Two Refineries GONE — California’s Fuel Nightmare

California’s green energy crusade just collided with economic reality, threatening to leave millions of hardworking families stranded with skyrocketing fuel prices and potential shortages as two major refineries shut down, eliminating nearly 300,000 barrels of daily capacity.

Story Snapshot

Phillips 66 Wilmington and Valero Benicia refineries closing by April 2026, wiping out 17-18% of California’s refining capacity
Over 600 direct jobs lost as regulatory burdens and carbon credit costs make operations economically unviable
Experts warn fuel prices could double compared to national averages while supply shortages threaten West Coast communities and military bases
California may become dependent on Asian imports with weaker environmental standards, exposing the hypocrisy of state green policies

Regulatory Overreach Forces Refinery Exodus

Phillips 66 shuttered its 145,000 barrel-per-day Wilmington refinery in December 2025, followed by Valero’s planned closure of its 145,000 barrel-per-day Benicia facility in April 2026. These closures eliminate approximately 290,000 barrels of daily refining capacity, representing 17-18% of California’s total production. Both companies cited economic unviability driven by California’s punishing Low Carbon Fuel Standards, carbon credit costs reaching hundreds of millions, and mandated emissions upgrades. This represents government overreach at its finest—regulations so burdensome they force private enterprises to abandon operations despite state pleas and bailout offers worth hundreds of millions of taxpayer dollars.

Decades of Hostile Policy Create Supply Crisis

California’s refining sector has collapsed from approximately 40 facilities in the 1980s to just 12 in 2025, dropping to 10 after these closures. This consolidation stems from decades of progressive policy prioritizing environmental virtue signaling over energy security. The state’s in-state oil production plummeted 65%, forcing increased import dependence even as regulations made refining unprofitable. Recent shutdowns include Phillips 66’s Rodeo facility conversion to renewable diesel in early 2024 and Marathon’s Martinez closure in 2020. Meanwhile, California’s unique “boutique” fuel requirements prevent easy substitution from other U.S. regions, creating a captive market now facing catastrophic supply constraints.

Workers and Families Pay the Price

Over 600 workers face direct job losses from these closures, with multiplier effects devastating suppliers and local economies in Wilmington and Benicia communities. California Representative Vince Fong warns of “cascading failure” risks including potential blackouts and fuel shortages affecting the entire West Coast, Arizona, and Nevada. Asphalt contractors face immediate disruptions threatening infrastructure projects. The Biden-era regulatory environment that enabled this crisis ignored basic economics, assuming refineries operated with unlimited profit margins. Lauren Teixeira of the Breakthrough Institute notes regulators fundamentally misjudged refinery economics, setting the stage for Asian import dominance requiring massive infrastructure upgrades paid by taxpayers.

Foreign Dependence Replaces American Energy Independence

The supreme irony of California’s green agenda now becomes apparent: these closures will likely accelerate imports from Asian refineries operating under weaker environmental standards, with fuel transported via emissions-heavy tanker ships. While some analysts like UC Santa Barbara’s Paasha Mahdavi suggest declining demand may offset shortfalls through remaining refineries and out-of-state supplies, industry experts warn California’s specialized fuel blends and infrastructure limitations make this optimistic scenario unlikely. HF Sinclair and PBF Energy plan increased supplies from Washington and Midcontinent facilities, but capacity constraints remain severe. The state that championed energy independence now faces dependence on foreign suppliers, undermining both economic security and the environmental goals supposedly justifying these devastating policies.

Governor Newsom’s September 2025 six-bill legislative package offering financial support came too late to reverse decisions driven by years of accumulated regulatory burden. Valero’s financial filings confirm operations became unprofitable due to LCFS requirements and carbon credit expenses. This manufactured crisis demonstrates how progressive ideology divorced from economic reality destroys American jobs, threatens energy security, and ultimately fails even its stated environmental objectives. Families across the West Coast will soon experience the consequences at the pump, paying premium prices while politicians blame everyone except their own failed policies.