Sable Offshore Corp., Santa Ynez Unit. (Photo: bsee.gov)
California’s Oil and Gas Crisis: Expert Warns of Full Scope of the Potential Danger
Is California on the precipice of social and economic collapse?
By Katy Grimes, March 28, 2026 5:30 am
“An evil man will burn his own nation to the ground to rule over the ashes.” ~ Sun Tzu
Nearly two weeks ago President Donald Trump announced he was invoking the Defense Production Act, and ordered the override of California laws blocking the restart of offshore oil production and the Santa Ynez Pipeline System to restart an oil pipeline project off the Santa Barbara coast, in the name of the “National Defense Resources Preparedness.”
U.S. Secretary of Energy Chris Wright directed Sable Offshore Corp. to restore operations of the Santa Ynez Unit and Santa Ynez Pipeline System to address supply disruption risks caused by California policies that have left the region and U.S. military forces dependent on foreign oil.
While California’s governor and Democrat-dominated Legislature have ignored the oil and gas crisis they have inflicted on California, oil experts have been warning that California’s faux “climate crisis” was leading to gas and oil shortages, dramatically increasing gas prices and energy costs, and a national security crisis.
We’ve been talking to the experts and warning for years, that California’s push to ban gas powered automobiles in favor of electric vehicles and an all-electric energy grid was not only preposterous, it would lead to potential economic collapse.
Chevron CEO Andy Walz was also warning of the impending crisis, as recently as September.
As petroleum expert Mike Ariza told the Globe this week, that was prior to the closure of Phillips 66 and Valero in Benicia. When the Phillips 66 plant closed both myself and my team were concerned that we were at or near our infrastructure limit to off load fuel tankers.
Then on January 31st, when Valero Benicia shut down, and not in April 2026 as media keeps claiming, prices started to climb. In Northern California gasoline and diesel had increased by over 80 cents per gallon in Hamilton City and Chico – Before the war with Iran started. “It was a definite indicator that we had in fact reached that infrastructure limit.”
If you look at the letters that were dispatched by PBF, Chevron, and Marathon to CARB and the governor you can see a clear pattern. First, In the PBF letter they cite the closure of Valero in Benicia.
In early March, the Globe reported on Chevron’s letter to California Governor Gavin Newsom and the California Air Resources Board warning them of deep concerns and strong opposition to the CARB-proposed amendments to the Cap-and-Invest (formerly cap and trade) regulation, that the state’s few remaining refineries can’t survive, and the California economy could be crippled.
In the letter, Chevron President Andy Walz cautions that the price of gasoline will increase by more than a dollar a gallon by 2030 as a result of this regulatory change, as well as 536,770 petroleum industry jobs could be lost in the state if CARB’s proposal is authorized.
That is because “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. 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.”
“With regard to these Cap and Investment amendments the rates for the refineries will increase by hundreds of millions,” Ariza said. “At the same time, foreign fuel imports coming from the polluting refineries and polluting ships DO NOT HAVE TO PAY these assessments.”
“To me, the theme in Andy Walz’s letter from September was simple,” Ariza continued. “The business climate in California is unacceptable. The state needed to make real sustainable durable changes to the way the state works with the refineries.”
Here is Walz’s September 2025 letter:
“It is a very difficult place to do business. And if we don’t think we can get our return we’re going to put our money somewhere else. And I don’t want to do that.
It’s regulation. It’s the cost of doing business. It’s the cost of labor. It’s the cost of building.
Permitting fees and permitting time. It is a lot of things that make it very difficult for a company like Chevron and for a lot of businesses to do business in California. It’s very expensive.”
With the closure of the Phillips Wilmington Refinery and Valero in Benicia “that means we lose another 20% of gasoline that people need to get to work, to get to school, to do the things they need to do. And that means prices are going to go up and it’s going to be less reliable.
I think we are at that crisis mode.
Chevron has been here for 145 years. We would like to stay. We haven’t made any decisions to stay or go yet.
But we need real sustainable durable changes to the way the state works.”
Andy Walz, CEO Chevron Corporation
“So what did the state do in response?” Ariza asked. “They doubled down with insane fees on this Cap and Invest!”
“In our current configuration with only seven operating refineries we are absolutely in danger of uncontrolled PRICE SPIKES and ‘SHORTAGES.'”
“These price spikes and shortages can be caused by multiple reasons as we had previously discussed. Some of these include storms delaying tankers, dock or equipment problems, unscheduled refinery downtimes, or unrest in various locations across the globe.”
“This puts our civilian population and military at significant risk.”
“Now three independent oil corporations have submitted separate letters stating that they will shutdown all six of their refineries and leave if the state refuses to negotiate with them on these proposed amendments.”
“THIS IS A HISTORICAL PRECEDENT!”
Western States Petroleum Association says that in California we use 7 million gallons of diesel per day, Ariza reminded. “With the shutdown of all six refineries and the loss of 1.186 million barrels per day of crude oil refining capacity the state will lose a minimum of 7 million gallons per day of diesel production. In addition to that loss the state will lose nearly ALL of the remaining jet fuel production for EVERY AIRPORT in the state.”
Ariza continued:
“Keep in mind that cities typically have three to five days of food supply on hand. With no diesel to transport food and with the loss of 25 million gallons per day of gasoline production people are going to starve. It’s simple logistics.”
“If in May the air resource board adopts the Cap and Invest proposed amendments then I would expect letters from all three corporations stating their intention to shut down and leave the state.”
Ariza’s concerns were amplified by War correspondent Michael Yon, who “has spent years tracking these patterns across continents. Now, he says the pieces are finally locking into place—and the result could be a level of famine the modern world has never experienced,” The Vigilant Fox confirmed on Substack. “He says a far more dangerous chain reaction is unfolding behind the scenes, one that could hit every grocery store, every supply chain, and every household all at once. He explained that critical maritime chokepoints like the Strait of Hormuz, Suez Canal, and Turkish Straits are not just trade routes, they’re lifelines for food, fertilizer, and fuel. If even a few of these are blocked at the same time, the effects cascade globally.”
“If this happens then the feds have to step in!” Ariza said “The loss of these refineries will cause the largest economical collapse in the history of the United States.”
They will redefine the word “SHORTAGE”!
“The civil unrest and probable loss of life in California, Nevada, and Arizona will be unprecedented.”
“The threat to the military, the entire west coast, and the nation as a whole will be both real and severe!!!”
And why would Gov. Newsom and the state’s Democrat lawmakers do this to California? Do they really plan to burn this state to the ground to rule over the ashes?
A California native and Navy mom, Katy lives in Sacramento, CA.
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Someone please send Nero’s fiddle to Gavin Newsom.
Any chance they have already spent the money they expect to take in from their new rules? Isn’t there a billion dollar guarantee to high speed rail from cap and invest funds to keep it alive? It’s a house of cards.
Too late now!
Where was Donald Trump when California and the West needed him???
Everything being done by Trump is symbolic not sustantive.
Gavin’s and his cohorts actions contrasted against Trump’s inaction reveals both operatives are leading the gullible minons to the same destination.
Always the liberal response is to deflect accountability to their adversaries.
Quit blaming the Trump administration for the mess that your Gov. “Hair-gel Hitler” Newsom and his Democrat cronies intentionally created.
The Trump administration cannot force oil refiners to remain in California because it does not have direct legal authority over private refinery operations, especially when state regulations and economic factors influence business decisions. Federal powers, such as those under the Defense Production Act, allow the federal government to influence energy infrastructure and prioritize contracts during emergencies but they do not compel private companies to maintain refineries in a specific state.
California’s high operating costs and strict environmental regulations have made it difficult for refineries to remain profitable which has lead to companies like Valero to shut down refineries. While the Trump administration can promote domestic production and ease federal permitting, it cannot override state laws or mandate that refineries stay open.
Trump is metaphorically letting Newsom “make his bed and sleep in it” and maybe the economic hellscape that is unfolding now will wake the eff up of all the low-information voters who reflexively vote for the D after a name on a ballot…
Unfortunately, diesel is now over $7 a gallon retail and all those trucks that ARE NOT ELECTRIC YET, and still run on diesel in the REAL WORLD, are going to only COMPOUND PRICE INFLATION as those diesel fuel costs get factored into pricing via overhead cost allocations.
THIS is what happens when California (s)elects “community organizers” who have ZERO UNDERSTAJDING of how the REAL economy works, and how accounting and financial theory and practice is applied in THE REAL WORLD, not the CARB’s MAKE-BELUEVE economic fantasy land of “cap and invest” .
This is gonna hurt, and hurt badly, but like an alcoholic going through withdrawal to get sober, maybe this will be the wakeup call that Califirnia DEMOCRAT politicians are for the most part DUMB ECONOMIC ILLITERATES, and do not understand how their war on “carbon” is going to cripple the California economy!
Just like economic illiterate Insurance Commissioner Ricardo Lara has driven the commercial insurance industry out of California with his incompetence and the Democrat environmental policies, so now the fuel industry has ALSO pulled out of California.
This is not Trump’s fault, this is 20 to 30 years of Democrat fantasyland policy finally getting a reality check from the real world.
The executives tried to warn them, but the Democrats did not heed the warnings.
This can change in June of this year if everyone STOPS VOTING FOR DEMOCRATS THAT GOT US INTO THIS MESS!
And this ESPECIALLY includes Tom Steyer, a “green energy ” hedge fund manager who made his billions in the early days of this “green energy” /”climate change” SCAM that is now going to crater the California economy!!!
President Trump owes California NOTHING – this is all on Governors Brown and Newsom!!!
I think I’m more concerned about that CAP and EXCLAMATION!!! violations in the article, geez.
JB is more concerned about punctuation violations in the article? JB sounds suspiciously like one of the bitchy queens on Newsom’s rapid response media team led by the pathetic drama queen, Izzy Gardon, the communications director, and Brandon Richards (he/him | 🏳️🌈 bi+), who heads online rapid-response efforts. Maybe JB should go back to trolling on Grindr?
Gov. Gavin “Hair-gel Hitler” Newsom and the criminal Democrat thug mafia that controls California don’t care about the danger and they’re intentionally driving the oil and gas industry out of the state? They’re probably hoping that petroleum products will be so expensive and in such short supply that many Californians will have switch to EVs (made by Newsom’s CCP cronies in China) or be forced to ride dangerous public transit where criminals and mentally ill homeless are allowed free reign by Democrats?
Purchasing EV;s in Commie California will not stop the starvation when all oil refineries pull out of the state. The fuel and food shortages will cause insurance to go through the roof. It is either purchase food, or fuel, or starve. Fuel and food shortages will cause martial law. Newscum is already preparing their next Democrank Governor to take over. Newscum and the thugs in the legislature have outlawed gas stoves and gas water heaters. Everything electric is just the stupidest idea ever. Newscum will destroy everything to make everyone run on batteries.
That’s enough. It is time to stop calling this “Cap and Invest”. Call it what it is, “Cap and Tax”. Using Democrap candy coated terms does not properly identify what is being done.
Let’s stop with “Climate Change”, too, and call the faux emergency “Global Warming”.
Long before California started talking about a billionaire’s tax, they implemented Cap & Trade under Arnold Schwarzenegger which ended up in effect being passthrough taxation on every Californian on all forms of energy (oil, electricity and natural gas) and water as corporations pass taxes charged to them to their customers. At that time, I do not recall energy corporations talking about leaving the state. The energy producer’s passivity was a nod and a wink to elected leaders (frog in the pot syndrome). Eventually elected leaders had to appear that they were taking sky high energy prices seriously and they passed a gas refiners profit margin scheme that CARB put on hold until 2029. At that point in time California experiences the closure of 2 large refiners. The remaining refining companies are now issuing threats to the state that if they increase the costs of the cap-and-trade program that they are all going to pull out of California and leave the market that has been previously reported as having the most registered cars in the nation. If we were to look back at campaign contributions made by these energy companies, we would most likely find contributions being made to some of the various politicians that are now driving them out of the state. Absolute corruption is literally destroying our state and nation. As history shows us if this corruption is not reigned in, we will all suffer. Gone are the days where we can turn a blind eye to it and say that it won’t affect me. Our society is at an inflection moment in time. Will we return to our Judeo Christion ways and ask God to heal our land or are we going to go headlong into oblivion.
Purchasing EV;s in Commie California will not stop the starvation when all oil refineries pull out of the state. The fuel and food shortages will cause insurance to go through the roof. It is either purchase food, or fuel, or starve. Fuel and food shortages will cause martial law. Newscum is already preparing their next Democrank Governor to take over. Newscum and the thugs in the legislature have outlawed gas stoves and gas water heaters. Everything electric is just the stupidest idea ever. Newscum will destroy everything to make everyone run on batteries.
California’s oil and gas crisis is a done deal thanks to Newsom and Donald Trump: Prepare for $8-10/gal gasoline or leave California! Trump’s “step and fetch it” syncophant Vance can’t deliver on his promise of fuel price relief either as the operatives including your endeared Republicans are onboard to secure your demise.
Your major concern now is somehow surviving the war Benjamin Netanyahu and his lacky Donald Trump have created involving Iran. Regardless of your political persuasion the subject trumped up war will not end well thus prepare accordingly.
Netanyahu’s water boy Donald Trump has told us of the loss of Innocent American lives sure to occur thus applying whatever pressure you legally can to stop the insane and compromised Donald Trump should be the immediate priority.The illegal war already underway also serves as an excellent distraction from what underlying tactics are being employed to secure the contrition of the minions.
BEWARE!
Oh look, Newsom’s pathetic troll Eyeinthesky is foaming at the mouth again and is ridiculously trying to shift the blame for California’s oil and gas crisis from Gavin Newsom and his Democrat cronies. They created it and they own it. If anyone is insane and compromised, it’s Eyeinthesky’s master Gavin Newsom who is a WEF globalist stooge.
California will suffer high gas prices and possible shortages because of Eyeinthesky’s master Gavin Newsom and his Democrat cronies, but sensibly run Republican states like Texas will be fine.
There’s a regime change going on in Iran just like there was in Venezuela and like there will be in Cuba. The globalist deep-state is being dismantled and criminal thugs in power are being banished.
Eyeinthesky is a dimwit who regurgitates idiotic Democrat talking points from propaganda outlets like CNN and MS NOW. Eyeinthesky was probably shuffling around and muttering incoherently while carrying a preprinted sign at one of the lame No Kings protests on Saturday?
While you’re on a roll, please rationalize the war in The Ukraine.
Newsom’s troll Eyeinthesky is always deflecting for his WEF globalist master and has never once posted one negative thing about him.
The war between Russia and Ukraine was encouraged by the Biden regime through it’s proxy NATO.
President Trump has criticized both Russia and Ukraine at different times and has pursued peace negotiations emphasizing territorial concessions and reduced U.S. military aid, pressuring Ukraine to accept deals that include ceding territory to Russia and staying out of NATO.
Now run along Newsom troll.
Ukraine started under the Biden Administration, so yes, please rationalize that for us!
As an ex-Pat from CA, who was born, raised, schooled and paid my taxes, c’est la vie Comrade Gavinsky, you narcissistic, psychopathic, asshole.