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.
Last year, Governor “CRAZY STUPID”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.
ztakddot | April 30, 2025 at 9:10 pm
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.
In order to prop up the economy, Newsom could always move the state capital back
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.
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.
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).
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.
Hope this pressures Maricopa County to release their requirement for the boutique gas mixture that saddles them with the highest pump prices in Arizona
When you make it impossible to do business, don’t be surprised when businesses leave
All refineries need to leave California and then then need to tell California they will no 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.
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.
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.