A significant shift is looming for California’s energy landscape following Valero Energy Corp.’s announcement that it intends to cease operations at its Benicia refinery near San Francisco by April 2026. This decision jeopardizes the jobs of over 400 employees and raises concerns about the state’s fuel supply and affordability.
“We understand the impact that this may have on our employees, business partners, and community, and will continue to work with them through this period,” stated Lane Riggs, Chair, CEO, and President of Valero, in a recent release.
Republican Congressman Vince Fong has voiced strong criticism, attributing the closure to California’s stringent energy policies. He emphasized that this is not an isolated incident, noting that other refinery closures have already been announced, leading to a projected 20% reduction in California’s refining capacity.
“It’s a warning that California’s fuel supply is in jeopardy,” Fong told Fox News Digital. “That’s the root cause…rigid regulatory environment…putting our fuel supply in jeopardy. And this isn’t just an energy issue. This is an affordability issue. This is a jobs issue. This is a reliability issue.”
While Valero operates another refinery in Los Angeles, the Benicia closure carries substantial weight given California’s role as a major energy provider.
“California’s energy policy is at a breaking point,” Fong asserted. “This is not a market failure…regulations and mandates that are pushing refineries to close.”
A recent study by University of Southern California professor Michael Mische supports this view, highlighting the connection between California’s policies and elevated gasoline prices.
Fong further explained that these regulations have drawn attention from neighboring states like Arizona and Nevada. He predicted a direct impact on California drivers: “When there’s gasoline shortages, what you’re going to see is the price of gasoline go up.”
As of Sunday, Californians were paying an average of $4.83 per gallon – significantly higher than the national average of $3.15, according to AAA.
Newsom’s office declined direct comment, referring inquiries to the California Energy Commission (CEC). The CEC acknowledged Valero’s notification and stated that it will facilitate proactive planning and support during this transition.
“The California Energy Commission (CEC) is committed to its efforts…to continue to have a safe, reliable and affordable supply while transitioning away from fossil fuels,” said CEC Vice Chair Siva Sunda.
Sunda further added, “The CEC will continue to work in partnership with the industry and stakeholders to protect consumers during this transition.”
Adding another layer of complexity, Valero is currently facing $82 million in fines from California regulatory bodies related to environmental compliance.
- Key Impacts:
- Over 400 jobs at risk.
- Potential 20% reduction in California’s refining capacity.
- Increased gasoline prices for California drivers.
- Concerns about the state’s fuel supply reliability.
