I have another article to add to the collection on California’s War on Fossil Fuels.
Legal Insurrection readers may recall that Governor Gavin Newsom signed into law a measure ordering energy producers to stockpile gasoline, despite pushback from industry.
Soon after, Phillips 66 announced plans to stop operations at its Los Angeles-area refinery in the fourth quarter of 2025. Meanwhile, energy giant Chevron moved its headquarters to Texas, citing high taxes and burdensome regulations.
A more recent salvo from our politicos targeting oil companies was the introduction of a new CA Senate bill allowing victims of wildfires and insurance companies to sue oil companies for damages caused by storms, wildfires, and other disasters (often exacerbated by the lack of infrastructure, preventative maintenance, and adequate response resources… otherwise known as “climate change”).
As SB 222 winds its way through our legislature, California policymakers are exploring the possibility of state ownership of one or more oil refineries.
California policymakers are considering state ownership of one or more oil refineries, one item on a list of options presented by the California Energy Commission to ensure steady gas supplies as oil companies pull back from the refinery business in the state.“The state recognizes that they’re on a pathway to more refinery closures,” said Skip York, chief energy strategist at energy consultant Turner Mason & Co. The risk to consumers and the state’s economy, he said, is gasoline supply disappearing faster than consumer demand, resulting in fuel shortages, higher prices and severe logistical challenges.
I will point out that the Los Angeles Times article references Russia, Iran, China, and Venezuela in the opening of its article on the subject. If California wants to do Premium Communism, versus the unleaded variety its citizens are currently subjected to, this would be the way to do it.
California appears to be entering the “FO” phase of the FAFO cycle. By mandating electric vehicles (EVs), gasoline consumption has declined. Free market forces are now acting to reduce losses, and there is a potential for even more refinery closures.
Gasoline consumption in California has dropped 15% since peaking in 2005, according to the Union of Concerned Scientists. Electric vehicles now represent about 25% of new car sales, with the state mandating all new passenger vehicles be zero-emission by 2035.Major refiners are responding to these shifts. Chevron (NYSE: CVX), which announced its headquarters move to Texas last year, confirmed it has considered ending production at its California refineries. Two facilities have already switched from gasoline to biodiesel production.“Recent California policies, like banning the sale of new internal combustion engine vehicles by 2035, the potential tax/penalty on refinery profits and the potential new minimum storage requirement are all headwinds to our business and erode our confidence going forward,” said Andy Walz, Chevron’s president of downstream, midstream and chemicals.“We’re moving toward price controls and government takeover of industries. That’s never worked very well in the history of the world,” said Assembly Republican Leader James Gallagher.
There is a great deal of skepticism about plans for California state ownership. If you consider California’s response to wildfires and its complete ineptitude in constructing the “bullet train”, the very reasonable concerns about California’s historical inefficiencies in its government-run programs (especially over the last 20 years) and the potential for increased costs and logistical challenges should put a pause on this mad-cap scheme.
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