Posted originally on May 8, 2025 by Martin Armstrong
Oil refinery Valero has opted to close its operations in California due to excessive regulations on energy. Located in the small city of Benicia, the town is expected to lose 400 jobs, which the mayor is calling the exit “a major hit on the city.” Everyone in California is feeling the impact of Newsom’s war on fossil fuels.
Valero said its decision ” follows years of regulatory pressure, significant fines for air quality violations, and a recent lawsuit settlement related to environmental concerns.” “California has been pursuing policies to move away from fossil fuels for really for the past 20 years. And the consequence of that is the regulatory and enforcement environment is the most stringent and difficult of anywhere else in North America,” Valero CEO Lane Riggs told reporters. His company faced $82 million in fines dating back to 2003 for emissions, marking the highest penalty issued in the Bay Area Air District.
Energy company Phillips 66 abandoned its operations in Los Angeles last year, citing long-term instability due to political policy. California’s refining capacity has declined 21% over the past three years, and as a result, gas prices are expected to rise by 75% by 2026 if major intervention is not taken.
California’s gas deficit ranges from 6.6 million to 13.1 million per day. “. Reductions in fuel supplies of this magnitude will resonate throughout multiple supply chains affecting production, costs, and prices across many industries such as air travel, food delivery, agricultural production, manufacturing, electrical power generation, distribution, groceries, and healthcare,” University of Southern California professor Michael A. Mische stated after studying California’s history of supply and refining capacity. This will plunge the state into further debt and reduce the overall GDP for the entire nation.
California already has the highest gas prices in the nation at $4.616 per gallon. How will people afford to pay up to $8.435 per gallon in a year’s time? California’s excise tax on gas has risen 253% in the past 30 to 50 years, while the number of cars has increased by 38% and the population increased by nearly a quarter. “Meanwhile, the number of refineries has declined by 56%, in-state oil field production has fallen by 63%, finished gasoline stocks have declined by 98%, in-state daily refinery capacity has decreased by 36%, average gasoline prices for all formulations have gone up by 253%, and imports of non-U.S. foreign oil increased 712%,” Mishe reported,
Newsom had hoped to implement a ban on fossil fuel vehicles but was overruled. Voters cheer when he states he will tax and charge refineries for emissions, but they fail to realize that those charges will be passed down to everyone. The governor is eyeing the White House and believes he can implement these same failed policies at the federal level.
