California’s Rush to Maintain Oil Refineries

California Democrats appear eager to secure buyers for refineries that are slated to close by 2026, as reported by Reuters.

The California Energy Commission (CEC) is actively seeking buyers to prevent future refinery suspensions. Sources from Valero’s Benicia refinery, who wish to remain anonymous, shared insights on the matter with the news outlet. According to them, there’s a push to keep the refineries operational after the state has enacted stringent regulations that have led to multiple closures over the years.

“The CEC is in discussions with industry stakeholders to explore options for keeping refineries running in the state,” the agency mentioned in its communication with Reuters. This follows a series of challenges that California has faced regarding fuel supply.

While the CEC didn’t explicitly confirm its search for buyers, it emphasized efforts to ensure the refineries remain open. Valero disclosed plans to close its Benicia facility back in April, while Phillips 66 has also indicated its Los Angeles-area refinery will shut down by the end of 2025.

A spokesperson for California Governor Gavin Newsom referred to the governor’s recent remarks about collaborating with oil refiners to stabilize fuel availability and his ongoing push to enhance partnerships with these refiners.

Residents in California already experience some of the highest gas prices in the nation, and with two major refinery closures looming, prices could rise even further. A study from the University of Southern California suggests that gas prices might hit $8 a gallon next year.

California has witnessed refinery closures for years, and no new major refineries have been constructed in decades. Industry experts have pointed to the state’s combination of a “cap and trade” program and strict low-carbon fuel standards as significant factors driving refineries out of California.

Critics, including Republican California Senate minority leader Brian Jones, argue that the stringent regulations imposed by Democratic officials have pressured refineries to exit the state, elevating concerns about a potential gas crisis.

The CEC and Valero have acknowledged requests for comment on the situation.