Marathon Petroleum Warns Newsom: CARB’s Cap-and-Invest Amendments Threaten Widespread Shutdowns, Massive Economic Damage

On Monday, Marathon Petroleum Corporation (MPC) delivered a blistering warning to Governor Gavin Newsom and top state officials in a letter declaring that proposed amendments to the California Air Resources Board’s (CARB) Cap-and-Invest program would make California refineries “among the most expensive refineries to operate in the world,” threatening widespread shutdowns, fuel shortages, skyrocketing prices, and massive economic damage.

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Marathon sends letter to California leaders, warning upcoming vote by state regulators could push more oil refineries to shut down.

“If refineries are driven out of the state, these jobs, tax revenues and economic benefits will be lost and cannot be easily replaced.” pic.twitter.com/y8kjxgyZJW

— Ashley Zavala (@ZavalaA) March 9, 2026

The letter, sent to Newsom, CARB Chair Lauren Sanchez, California Energy Commission Vice Chair Siva Gunda, Senate Pro Tem Monique Limón, and Assembly Speaker Robert Rivas, paints a dire picture for the state’s energy security. MPC, which operates California’s largest refinery—a 365,000-barrel-per-day facility in Los Angeles—and the Martinez Renewables plant, directly employs more than 2,000 workers in high-paying union and non-union jobs.

Direct quotes from the letter include:

• “The Proposal will Negatively Impact Jobs, Tax Revenues, and the California Economy.”
• California refineries would face operating costs “among the most expensive refineries to operate in the world,” resulting in “threaten[ed] viability” of in-state operations.
• With “roughly 18 percent of the state’s refining capacity [is] closing within a six-month period,” the proposal is “alarming” because it “further destabilizes a critical sector of California’s economy.”

MPC warns of tighter fuel supplies, higher gasoline prices, and severe risks to jobs, tax revenues, and economic stability—effects that could ripple into national security given California’s role supplying fuel across the West Coast.

This comes on the heels of similar alarms from Chevron, which called the amendments a “death knell” for remaining facilities, forecasting gasoline prices rising more than $1 per gallon by 2030 and threatening to shutter its Richmond and El Segundo refineries. The Western States Petroleum Association has warned the changes could impose $5–9 billion in additional costs on refiners over the next decade and put more than 536,000 California jobs at risk.

Last month, PBF Energy warned that if amendments are enacted as written, they “will inevitably drive in-state refining capacity to zero.”

California’s refinery count has plummeted over decades—from more than 40 operations in the mid-1980s. Under Governor Newsom’s tenure, the collapse has accelerated dramatically.

Recent closures include Phillips 66’s Los Angeles (Wilmington/Carson) refinery, which shut down in late 2025, and Valero’s Benicia refinery, set to cease operations by April 2026. These losses represent roughly 17–20% of the state’s refining capacity vanishing in a short window, with projections showing only 11 refineries remaining by the end of 2026—and just five to seven large-scale facilities still producing significant gasoline volumes.

These closures have already driven brutal gas price spikes. Statewide regular gasoline averages surged about 40 cents in just two weeks in February 2026 (from around $4.18 to $4.58 per gallon) and jumped another 43+ cents in a single week by early March, pushing the average above $5 per gallon—reaching $5.078 on March 7 and $5.204 as of March 9, according to AAA data. California continues to lead the nation in gas prices, often $1.50–$2+ above the national average, with analysts warning of potential surges to $7–$8+ per gallon by late 2026 if further closures proceed without intervention.

While Governor Newsom touts his “success” on national and international stages, he is presiding over perhaps the largest collapse of the oil industry, refinery operations and gasoline production in U.S. history.

California’s self-inflected gasoline crisis is not only increasing prices at the pump, but increasing dependency on foreign oil suppliers and shippers to supply fuels to the Golden State, and  a direct threat to U.S. military force readiness on the West Coast, the Globe reported in October.

California now produces less than 23 percent of its own in-state petroleum needs and already imports over 70 percent of its crude oil from foreign sources–before the refinery closures. The oil and gas industry in California account for nearly eight percent of the state’s GDP. Without oil and gas, the other 92 percent of the state’s GDP would be impossible to attain, Ariza Professor Michael Mische and Assemblyman Stan Ellis have been warning.

The Marathon letter surfaced publicly via an X post by journalist Ashley Zavala as lawmakers returned to session.

With CARB’s public comment period closing today (March 9, 2026) and a board hearing set for Q2, the industry’s warnings are growing louder.  The California Globe will continue covering this escalating Democrat-designed crisis as the vote nears.