The oil industry is having an I-told-you-so moment in California.
For decades, the state has raced to end its reliance on fossil fuels and prioritize clean energy. Its relationship with oil companies became particularly contentious in the past two years, as Gov. Gavin Newsom and Democratic legislators held two special sessions to crack down on alleged price gouging at the pump.
But now two of its last remaining fuel refineries are closing sooner than California expected, tossing a simmering emergency into officials’ laps. With a hotly debated forecast that $8-per-gallon gasoline might be on the horizon, there has been a remarkable shift at the state Capitol. Led by Newsom, who just last fall was lambasting oil companies for “screwing” consumers, California may soon let its black gold flow again.
Refinery closures are accelerating the pressure in Sacramento. Two days after Newsom signed a law increasing state oversight of maintenance, Phillips 66 announced in October that it would shut its Los Angeles facility by the end of 2025 because of concerns over the sustainability of the California market. Then in April, Valero declared it would close its Benicia refinery next year, citing a challenging regulatory environment.
That would leave only six major facilities to refine crude oil into transportation fuels in a state that remains the country’s second-largest gasoline consumer after Texas, as well as a major user of jet fuel, according to the U.S. Energy Information Administration. A business professor at the University of Southern California projected the loss of refining capacity, which will be offset with more expensive imports of finished fuel, combined with additional state actions, could send gasoline prices spiraling past $8 per gallon by the end of 2026.
sacobserver.com
For decades, the state has raced to end its reliance on fossil fuels and prioritize clean energy. Its relationship with oil companies became particularly contentious in the past two years, as Gov. Gavin Newsom and Democratic legislators held two special sessions to crack down on alleged price gouging at the pump.
But now two of its last remaining fuel refineries are closing sooner than California expected, tossing a simmering emergency into officials’ laps. With a hotly debated forecast that $8-per-gallon gasoline might be on the horizon, there has been a remarkable shift at the state Capitol. Led by Newsom, who just last fall was lambasting oil companies for “screwing” consumers, California may soon let its black gold flow again.
Refinery closures are accelerating the pressure in Sacramento. Two days after Newsom signed a law increasing state oversight of maintenance, Phillips 66 announced in October that it would shut its Los Angeles facility by the end of 2025 because of concerns over the sustainability of the California market. Then in April, Valero declared it would close its Benicia refinery next year, citing a challenging regulatory environment.
That would leave only six major facilities to refine crude oil into transportation fuels in a state that remains the country’s second-largest gasoline consumer after Texas, as well as a major user of jet fuel, according to the U.S. Energy Information Administration. A business professor at the University of Southern California projected the loss of refining capacity, which will be offset with more expensive imports of finished fuel, combined with additional state actions, could send gasoline prices spiraling past $8 per gallon by the end of 2026.
Refinery closures prompt California's energy policy shift - The Sacramento Observer
California's oil industry gains influence as refinery closures and potential price hikes force lawmakers to reconsider their stance on oil production.
sacobserver.com
