California Losing Important Valero Oil Refinery, Exclusive Supplier of Travis AFB
Valero to shut Benicia refinery, which generates about 12% of the fuel in California . The reason: A toxic regulatory environment and high costs.
It turns out the biggest casualty in California’s War on Fossil Fuels may be our national security.
Legal Insurrection readers may recall that last year, 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.
Now Valero Energy Corporation has announced plans to close its Benicia oil refinery, located just northeast of San Francisco, by the end of April 2026.
This facility, which processes between 145,000 and 170,000 barrels of crude oil per day, has been a significant economic engine for the city of Benicia and a major supplier of gasoline, diesel, jet fuel, and asphalt for the California market.
The challenging regulatory environment in the state that is hostile to fossil fuels was cited as a reason.
Valero CEO Lane Riggs cited challenging regulatory and enforcement environment for the decision to cease operations.
Benicia’s closure is the latest in a series of planned refinery shutdowns in the state. In October, Phillips 66 (PSX.N), opens new tab said it would shutter its Los Angeles-area refinery by the end of this year. Phillips 66 last year converted its Rodeo refinery into a renewables production facility.
Gasoline prices in California are among the highest in the country due to the state’s reliance on imports to offset declining supplies.
Keep in mind, California’s total oil consumption averages approximately 1.4 million barrels per day. This means the Benicia refinery processes about 12% of the oil California uses, so the shut-down will have significant impact on the state and the region.
However, Arizona and Nevada are likely to feel the impact of the closure as well.
Because California is an “energy island,” meeting demand for California and the parts of Nevada and Arizona that rely on its refineries will require costly imports of volatile fuel by emissions-heavy tanker ships.
California Gov. Gavin Newsom has long blamed rising gas prices on refiners’ “price gouging,” but even though his own administration has said that it has no found no evidence of such, he called a special legislative session last year to pass new refinery regulations that both Democratic and Republican governors of neighboring states warned would lead to price hikes and supply shortages.
Now, with the closure announcement, the warnings from the energy industry and regional leaders are coming to fruition.
…With the state’s ban on the sale of new gas-powered cars in 2035, new refineries are not being built, leaving remaining refineries operating at nearly 100% capacity at all times. As a result, outages at even a single refinery result in spikes in gas prices.
As a reminder, the new regulations would require energy companies to stockpile gasoline. Furthermore, our state legislature was keen on allowing wildfire victims to sue energy companies due to ‘climate crisis’ claims.
But it turns out there is a serious national security consideration in this closure. The Valero refinery is the exclusive supplier of jet fuel to nearby Travis Air Force Base, which it delivers through a direct pipeline.
“If that is stopped, what does that mean to the base?” Young said. “Travis uses an amazing amount of fuel to fly all their planes, much more than can be easily replaced, and certainly not replaced within a year. So I think that this becomes a matter of real concern to the Defense Department and it’s potentially a national security issue.”
Valero dropped its bombshell April 16 announcement roughly six months after regional and state air regulators fined the company a record $82 million for secretly exceeding toxic emissions standards for at least 15 years. And last month, city leaders voted unanimously to impose moderate new safety regulations on the facility.
The fact that it is a national security issue may give the Trump administration the excuse it needs to kill the state’s inane environmental programs, replacing them with more reasonable and achievable federal ones.
Finally, Valero contributed about 20% of Benicia’s tax base. That city will now have to find a way to tighten the belt, as it is very unlikely a new business will swoop in and replace the monies Valero paid.
The pain has not really begun, as we haven’t fully entered the FO phase of the FAFO cycle. Hopefully, there will be a solution to the situation quickly, as I suspect California’s plans to run its own refineries will end in complete failure.
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Comments
Newsome. Nothing more needs to be said. His name is now a curse word.
newsom; verb: To totally screw something up; see FUBAR
Yeah. I was thinking of the F in FUBAR as in: Before he knew it he was Newsomed!
or Newsome around and find out = NAFO. That would lead to something like: She NAFO’d
or she Newsomed around and found out.
There would also be the ever popular NOAD: Newsome off and die. And then we come to
your favorite and mineL NUBAR = Newsomed Up Beyond all Recognition.
I’m stealing that! Wish I could up vote that to 100!
In order to prop up the economy, Newsom could always move the state capital back to Benicia.
Benicia is a $hit hole. I always found it funny that a major pre packaged meal company once set up shop in the post apocalyptic industrial wasteland of Benicia. I heard they went out of business. I guess the employees in town weren’t exactly reliable workers…..🤔
It isn’t just Newsome. It’s the whole Democrat party in California. But yea, Newsome is a big part of it. He certainly doesn’t veto any of the craziness.
Enjoy $10 gas californians. This what you voted for.
When Germany invaded the Soviet Union in 1941, nearly all of the USSR’s manufacturing capability, necessary for the conduct of the war, was in the path of the Wehrmacht. The Russians disassembled thousands of factories and moved them east of the Ural mountains, putting them out of range of even the Luftwaffe.
It would be a relatively simple operation, in comparison to the scope of the USSR’s reaction to the invasion, to dismantle the refineries in CA and move them to friendlier neighboring states.
Soviets also dissembled any intact factories in Germany and moved them east.
Yes, the Russians moved factories, but they were able to do it one machine at a time, with the machine operator travelling with ‘his’ machine. Refineries have a large number of huge custom built vessels, and everything has to be plumbed up together, wired up together, with an infrastructure of power, compressed air, steam, etc.
California gasoline will be coming from some refinery in east Asia.
The entire West Coast except Alaska has become a libtard paradise. Even if you could offload Alaskan crude from the tankers ( this is where North Slope Oil is delivered for refining) you would have to build a pipeline for the crude across Washingtom State to Idaho or across Caligulafornia to Arizona. Not easy permitting and your ships still have to dock in the Soviet socialist west coast Utopias.
Travis can be supplied via tanker trucks. Electric tanker trucks.
I don’t know much about Travis other than it’s a GIGANTIC base, home to the AMC with a dozen or more resident units. A Marine Corps air base, which is generally only a fraction of the size (in terms of aircraft), will easily use well over 1-million gallons of Jet A each year, to say nothing of the fuel for the maintenance and other supply missions. Travis likely uses fuel measured in the tens of millions each year. That’s a lot tanker trucks.
AMC is based out of Scott AFB
Travis is the home of the 60th Air Mobility Wing. But you are correct. Travis is the gateway to the Pacific (and the largest military aerial port in the US).
My mistake. I’ve always presumed that’s where AMC was because just about every C5 I’ve seen either originated or was eventually headed to Travis.
That’s an easy consideration. As a C5 loadmaster, I went through Travis quite frequently as we did what we referred to as “West” trips.
But you are not mistaken that any interruption of Travis’ ability to obtain fuel would be the equivalent of shutting g down LaGuardia, Atlanta, LAX, DFW, or any major flight hub in the nation.
Pipeline, Feds take the land via eminent domain. Watch progressives head explode.
California won’t build a pipeline to Texas. So, they must import gasoline via train. Unfortunately, the existing tracks are at capacity. And, the high grades over the Rockies dramatically limit the number of cars per train.
They will be forced to import refined product by ship. But, to do that they will need a permanent exemption to the Jones Act.
California law enforcement will stand around and watch train thieves steal the fuel from tanker cars.
Close it down. Now that Ford Ord is turned into condos there really isn’t a reason for an air mobility command in California. They should turn the old Sac Base in Moses Lake WA into the air mobility base for the West Coast in case a Cascadia earthquake turns joint base Lewis McChord into rubble.
I would be surprised if there isn’t robust existing authority the president can use to exempt critical infrastructure from state regulatory actions (particularly for national defense). If that exist, Trump should use it tomorrow and extend whatever tax/regulatory incentives he can to incent Valero to keep the refinery open. The cost to relocate Travis would be…exorbitant, and probably not even possible no matter what the cost because of geography. Travis is a gateway location between CONUS and the Pacific and Southeast Asian theaters.
That begs the question. Does Trump want to help Newsome at all?
I’m sure he doesn’t. But, some things are more important…like military readiness. Closing Travis would be a gift to the Chicoms at a moment when they’re looking at Taiwan like a dog looks at a ham bone.
Do the Dems want Trump to be the hero in this story?
Who says he has to let California have any of the fuel. Exempt them to keep making for the military contracts only.
I don’t look at it as “helping” Newsome. I think it just highlights Newsome’s idiocy and incompetence. And let’s not forget his imaginary energy grift.
Meh, use defense production act. Keep it open waiving the State regs using that authority. Keep the flow to Travis and the DoD buys the rest of the production and ships it to regional bases and to supply installations in the Pacific.
Hope this pressures Maricopa County to release their requirement for the boutique gas mixture that saddles them with the highest pump prices in Arizona
Maricopa County….the libtard Capitol of AZ. Always wondered why Tuscon gas prices were so much lower than Phoenix. I hear South of Phoenix the fuel is supplied by Texas refineries. Phoenix gets Newsomegas.
When you make it impossible to do business, don’t be surprised when businesses leave
Just when you think you’ve seen it all …
.
All refineries need to leave California and then then need to tell California they will no longer make their special blends. Good luck walking to work on the interstate.
“California is an energy island” – State regulations for their special blend for gasoline is the cause here. Entirely self inflicted. No refinery anywhere in the country, outside of CA, can supply them.
BlendS. Plural. Many of them.
The obvious solution is to move the EV mandate up a bunch of years. /s
Can we build a wall around CA first so that the millions of idiots that stayed to long in the Soviet Socialist Republic of Commiefornia can’t leave and ruin adjoining states. Think of Escape from New York on a far grander scale.
How nice. Guess the federal government might want to reconsider the whole idea of “single-source contracting” when it comes to supplying our military bases. But I doubt they will.
They should use eminent domain, make it federal land, exempt it from CA regulations, claim national security and let Valero keep operating.
Strange they’d name an oil company after a piece by Maurice Ravel.
Valero/Bolero.
.
Bo Derek!
Ok, calm down Rorschach.
(I know those are ink blots not word association but Jung just isn’t as funny.)
President Trump needs to declare the refineries in California part of the National Defense Act via Executive Order. At the same time have Lee Zeldin rescind California’s special EPA waver. It’s past time that the Federal Government stop giving California special treatment.
I live in CA and I approve this message.
Move the Jet A in via rail car and let the People’s Republick of Kalifornia run their police state the way the voter’s want.
Then they are even more of a poster child for the red fly over states on what voting Democrat will do to your state.
Berkshire Hathaway’s BNSF will be happy to negotiate a deal.
This is what the vile, stupid and evil Dhimmi-crat apparatachiks do, exceedingly well — destroy, pilfer and impoverish. And, threaten national security.
Is there a problem here? This will help Calis transition to battery operated vehicles that they crave by increasing the cost of gasoline. Travis will get fuel from out of state or Sacramento could supply battery operated airplanes.
If you were an anti-American progressive, closing Travis as a result of closing the refinery would be seen as a plus.
Who is John Galt?
Hard to believe California is part of America. Was it taken over by Venezuela in the middle of the night??? Incompetence on this scale is amazing. And yet they think their handsome, photogenic governor would make an excellent national president. Just how bad is the drug problem in California? Is anyone sober???
Handsome? I don’t think so!
Some comments shadow banned? What’s that about?
I wish I could embed images on this comment. I’ve got a whole bunch of stuff I copied from the Wall Street Journal (before it went woke) from back in the 2005-2006 time frame when Chavez was busy “nationalizing” Veneuela’s oil and gas industries, among others. Watching the subsequent disintegration of PdVSA would have been amusing if it weren’t so tragically predictable.
As the inevitable occurred, and oil and gas production in what had been one of the most productive sets of fields in the world, they naturally blamed the oil-field workers as “wreckers and hoarders”. Venezuela lost the vast majority of the high-tech secondary- and tertiary-recovery workers to other countries. Canada was then really starting their oil-sands projects and significant numbers of the experienced workers ended up in a much colder but slightly less socialist country. Venezuela is still operating at only a small fraction of the production they once had.
It will be interesting to see how fast it takes KKKalifornia to go down the same drain under their bizarre version of collectivism.
ted kennedy and others especially on the east coast had deals with chavez to sell them fuels
Joe Kennedy II or the III. Teddie’s little nephew otherwise known as the wizard of uh had the deal. He was former MA congressman and founder of oil company in MA.
anything to destroy maga
f the left
The federal government should buy and operate the refinery.
The federal government does not have to comply with local rules, correct?
The federal government is not in the oil refinery business. It’s not like there’s a You Tube tutorial.
I live in this hell hole of a state. What is CA gonna do about this problem?
Absolutely nothing … because Sacramento doesn’t give a shit enough to do anything. It’ll be just fine with Sacramento when these refineries close … less headache, allowing prices to spike and drive people out of their cars and toward electrics or public transportation and a feather in the cap of the radical environmentalists.