Statewide Fuel Shortages are Imminent

November 5, 2025, I wrote an article titled “An Increasing Threat to Readiness,” expressing my concern about our declining in-state crude oil production and refining capabilities. At the end of that article, I wrote about the need for presidential intervention under the Defense Production Act based on what I saw happening at that time. I was also very concerned about where we were headed in the future based on state policies. In this article, it is my intent to give the reader a chronological list of where we were, where we are now, and what lies ahead.

October 21, 2025, a 10-page brief was published in Washington, D.C., by myself, USC Professor Mike Mische, and Bakersfield Assemblyman Stan Ellis. The brief was titled “California Energy and Fuel Policies: A Clear and Present Threat to National Security and Force Readiness.” In this brief, we stated our serious concerns about National Security being threatened by state policies. We asked for “immediate” federal intervention under the Defense Production Act to save our state and military from what we all saw as an impending disaster.

September 5, 2025, Andy Walz, the CEO of Chevron, stated in an interview: “I THINK WE ARE AT THAT CRISIS MODE.” Regarding the impending shutdown of the Wilmington Refinery and the Valero Refinery in Benicia, Mr. Walz stated:

“We will lose another 20% of gasoline that people need to go 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.”

October 17, 2025, the Phillips 66 Refinery in Wilmington shut down. Our fuel imports from Asia increased to 30% of our total consumption. We did not see significant price increases at this point, as our ability to offload incoming fuel tankers had not yet reached its limit. However, after the Wilmington shutdown, both my colleagues and I were deeply concerned that the closure of the Valero Refinery would be the tipping point.

January 31, 2026, the Valero Benicia Refinery pulled crude oil feed from its crude unit. Three days later, thermal imaging reports indicated that the refinery was cold. They were down for good. They shut down in January as we had predicted, not in April as the press continues to report.

At this point, imports of gasoline, jet fuel, and diesel increased to approximately 42%. By the first week of February, prices in Northern California started to climb. By the beginning of the Iranian War, our prices had already increased by 80 cents per gallon. These price surges were proof that our concerns were correct; clearly, our ability to offload fuel tanker ships had reached its limit.

April 21, 2026: As we approach May and the summer driving season, an unprecedented crisis is approaching due to state policies. My team previously stated that events such as storms at sea, unscheduled refinery downtime, or global events could severely cripple our state because we were importing over 40% of our refined fuel.

With the onset of the Iranian War, crude oil supplies to all refineries in Asia were cut off. This forced Asian countries to cut back the crude oil rates to all of their refineries. As their crude oil charge rates were cut, their production of gasoline, jet fuel, and diesel also declined. Approximately four weeks ago, their production rates dropped so low that they were forced to discontinue all shipments of fuel to California.

Currently, we only have two to three more weeks of fuel ships still in transit across the Pacific. After three weeks, once they are offloaded, we have nothing backing them up. 42% of our gasoline, jet fuel, and diesel supplies will be gone.

What Does this mean for us?

Inventory Lows: Gasoline inventories in our state are currently at a 10-year low.

Price Surges: Once the fuel ships stop arriving, prices will likely surge to historic levels as the state’s fuel reserves are exhausted.

Widespread Shortages: We can expect unprecedented shortages in California, Phoenix, Reno, and Las Vegas.

Supply Chain Collapse: Due to diesel shortages, we can expect the price of all goods to increase, along with the real possibility of commodity and food supply issues.

Aviation: Jet fuel prices have already doubled. Once these shortages hit, we should expect massive flight cancellations.

What about our remaining refineries?

Phillips 66 in Wilmington and Valero in Benicia shut down because of the state’s egregious policies and regulations. Valero took a $1.1 billion loss just to shut down and leave the state. One would conclude that the remaining seven refineries are running at maximum rates to help with the import shortfall.

Well, they would if they could. Unfortunately, they have also fallen victim to terrible state policies. Despite California having the 5th largest oil reserves in the nation, new drilling permits have declined by over 90% under this Governor’s tenure. We import 65% of our crude oil, with 30% coming from the Middle East. The loss of Middle Eastern crude has forced our remaining in-state refineries to cut back their production rates.

What can be done?

Immediately suspend the CA Low Carbon fuel standard in favor of the federal reformulated gas blend. This would allow us to receive gasoline from suppliers on the Gulf Coast.

Suspend the summer blend requirements.

Suspend or substantially cut the California excise tax.

Suspend Cap and Trade costs.

On April 20th, the President issued a presidential memorandum directing the Secretary of the Interior and the Secretary of Energy to take necessary actions under the Defense Production Act to ensure the viability of the refining industry and crude oil production. If this had been done when we first requested it back on October 21st, we would be in good shape. Unfortunately, it was not. At this point, it is likely too little, too late.

As for me personally, I have stocked up on food and fuel. I even purchased a small portable radio. For more information, including the presidential memorandum and important letters from oil corporations to the state, visit GASCRISIS.ORG. We will keep that domain up to date as things progress.