that shutting down refineries could deepen that dependence.
The Newsom administration disputed those claims, saying there is no evidence that California’s energy policies pose a threat to national security or the military’s fuel supply. Officials said they have identified no credible risks to readiness.
You wonder if California’s fuel shortage is made up by imports by pipeline from the Gulf states, from Mexico, or by ships from afar — possibly from Asia.
Germany WILLINGLY ‘attacked’ non-fossil fuels, shut down reliable Nuclear power, and turned cultishly to ‘renewables’. And WILLINGLY going to Gas … from Russia.
Putin curtailed and weaponized that ‘oil n gas’ supply to Germany.
CA is moving aggressively to ‘renewables’. Valero is removing their ‘energy’ supplies from CA, which, according to the ‘news’, is stressing CA economy, and with the linked article perhaps even ‘national security’.
ralph
Just mention children, or race/racisim, or other-isms, or national security, or ‘x’, or other dog whistle, and you can stirrup your target cult.
The previous administration’s ‘sanctions’ were so weak and porous due to the need to reroute ‘energy’ supplies to the EU and other (smaller, developing countries).
Now, those routes are robust and our current guy is making a bunch of ‘us’ angry with his energy machinations.
ralph’s cynicism and skepticism are on display.