The Valero oil refinery in Benicia, California, has been shut down, sending shockwaves through the state's energy landscape. This development comes as no surprise to experts, who have long predicted the impending closure. But here's where it gets controversial: while some blame the state's stringent regulations and fines, others argue that the closure is a result of the oil and gas industry's struggle to adapt to California's 'clean energy all-electric future' under Governor Gavin Newsom's leadership.
Mike Ariza, a former Valero manager and oil and gas expert, confirmed the shutdown, stating that it began on January 31st. The refinery is reportedly 'cold' according to thermal imaging reports, and the Crimson pipeline, which transported crude oil from Southern to Northern California, has also ceased operations. Ariza emphasized the unprecedented nature of the oil crisis, stating, 'We are in an unprecedented oil crisis.'
The closure of the Benicia Refinery is part of a larger trend. In April 2025, Valero Energy Corporation announced its plan to shut down the refinery in April 2026, citing low operating margins, increased operating costs, and a harsh regulatory environment. This decision followed the relocation of Chevron Oil Company to Houston, Texas, and the shutdown of the Los Angeles refinery by Phillips 66 in October 2025.
However, oil and gas experts had predicted an earlier shutdown, and gas prices were already on the rise. USC Professor Michael Mische, in an April report, highlighted the impact of California's energy policies, including a state-mandated moratorium on internal combustion engine vehicles by 2035 and a $85 million fine for 'egregious emissions violations.' These factors, combined with the relocation of Chevron and the closure of the Phillips 66 refinery, have contributed to the industry's challenges.
Governor Gavin Newsom's response to the shutdown has been met with criticism. His statement, which praised California's collaboration and data-driven approach, was seen as a 'Look at ME' moment by some. Newsom's 'clean energy all-electric future' has been blamed for the harm inflicted on the oil and gas industry.
The national average price for a gallon of gas is $2.89, but California's average price is $4.25 and climbing. Assemblyman Stan Ellis, USC Professor Michael Mische, and petroleum expert Michael Ariza have warned that California's self-inflicted gas crisis poses a direct threat to U.S. military force readiness on the West Coast. Their report exposed how Newsom's energy policies are sabotaging domestic refining capacity and leaving military bases vulnerable to foreign adversaries.
The closure of the Benicia Refinery has sparked a debate about the future of California's energy sector. While some argue that the state's regulations are necessary for a sustainable future, others question the impact on the economy and national security. As the state grapples with the consequences of its energy policies, the question remains: will federal intervention be necessary to address the crisis?
