The skies over northern California have been filled with toxic smoke of one description or another this past year, from lithium-ion storage facilities to now an oil refinery fire that has just erupted this morning.
I read a Xweet earlier that said the area was ‘snakebit,’ and you could certainly look at it that way. Nothing but bad news, with most of it self-induced and all of it energy-related in some manner.
Energy company Valero has been signaling for over six months that it was seriously considering shuttering two of its California refineries. The first word of their intentions came last October, and only a week after Phillips 66 announced they were going to close down their 100-year-old refinery outside of Los Angeles. All of these rather drastic moves were blamed on Gov. Gavin Newsom and the CA legislature’s hostile climate for any fossil fuel-related business operating in the state.
It was simply becoming untenable.
Little more was heard from Valero until a few weeks ago, and only then because they made it official – their company was closing the San Francisco area Benicia refinery in 2026.
Valero Energy (VLO.N), opens new tab on Thursday said it would cease operations at its 170,000-barrel-per-day San Francisco-area oil refinery next year amid worries about California’s declining fuel supplies and high gasoline prices.The decision clarifies plans for the Benicia refinery after the San Antonio, Texas-based refiner last week announced its intent to “idle, restructure, or cease operations” there by the end of April 2026. Valero also said it had recorded a $1.1 billion pre-tax impairment related to its California refineries.Valero CEO Lane Riggs cited challenging regulatory and enforcement environment for the decision to cease operations.
There are some major problems with the planned Benicia shutdown, and not just the fact that it provides over 9% of the gasoline for the state and 20% of the taxes that keep the town alive.
Over 20% of CA’s refining capacity is disappearing as Valero and others shut down—because of Newsom’s crushing regulations and political ambition. Californians will pay for it at the pump. Higher gas, lost jobs and revenue, and supply chain disruptions. https://t.co/YZqRtsKGOe
— Vince Fong (@vfong) April 16, 2025
It’s also the major fuel supplier for Travis Air Force Base, delivered via direct pipeline from the refinery to the base fuel pits. The busy military hub uses a tremendous amount of jet fuel that is not easily replaceable by CA’s rapidly dwindling sources, and that would have to be brought in by a fuel truck.
…“We need to get moving on this quickly because 12 months is not a long time given the severity of the economic impact,” said Young, noting that nearly 20% of Benicia’s $60 million budget comes from the refinery. “I think that’s part of my frustration, is how little time we have to try to plan for some kind of an alternative.”
Shutting down the facility, he added, would also be a major blow to the hundreds of residents who work there, not to mention the scores of restaurants, hotels and other businesses that provide services to those workers in this city of some 27,000 residents.
The Valero refinery is also 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.
Now you’re into a significant national security issue and one that could trigger a Trump intervention on those grounds, for the state’s regulations themselves imperiling our nation’s ability to respond to a national emergency or wartime scenario.
Newsom, of course, went into CYA mode as if this was the first he’d heard of any of it, even though the state was already hypocritically having to bolster its refined products with imports from such carbon-neutral shipping origins as Singapore.
California is literally dependent on fuel shipments from Asia to survive, which were already in the works thanks to the Phillips closure.
…According to energy shipping specialists Poten & Partners, the refinery shutdown will increase the amount of fuel that California imports from East Asian refiners. Domestic tanker capacity is nearly at full utilization, and there is no orderbook for additional U.S.-built tankers at present, so Poten believes that additional shipments from the Gulf Coast to California are unlikely. Instead, the consultancy suggests, the replacement fuel will likely come from the place with the greatest capacity to produce it at a favorable cost – East Asia.
Not to mention, neighboring states that depend on the output of CA refineries for their own states’ fuel needs had already sent ‘What in the Sam Hell you guys THINKING?!’ letters to Newsom about the lunacy imperiling their own citizens.
We have pipelines but those pipelines transit out of state to Nevada and Arizona from facilities in California. With the supply about to be diminished Nevada and Arizona are also headed into uncharted territory.
Hence the reason the Governor’s of NV and AZ sent this letter to… pic.twitter.com/UCH2ianLhK
— 🇺🇸 (@BosunPipe) October 25, 2024
…warning him that his plan was ridiculous.
Gavin doesn’t care about them, or us.
He only cares about his bank account.
Newsom is smoothly assuring everyone he’s trying to quell the ‘anxiety’ over the possible fuel shortages, even as he does nothing to retract any of the regulations causing the exodus in the first place. As my friend Leslie Eastman noted…
…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.
The progressives couldn’t help themselves piling on and are still, even in the face of oil companies exiting the state completely, unwilling to even take one foot off the neck of their sworn enemies and cash cows.
…In September 2023, Newsom’s administration filed a lawsuit targeting the oil industry for “lying to consumers for more than 50 years” about climate change. He signed into law a bill seeking to hold Chevron and other refiners liable for allegedly price-gouging consumers. California bill SB X1-2 authorizes the state energy commission to determine an acceptable profit margin for in-state refiners and penalize those that exceed it. More recently, bill AB X2-1 has mandated increased reporting requirements by the state’s refiners.
Oh, well done, Gov Randall Flagg-lite and your toadies.
As for the year the state thought it had to find alternative fuel sources and soothe anxious feathers, something happened this morning that may have taken Newsom’s grace period away.
The Valero Benicia refinery caught fire this morning.
Valero refinery in Benicia on fire. The refinery was just announced that it will be closing next year pic.twitter.com/H1qDIZkwiC
— Bay Area Super fans (@Baysuperfans) May 5, 2025
The smoke has been thick enough that Contra Costa County Health has issued a shelter-in-place order for schools in the area and if residents see or smell smokes while fire crews battle the blaze.
Contra Costa Health is aware of an incident at the Valero Benicia Refinery and is sending a HazMat team to Martinez to monitor for any potential impacts within our county. We will continue to keep residents informed as more information becomes available. pic.twitter.com/yDe0G5oiuK
— Contra Costa Health (@CoCoHealth) May 5, 2025
Now the concern turns to whether Valero repairs any of the damage to keep the refinery operational until next year. Or if, depending on how extensive the damage is assessed to be once the flames are out, they throw in the towel, like, NOW.
The “uh oh” moment is in 2025, not 2026. Yikes!
— Jared Wiegand (@jared_wiegand) May 5, 2025
They’ve already taken a billion-dollar write-down on this facility this year – what are the odds they write the whole thing off?
What does Newsom do then?
What is anyone going to do when this goes away and, God forbid, there’s another ‘oops‘ at one of the few remaining refineries or they simply have to shut down for maintenance or seasonal fuel formulation?
What then, geniuses?
What then.
