Refinery Shutdowns, EV Dreams, and $8 Gas: The Price of California’s Climate Delusion
Chevron has warned that California could face an economic collapse under Governor Gavin Newsom’s policies, according to a doomsday letter sent by the company.
California’s climate-cult-driven political leaders assumed gasoline demand would fade quickly as electric vehicles took hold. Acting on that prediction, they created conditions that forced refineries to close, blocked new projects, and added regulations expecting everyone would share their disdain for fossil fuels and reliable internal combustion engines.
But reality didn’t match their models. Tens of millions of drivers still rely on gasoline every day, and by shrinking supply faster than demand declined, our eco-activist bureaucrats created a fragile, high‑risk system.
Californians are being warned to brace themselves for the FO phase of the FAFO cycle.
Gavin Newsom’s green agenda and global oil turmoil will risk sending California’s gas prices above a wallet-crushing $8 a gallon — potentially returning drivers to the desperate fuel rationing not seen since the 1970s, state lawmakers and industry experts warned.
With drivers in the Golden State already facing the highest gas prices in the US, Southern California state Sen. Suzette Valladares has urged the governor to scrap California’s cap-and-invest program that charges oil makers for carbon emissions. She dubbed Newsom’s program the “cap-and-tax” scheme, and warned that closing any further oil refineries in the state could trigger economic collapse.
“It’s not scaremongering at all,” Valladares told The California Post of a report from the USC Marshall School of Business that found gas prices could reach $8 a gallon by the end of 2026.
$8 dollar gas on the California horizon thanks to another gas refinery leaving the state. Thanks @GavinNewsom! https://t.co/VvmMa6t3Dw pic.twitter.com/KoZj4sy6t5
— Amy Reichert (@amyforsandiego) March 6, 2026
Legal Insurrection readers may recall that back in the summer of 2024, Chevron, which had been headquartered in California for over 140 years, moved its offices to Texas.
The company has just issued a warning letter to Gov. Gavin Newsom that the state is poised for economic collapse if it doesn’t reverse its economy-crushing policies.
The oil giant’s bleak outlook in the letter to Newsom and the California Air Resources Board (CARB) came amid calls to block proposed amendments to the Cap-and-Invest program, which places a strict limit on greenhouse emissions that decreases each year.
Chevron argues that the carbon-cutting program will “cripple the survivability” of the state’s remaining refineries, with devastating effects on the Golden State and its residents.
“The proposed regulation will cripple the survivability of the state’s remaining refineries, which will result in California losing the entire industry to this misguided program,” read the letter from Chevron President Andy Walz, obtained by the California Globe.
“This regulation will increase transportation and aviation fuel prices for consumers. It will risk significant job losses, including many high-paying union jobs, while reducing funding for essential public services. It will upend California’s fuels market and threaten critical energy and national security assets,” the letter from Chevron continued.
Let’s look at some numbers for a moment to further demonstrate how senseless adhering to cap-and-trade is in light of all we know about carbon dioxide and real climate impacts.
The following is the fossil fuel industry’s real economic contribution to California:
- 536,770 jobs in California are supported by the oil and gas industry. That’s enough people to fill both NFL stadiums in California almost 4 times.
- $338 billion was the industry’s total economic contribution to California’s economy in 2022.
- $64.3 billion was contributed in local, state, and federal tax revenue to support schools, roads, public safety and other vital services.
By comparison, the Cap-and-Trade program took in $5.1 billion in 2024.
I guess by “NetZero”, what the “experts” really meant was revenue. But I digress.
Meanwhile, the market for electric vehicles continues to collapse. James Varney of RealClearInvestigations has a detailed review of the current situation, and it is dire for that market (hat-tip, Ace of Spades HQ).
When it comes to electric vehicles, the U.S. consumer has spoken, as Ford CEO Jim Farley said earlier this month. Tesla is one of the few profitable manufacturers, and even its numbers are falling. But while people may not be opening their private wallets for EVs, the public purse for them is bulging. An RCI analysis has identified tens of billions of dollars in federal, state, and local subsidies to support EVs in recent years. Now, in light of market headwinds that show tepid consumer interest in the product and looming competition from China, the likelihood that the taxpayer loans will be repaid is diminishing. Experts say this may result in multiple, costly debacles of public “investments” in green energy projects like the Solyndra loan debacle during the Obama administration, which drew headlines at $500 million.
“This has been a colossal mistake,” said Thomas Pyle, president of the Institute for Energy Research. “This has been one of the worst examples of the government trying to impose its will on carmakers and the public.”
Katy Grimes of The California Globe notes that the target for any fix of this situation needs to be the California Air Resources Board (CARB), which is in charge of Cap-and-Trade as well as emissions policies.
As the Globe has reported for years, CARB operates like no other state agency. The rogue agency conducts its business in private, without the scrutiny of the public it is accountable to. Despite legislative and public outrage over the shroud of secrecy at CARB, then-Assembly Speaker John Perez was said to have crafted the language for SB 1018, which specifically exempted CARB from open meeting rules in cap-and-trade auctions, allowing CARB’s WCI Inc. to manage carbon trading auctions without any public scrutiny.
If you’re not a Californian, don’t laugh this off with the “they voted for it” attitude.
California’s self-inflicted energy crisis is more than just a local policy failure. It’s a national concern with serious economic and security consequences.
By shuttering refineries, throttling oil production, and empowering an unaccountable California Air Resources Board to dictate broad energy policy that bleeds into other states, our climate-cult leaders have undermined both our energy independence and national resilience.
The loss of domestic refining capacity doesn’t just drive prices skyward, as it also leaves California and the rest of the country vulnerable to foreign energy shocks and supply manipulation. Albeit, in the case of the Golden State, its vulnerability is all self-created.
It’s time for federal leadership to step in. The Trump administration must make reining in CARB a national priority before California’s ideological experiment drags the rest of the country down with it. America cannot afford to let eco-extremism jeopardize the very fuel infrastructure that keeps our economy, our industries, and our defenses running.
Also, enhancing protections to prevent vote fraud would probably help in changing who gets to make policy for Californians in the future.
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Comments
We have two cars, one a 2007, the other a 2012, that cost *much* less to maintain than we would spend to buy new cars. Dependability is good, gas mileage and power are acceptable, and they’re comfortable. Oh, yes, they’re both internal combustion engine driven.
Being on the bleeding edge of technology isn’t always great. Sorry for you, California. You’re lagging behind the much maligned and ridiculed Old South.
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Lets allow California to stew in the mess they have created.
Me too. 2007 and 2014 here.
Climate Delusion is not the only ailment California is suffering from.
The Sanctuary Delusion that believes illegals are a good fit for replacing California citizens who fled the state is right up there at the top of the list.
I live in Nevada. We’re affected by this too. Thanks, California!
Nah gas price drops $2 just driving across state line from CA into Carson City.
And from where does Nevada & western parts of Arizona get their oil products from?
California.
The prices are going to go up.
You should consider moving, Nevada is not viable long term.
Do they seriously have $8 gasoline!?
$8 is the projection once the refinery closures finalize. CA already had zero ‘slack’ in refining capacity to accommodate temporary scheduled shut downs for maintenance and interruptions swapping from winter to summer blends.
AAA website had CA at $5.15 for the cheapest regular. In contrast in Hawaii the most expensive premium fuel was $4.93. Here in Alabama I paid just under $3 yesterday.
I’m perfectly willing to ‘care’ about the CA energy crisis …but I don’t believe the residents of CA would like the solutions (basically the opposite of the last four decades but they know that already b/c they refused them) and if they don’t want solutions then they can kick rocks. Same for the looming electricity shortage/price hikes in the mid Atlantic and Northeast due to their foolish net zero nonsense.
It’s about time we prevent Californians from leaving CA, especially the wealthy who enabled the democratic party all these years. We should force those that left in the last 5 years back. Why should the rest of the country suffer from their stupidity.
Yes, the voters voted for this. The voters can undo this by voting these putzes out of office, but they are not doing that.
The root problem here is that the very politicians who created all these crises will claim to be able to fix them without any alterations in policy.
And the voters of California will believe them.
This madness will continue until reality wakes voters up and they force a change direction, or California experiences complete and utter collapse.
Recent history favors the latter outcome.
I vote all gas stations in CA close for a week as a sign of things to come.
Now they get to deal with getting what they voted for. I know, not all of them, but enough.
Hard to feel sorry for the Kalifornians who voted for the BS they are living every day, and they will vote for him if he runs in 2028.
The situation is considerably worse than described. This problem was easy to see from afar and long ago.
When I first moved to CA decades ago, there was all this noise about adding MTBE to the fuel supply — nominally to clean the air. But was it? MTBE was put in the fuel supply to change the combustion of carburetted cars and trucks. But it was lower in energy density, toxic and higher in cost than the fuel it replaced. The toxicity forced it out, but the idea remained: expensive additives to “fix” carburetors.
Today there are essentially no carburetted cars, but there is still a corrosive, low-energy-density, expensive blending agent. This chemistry is accompanied by an army of BATFE agents to make sure nobody diverts it to illegal liquor. It is produced far away and shipped in by train.
So, as a nation we are paying farmers not to make food, then paying guards to ship the product across the country to dilute fuel while increasing the price of fuel, all to address problems with cars that no longer exist. But we are borrowing money to do all this!
Meanwhile, the state of CA uses the pretext of carburetor problems to continue to harass the fuel production system… now to the point where the constantly harassed just do not want to play the game.
There are strong parallels to the school lunch program. Instituted during WWII to make sure draftees were not underweight, it continues today. We borrow money to fund an army of regulators and kitchens to address a problem that ceased to exist in 1945. Do we really need to be fattening up kids today? Perhaps not.
As for Ca…. this will push businesses elsewhere. If a business has to keep up with the cost of living- it’s cheaper to move and hire people in red states. That will be the net effect of all of this. Productive people will leave for a better life. For now that better life is in Or/Wa. But they are also on economic and social suicide missions of their own similar design.
I had considered converting a car to also run on propane when gas went nuts last time. Although not efficient as gas- It is a good way to avoid all the road taxes. It is a bit more cumbersome to refill. But if it’s a mix option- 2-3 20 gal tanks filled on the weekends softens consumption of the 8 dollar stuff.
My home fleet is a hodge podge of old and new. Being older- can actually afford whatever- I’m actually mixed on whether I’ll spend money on a 100k Mercedes or go rebuild a 2000 Honda accord with a K-swap.
Seriously- everything on new cars is unnecessary. TPS ? Why? It’s just a tax on poor people. If you are too much of a retard to know your tire is flat, you need some time on the side of freeway to rethink your life. Back up cameras are cheap so I won’t hate on the head units, but the collision avoidance garbage in new cars (especially budget models) is TERRIBLE. I got stuck with a Toyota Corolla on my last rental… it was absolute junk.