Governor Newsom Ineptly Self-Congratulates on Benicia Valero Refinery News

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.

The Globe reported, “Valero’s announcement that it will shut down its Benicia refinery in April 2026 is yet another blow to California’s already fragile fuel supply system,” the California Fuels & Convenience Alliance said. “The decision reflects the growing impact of California’s increasingly aggressive energy policies, which have made it more difficult for in-state refineries to continue operating. As a result, this closure will leave the state with just seven remaining in-state refineries capable of producing California’s uniquely formulated gasoline—a dangerously low number for a state of nearly 40 million residents.”

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

Newsom’s statement reads 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

Under Valero’s updated plan, the Benicia refinery will continue producing gasoline through April 2026, and then continue importing gasoline into Northern California beyond April once the refinery fully idles—a strategy that will help maintain steady supply and stable prices as discussions continue on a path forward for the refinery, NBC Bay Area reported. “Valero will proceed with idling through a phased approach, starting with its processing units in February, due to required mandatory state inspections that cannot be deferred,” Valero said in a statement.

“We continue to carefully evaluate all strategic options for the Benicia assets and remain in close communication with state officials. Valero remains committed to fulfilling its contractual supply obligations in the California market and anticipates importing additional gasoline volumes to the Bay Area in the near term,” the statement said.

However, then Newsom took a tactless victory lap, as if he is responsible for saving Valero. Important to note: it’s Gavin Newsom’s “clean energy future” which has inflicted the most harm on the oil and gas industry.

Here is the rest of his statement:

Maintaining stability today while accelerating the clean energy future

Thanks to Governor Newsom and the Legislature’s commitment to proactive planning and consumer protection, California is responsibly strengthening its in-state supply and accelerating the shift to cleaner energy. Last year, the Governor signed a historic package of bipartisan legislation to stabilize the petroleum fuels market, cut pollution, and save Californians billions. This package included SB 237 — legislation that increases crude oil production in Kern County, boosting domestic crude availability as California manages its long-term energy transition while maintaining strong health and environmental safeguards.

Key Points to Consider 

General Impressions [emphasis The Globe]

• In its 1/6/26 statement, Valero merely reconfirmed its intentions to cease fuels production in April 2026 as per its April 2025 notice to the CEC and shareholders.
• Valero’s commitment to fulfill contractual supply obligations by importing gasoline is geared towards “the near term” with no specific details or stated intentions for the longer term. 
• Rather than a new revelation, Valero had previously announced plans to import gasoline, which is consistent with analysts’ sentiments.
•  The Governor failed to mention the loss of jobs and city revenues because of Valero’s voluntary exit.
• The Governor failed to discuss/disclose some important information and data:
• The critical question is which countries will Valero source imported gasoline from in the future, and will delivery be consistent?
• Sources and Options

1. 1. 1. India: 40% of India’s crude oil is imported from Russia, with some suspicions of Iranian oil, as well.
         1. The U.S. has imposed sanctions on Russia, Iran, and India.
      2. China: The largest consumer of Russian crude oil also consumes over 90% of Iranian crude production.
      3. Venezuela to U.S. refineries: Shipping from Gulf Coast plants directly to CA will require Jones Act compliant vessels…there are less than 60 Jones Act compliant tankers and all are chartered.(The Jones Act, officially known as the Merchant Marine Act of 1920, is a U.S. law that requires goods transported between U.S. ports to be carried on ships that are built, owned, and crewed by Americans.)
      4. Venezuela to U.S. and CA: Venezuela to Gulf Coast to the Bahamas to California: Shipping will be on foreign-flagged vessels, with additives blended in the Bahamas and then shipped through the Panama Canal.

Questions

1. 1. 1. How many barrels a day will Valero source? (Enough to satisfy contractual obligations?)
      2. How will Valero transport imported gasoline to Benecia?
      3. What incremental costs differential will CA pay for imported gasoline?
      4. What will the total, incremental cost of GHG emissions be from Valero’s importation of gasoline?
   2. What will Valero’s post-shutdown storage capacity be for gasoline and where will the tanks be located? (They already rent tanks in the area that are unassociated with the refinery)
   3. Has the CEC determined the environmental impact of additional tanker vessels and traffic on the SF Bay and Water District?  
2. Notably, the Governor failed to fully explain that Valero will be suspending operations in February to conduct state-required inspections, perform maintenance, and begin shutting down refining process units. 
3. Notably, the Governor never mentioned that Valero’s stated intention is to finish refining its current inventory of crude oil, rather than adding to crude oil inventory.
4. Notably, the Governor was silent on the added costs to CA consumers from importing gasoline into to the state.
5. In 2025, Valero wrote off $1.1 billion of refinery assets in California, which includes both Benicia and its Wilmington Refinery in Los Angeles County.

Industry Engagement & Collaboration

1. “California is doing the actual work—collaborating with industry…”
2. CA policies and over-regulations have created the current situation.
3. Governor Newsom has been demonizing the oil industry for years:

1. 1. “They are lining their pockets by ripping off Californians”

2.  “Big Oil has been lying and gouging Californians.”
3. “…California families were fleeced at the pump…”
4. “They’ve been screwing you for years and years and years. There’s no other way to put it.”

3. Global demand for oil is declining.

• False. 

1. Global oil demand and consumption increased to 203 million barrels a day in 2025 and is expected to continue to increase through 2050.
2. Goldman Sachs expects oil demand to increase to 113 million barrels a day by 2040, or almost 10%.

4. California gasoline prices have been declining.

1. True…but the drop has is unrelated to Gavin Newsom’s policies or actions.
   1. CA is the beneficiary of Pres. Trump’s energy policies that are increasing global crude oil production, which is lowering the price of gasoline.
   2. There is a “glut” of crude oil in the global market, which is placing downward pressure on gasoline prices.
   3. There has been some moderation in gasoline consumption in CA, particularly in December due, in part, to severe weather.
   4. Ironically, while the cost of oil and gasoline prices across the U.S. fell in 2025, CA’s regulatory costs, which contribute to retail pump prices, increased. 
2. Since Pres. Trump took office in January 2025, crude prices have fallen by 20-22%.

There is so much more, I am including Professor Mische’s complete PERSPECTIVE ON  GOVERNOR GAVIN NEWSOM’S VALERO PRESS RELEASE  “FACTS, DATA & REALITY paper with complete footnotes for sources: