Gasoline Pump (Photo: ThePowerPlant/Shutterstock)
Valero Energy Announces Plans to Exit California, Incurs $1.1 Billion Charges to Refinery Operations
Predictable, inevitable, regrettable, and preventable…California retail gasoline to increase further in 2025 and 2026
By Michael Mische, April 16, 2025 5:50 pm
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.
To better appreciate the implications of Valero’s decision necessitates an understanding its Benicia refinery complex. For 2024, the Benicia complex represented 8.94% of California’s oil refinery capacity, and 9.04% California special blend gasoline production. The complex was capable of processing 145,000 barrels of oil a day, or slightly less than 2.92 million gallons of gasoline a day based on an average yield of 48% for gasoline products per barrel. On average, Californians consume around 35 million gallons of gasoline a day. The Valero complex represents about 8% of California’s daily consumption. Valero’s Benicia refinery also produces aviation (jet) fuel which services, via pipelines, both the San Francisco International Airport (SFO), Oakland International Airport (OAK) and Sacramento International Airport (SMF) and employs 400 skilled and higher wage workers.
Valero joins Phillips Petroleum which, in late 2024, announced the intended closure of its Los Angeles (Willington) refinery complex that processes 139,000 barrels of oil a day and represented 8.66% of California’s total in-state refining capacity in 2024. Adding to the list of oil companies and refiners leaving the Golden State is Chevron which has targeted 2030 as its exit date.
Collectively, in just a few short years, Californians are facing a reduction upwards of 21.77% in refinery capacity and gasoline production for the 2023 to 2026 period. From 2023 to 2024, state-wide California refinery capacity fell 5.1%, and from 2024 to 2025 (YE), refinery capacity is expected fall by another 6.12%. From 2025 to calendar year end 2026, California refinery capacity could be reduced by another 12.15%. In aggregate, California refinery capacity could fall from 1.71 ,million barrels a day in 2023 to 1.322 million barrels a day in 2026. It is doubtful that the demand for gasoline in the Golden State will fall by an equivalent amount. The resulting gap, along with other legislative and regulatory mandates which add cost to a gallon of gasoline will contribute to higher gasoline prices at the pump for Californians.
California refiners are some of the most sophisticated and complex operators in the world. However, it is unclear as to whether existing refiners can or would be inclined to increase capacity to compensate for the anticipated production losses of Phillips and Valero refineries given the current legislative and regulatory environment. Certainly with 2035 looming prohibiting the sale of new gasoline drive vehicles, refiners have no incentive to invest in upgrades or capacity. Consequently, Californians, which are already highly dependent on foreign oil sources such as Iraq, will most likely be dependent on sources for gasoline produced in Washington state and the Gulf Coast. In either scenario, California gasoline prices will undoubtedly increase due to supply stresses, timing conflicts associated with different seasonal blend calendars, maritime transportation costs, and out of state refinery operations and the costs associated with producing California’s LCFS (special blend) gasoline, which is unique to the Golden State. Most likely, overall, Greenhouse Gas Emissions (GHG) will increase as a consequence to more maritime shipments.
Read the complete study of 50-Years of California Gas Prices at:
https://drive.google.com/file/d/1bb6_GAiwkT2pEVYTZECwyxSiCqI_d0m2/view
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Had Californians voted to replace Newsome with Larry Elder this wouldn’t be happening: California’s death knell.
@Eyeinthsky, You have that right!
Maybe voters did vote to replace “Hair-gel Hitler” Newsom? Do voters in California really decide the outcome of elections when there’s rampant Democrat voter fraud and rigged voting machines?
TJ, you are onto something here. https://www.thegatewaypundit.com/2025/04/tulsi-gabbard-drops-bomb-voting-machines-says-evidence/
They named it “dominion” for a REASON…
And Tulsi Gabbard, CISA and SLI all know about the Democrat-selected platform’s FEATURES, not bugs… (Looking at YOU, Alex Padilla!)
Also, Phillips 66 is also in WILMINGTON, NOT WILLINGTON…
“Valero joins Phillips Petroleum which, in late 2024, announced the intended closure of its Los Angeles (Willington) refinery complex that processes 139,000 barrels of oil a day and represented 8.66% of California’s total in-state refining capacity in 2024. ”
We are SCREWED BY BEING BLUED, by corrupt California Democrats, who appear to be on either the CCP, or $oro$ payroll, because they sure as HELL ain’t on the side of California citizens….
“Egregious emissions violations”
Of course they have documented all this to stand up in a court of law?
Most of their regulations have been opinions not science..
That’s all that CARB AND the “Coastal Commission” and other unelected “commissions” do…
Front-run unpopular decisions for
corrupt Democrats, thereby protecting them from political pressures or responsibilities…
HOWEVER – if one PAYS ATTENTION to the excellent reporting provided on this site, one QUICKLY realizes that most of these unelected Democrat STOOGES have been put on the “commissions” by Gavin Newsom, or Jerry Brown, two of THE WORST GOVERNORS in the entire United States. Both of them are corrupt to their cores, and on the take to nefarious globalist entities…
The issues related to the criticality of refining infrastructures in California and the west calls for the immediate intervention of Trump to halt this madness; a matter of national security.
Unfortunately Trump is more concerned with initiating a war in the Middle East. This is Trump’s defining issue and moment.
the Democratic party has run California in to the ground ! California has all the natural resources to run on their own. The funny thing is people keep voting Democrat expecting different results. Democrats are some of the dumbest people you will ever meet!
A real leader (governor) would be on the phone with Valero asking what can we do to keep you in business supplying fuel to the Californian people and to their businesses. No doubt Noisome is getting a pat on his head from his master Xi.
Given electric vehicle sales are up that percentage amount it makes sense. Well, to those with any critical thinking.
Is it ax handles and to torches time yet? How long are we going to allow these politicians to keep screwing us. They don’t care about the price of gas. They love it higher. They get more tax money to waste on their friends and pet projects. When it starts to affect them they will just give themselves another pay raise. When California, when?
What this article doesn’t mention is the increase in gas costs in the other states these refineries serve, Arizona and Nevada . We have to pay more at the pump because of idiot Newsome. If you want an example of taxation without representation, this is it.