California Seeks Buyer for Benicia Refinery as Fuel Supply Warnings Mount
This may be the first small step California is making away from the edge of the Net Zero cliff.
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.
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. It is also the exclusive supplier of jet fuel to nearby Travis Air Force Base.
Now, this sequence of events was entirely foreseeable to anyone with a modicum of common sense. However, these are California Democratic politicians making the rules in Sacramento….and the only sense they have perfected is one of entitlement.
At one point, California policymakers discussed state ownership of these refineries. After reviewing all the potential paths to failure inherent with this plan, I concluded:
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.
Now, California politicos may also be developing a new sense: Regret. They are desperately seeking a buyer for the Benicia refinery.
California government officials are trying to find a buyer for Valero Energy’s (VLO.N) Benicia refinery near San Francisco, three sources familiar with the matter said, an unusual effort as the clock ticks down on the company’s planned closure of the facility in April.
The rare attempt by a state government to broker the sale of privately-owned infrastructure reflects its growing concerns over protecting fuel supplies in the most populous U.S. state and keeping a lid on prices, where California’s nearly 28 million drivers already pay among the highest prices for gasoline in the country.
California’s effort to save the refinery from closing also marks a shift from the focus of government policy in recent years to champion green initiatives and restrict fossil fuel usage, that has led to an often tense relationship between the state and oil companies, including the second-largest U.S. refiner by capacity.
The state’s primary energy and policy planning agency, the California Energy Commission (CEC), has actively sought buyers for the plant, three sources told Reuters, speaking on condition of anonymity to discuss private deliberations.
California is learning that actions have consequences.
"In rare move, California steps in to find buyer for Valero refinery to avoid closure, sources say"
While the state works day in and day out to destroy oil and gas companies, CA will now have to deal with the consequences… pic.twitter.com/neyu6T07l3
— Steve Guest (@SteveGuest) July 24, 2025
This may be the first small step California is taking away from the edge of the Net Zero cliff.
The move signals a notable shift for a state long committed to aggressive climate goals. In recent years, California has prioritized the transition to renewable energy, pushing to shutter traditional refineries — a policy that has often put the state at odds with oil companies.
The planned Benicia closure follows Phillips 66’s decision last year to shut its Los Angeles-area refinery. Together, the two facilities account for roughly 17% of the state’s gasoline supply. Analysts warn that losing both could drive pump prices as high as $6 to $8 per gallon, a UC Davis study said.
According to the report, among the parties contacted by the state is HF Sinclair, which had previously held talks with Valero before negotiations fell apart over an environmental issue. It said the Energy Commission has also reached out to European operators familiar with stringent emissions standards, the report said.
As the rest of the country moves away from adopting California policies, and in light of the fact that the technologies to achieve “Net Zero” are simply not yet available, this is a rare hopeful sign that this destructive policy will run out of steam.
Imagine having to explain $8/gallon gasoline to California voters over the next couple of November elections… when everyone else is paying around $3 (or even less, if Trump’s energy policies are spectacularly successful).
The stakes are particularly high. State modeling suggests that removing Benicia from the refining system could push pump prices toward $8 per gallon, particularly during summer demand peaks. Analysts warn that the closures could also reduce fuel inventories and strain supply chains across the western U.S.
Pair this with cleaned-up Voter Rolls and a successful Voter ID initiative, and the results could be most astonishing.
BREAKING:🚨
California voters dropped from 26.9 million to 25.7 million.Ineligible illegal voters are being removed from California voter rolls.
We are flipping California.
We are cleaning the California voter rolls🇺🇸@EndWokeness @libsoftiktok pic.twitter.com/nVXIIo2wuh
— Shiloh Marx (@Shilohmarx) July 25, 2025
Meanwhile, I hope everyone has a good laugh…once again…at my current home state. While I don’t like it, I understand.
You would have to have a heart of granite encased in titanium not to laugh: https://t.co/gkJoH9Bf89
— Leslie Eastman ☥ (@Mutnodjmet) July 25, 2025
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Comments
It sounds to me like California is a reaping what they’re soon. They’ve made it impossible for people to run energy businesses in their state and now, there’s a shortage of energy supplies that people need for their day-to-day life. I have no pity for this, it was foreseeable and they were stupid
I hope Tata buys it…. and then you’ll be REALLY screwed.
Look what they did to poor jaguar.
Good luck. No private company will walk into that cesspool unless Cali pays them off big time to protect against future losses
A modicum of commen sense in CA – maybe when the Messiah comes, not until then.
BTW EPA has decided to remove the endangerment finding for CO2. God bless President Trump and his Administration.
While the rest of the country is basking in a low-cost energy boom of sorts, thanks to Trump, California will see a Cartesque malaise settle over itself, driven largely by high energy prices and low supply. But, Karen Bass will almost certainly easily win reelection and whoever the DNC gubernatorial nominee is next year, she/he/the will win by 20-points…even if it’s Kamala. California deserves all the misery coming its way.
This is scripted by the state pushing EV mandates. Oh how sad that the price of gasoline, which the greater majority of vehicle drivers use (around 58 percent in California), will force them to move into the EV realms (which fewer can afford). This is another step in the parade of state mandated stuff that attacks personal choice, which is mostly governed by each individuals current state of existence. ICE bad, EV good. There will be no long-term bend in the trend at the behest of the people. There will be short-term appeasements to maintain the political monopoly in order to continue propagating the one-world-order crew ‘s “de-giving.”
I live in California. Charles Manson (D , Dead) wins statewide.
It will take more than $8/gallon gas to wake this place up. I have no suggestions.
Me and my wife are from California born in the late 50s. We left with our sons in 96 due to business moving us to the east coast. Some of our family is still in the state but some have left.
The state government regulations have for a long time been after fossil fuel companies and have driven out the refineries. The last two are closing and I doubt they will be bought by any company as the state has always continued to hurt the companies financially that owned them.
Fuel will still be needed in the state and costs will rise as it will need to be shipped in via ship or by semi. The state politicians are stupid as they still have this mad plan for EVs but the state cannot handle the need for electric power. The state is having brownouts and blackouts when they have too much power drains and this will get worse as more EVs are added.
“California government officials are trying to find a buyer for Valero Energy’s (VLO.N) Benicia refinery near San Francisco”
“How much will you pay us to wear these hobbles and shackles, and to get tased for an hour every week? Bid quickly — this opportunity won’t last!”
There is a very limited number of possible buyers for the Benecia plant. California has a unique and picky set of formulations for gasoline burned in that state. While various petrochemical companies have within them the knowledge of how to run that kind of plant, those same companies have been attacked repeatedly by the state of California. And are already leaving that market because it is too unstable both economically and legally.
I don’t see buyers lining up for that refinery. And the process of creating a new company to run it cannot be done before April, if at all. There have been rumblings about the State of California taking over the refinery. Given the incompetence that they routinely show in every major project, this will be entertaining.
The most important thing is we must prevent them from having the rest of the country bail them out. We have to return their contempt for us.
Subotai Bahadur
Simple solution is to form a consortium to acquire it. Pay current ownership to run it. DoD buys the diesel and aviation fuel. The gasoline stops being refined to CA blend in favor of less costly ‘normal’ blend and gets shipped throughout the rest of the USA. CA can buy the remainder for asphalt or that can be shipped elsewhere. IOW save the jons, keep the expertise running the place, they source DoD needs under long term contract but CA doesn’t get the benefit of fuel. Force CA politicians and voters to live with the destructive consequences of their foolish policies. The current pain levels ain’t high enough to create the shift in mindset needed to make lasting policy changes in CA.
CA could bring it in from another state on that high speed rail…. oh wait. Never mind.
Can it be refined in Mexico and brought across the border?
As far as I can tell, the refineries in Mexico are more towards the central part of the country, and they do not have the necessary pipelines to move gasoline in volume to the California border. And to be honest, you need pipelines to move that kind of volume.
Then there is the matter of the specialized blends. Even if Mexican refineries had the reserve capacity to supply California, it takes specialized equipment that would have to be ordered, delivered, and installed before they had anything to put in the currently non-existent pipelines.
I kind of like CommoChief’s idea of selling aviation fuel and diesel to DoD, but that would require both the consortium, and I suspect a lot of court action.
Subotai Bahadur
No company is going to buy it for the exact reason Phillips and Valero are shutting them down.
They’re sick of dealing with insane regulations in California, constant lawsuits, and being excoriated by the left as villains.
It should be one of the most lucrative markets in the world for a gas company, they should be fighting tooth and nail for the rights to be the ones to supply it, and instead they lose money, have to constantly defend themselves from insane lawsuits and even more insane regulations, and they simply don’t care anymore. They’re abandoning Commiefornia to its chosen fate.
california needs an overhaul that would shake their foundations
I think $25.00 per gallon gasoline will do it.
My thoughts ran towards the geological.
Philips and Valero doing a Galt.
Investment advice: buy bicycle futures.
Enjoy $10 gas CA. Elections have consequences. Should have recalled newscum.