Valero Shut Down Benicia Refinery Jan 31st – CA Gas Prices Already Climbing

The Valero oil refinery in Benicia, CA is shut down. Mike Ariza, former Valero manager and oil and gas expert, told the Globe Tuesday that they started shutting down January 31st, and thermal imaging reports that the refinery is cold. And he said the Crimson pipeline, which moved crude oil from Southern California to Northern California is also down.

“We are in an unprecedented oil crisis,” Ariza said.

In April 2025, Valero Energy Corporation announced it would shut down its Benicia Refinery in April 2026.

This hit came after Chevron Oil Company relocated to Houston, Texas from the Bay Area, and Phillips 66 began shutting down its Los Angeles refinery in October 2025.

But our oil experts predicted months ago that Valero appeared to be aiming to shut down sooner, and gas prices were already starting to shoot up. 

As oil and gas expert USC Professor Michael Mische reported at the Globe in April:

Citing low operating margins, increased operating costs and a growingly harsh regulatory environment, including a state mandated moratorium on the sale of internal combustion engine vehicles by 2035, and in the wake of an $85 million fine related to “egregious emissions violations levied on it by the California Air Resources Board (CARB) and Bay Area Air Quality Management District, Valero Energy Corporation today, April 16, 2025, served notice to the California Energy Commission (CEC) to “idle, restructure, or cease refining operations at Valero’s Benicia Refinery by the end of April 2026.”  Correspondingly, and in recognition of its plans for the California operational environment, Valero has incurred a write-off charge of $1.1 billion related to asset impairments for its Benicia and Wilmington California refinery operations.

In January, California Governor Gavin Newsom issued a statement following Valero oil company’s update that it would power down its Benicia refinery but continue to supply California’s market with imported gas.

Newsom’s statement read as if a 10-year old screaming “Look at ME” wrote it:

“While others point fingers to spread fear and divide us, California is doing the actual work—collaborating with industry, using data and transparency to protect consumers, and building the all-of-the-above energy future America needs. We’re in ongoing discussions with Valero to evaluate options for continued operations at the Benicia refinery and I appreciate the company planning responsibly, including planning for imports of refined products to supply the market in the meantime.”

Governor Gavin Newsom

Newsom even took a tactless victory lap, as if he is responsible for saving Valero. Important to note: it’s Gavin Newsom’s “clean energy all electric future” with a ban on internal combustion engine autos, which has inflicted the most harm on the oil and gas industry.

The national average price for a gallon of gas today is $2.89; California’s average price for a gallon of gas is $4.25 – and climbing.

As the Globe reported in December, Gov. Newsom is presiding over perhaps the largest energy policy collapse of the oil industry, refinery operations and gasoline production in U.S. history. A momentous report recently prepared by California Assemblyman Stan Ellis, USC Professor Michael Mische, and petroleum expert Michael Ariza, warned that California’s self-inflicted gas crisis is also a direct threat to U.S. military force readiness on the West Coast, the Globe reported in October.

Their report exposed how Governor Newsom’s energy policies are sabotaging domestic refining capacity and leaving U.S. military bases in the West vulnerable to foreign adversaries like Russia and China.

Their conclusion is that there must be federal intervention.

Ariza told the Globe in December that Valero, which announced in April 2025 that it would be shutting down its Benicia refinery in April 2026, bumped the closure date up to January. Ariza explained why:

“The Phillips 66 refinery in Wilmington shut down on October 17th is taking 140,000 barrels per day of crude oil refining offline. Originally Valero in Benicia was slated to shut down in April of 2026. However, given the fact that they cancelled their crude oil contracts over six weeks ago it looks like they will be shutting down no later than January of 2026, four months ahead of schedule.

Now, Valero is not even seeking to try and sell the refinery. Even after the state tried to convince Valero to remain open, they elected to shut down. And instead of shutting down in April, they shutdown in January. All due to the state’s egregious regulations and unprecedented unjustified fines.”

Ariza said when refineries shut down, more Californians will leave the state. California’s oil and gas industry provides 536,770 total jobs in California and 148,140 Californians are directly employed by its individual companies—along with the $338 billion total economic contribution to California’s economy.

Notably, in January, the Globe reported, “In an offensive move underscoring the ripple effects of California’s radical and punitive energy policies, Nevada Governor Joe Lombardo (R) announced today the appointments to the newly established Fuel Resiliency Committee.”

Arizona gets nearly half of its gas from California. And the vast majority of Nevada’s gas – 88% – comes from California.

California today produces less than 23% of its own in-state petroleum needs and imports over 65% of its crude oil from foreign sources, yet the oil and gas industry in California account for nearly 8% of the state’s GDP, even in its diminished capacity.

In 1988, the state of California only imported about 4.5% of all the oil that we consumed in our state. By 2020 we were importing over 70%.

As Assemblyman Ellis, Professor Mische, and petroleum expert Ariza warned recently, without oil and gas, the other 92% of the state’s GDP would be impossible to attain.

Remember, USC Professor Michael Mische has warned that California is facing $8.43 per gallon of gas as refineries close.

That won’t look good in a presidential campaign.