Valero's Benicia Refinery Shuts Down, Causing Gas Price Hikes in California
The Valero oil refinery in Benicia, California, has been shut down, leading to a surge in gas prices. Mike Ariza, a former Valero manager and oil and gas expert, confirmed the closure, citing thermal imaging reports indicating a cold refinery. The Crimson pipeline, which transported crude oil from Southern California to Northern California, has also ceased operations.
Ariza emphasized the unprecedented nature of the oil crisis, stating, 'We are in an unprecedented oil crisis.' Valero Energy Corporation had initially planned to close the Benicia Refinery in April 2026, but recent developments suggest an earlier shutdown.
This decision comes amidst a series of closures in the oil industry. Chevron Oil Company relocated to Houston, Texas, and Phillips 66 began shutting down its Los Angeles refinery in October 2025. Oil experts had predicted an earlier closure for Valero, and gas prices were already rising.
In April 2025, Valero Energy Corporation announced its intention to exit California, incurring a $1.1 billion write-off charge related to asset impairments. This followed a notice to the California Energy Commission (CEC) to 'idle, restructure, or cease refining operations' by April 2026. California Governor Gavin Newsom's response was criticized for its tone, as he claimed credit for Valero's responsible planning, despite his policies causing harm to the oil and gas industry.
Newsom's 'clean energy all-electric future' with a ban on internal combustion engine autos has been linked to the industry's struggles. The national average gas price is $2.89, while California's average is $4.25, and it is expected to rise further. Governor Newsom's energy policies are under scrutiny for sabotaging domestic refining capacity and threatening U.S. military force readiness on the West Coast.
A report by California Assemblyman Stan Ellis, USC Professor Michael Mische, and petroleum expert Michael Ariza highlighted the potential impact on the U.S. military and the need for federal intervention. Ariza explained that the early closure of Valero's Benicia refinery, initially scheduled for April 2026, was accelerated due to the Phillips 66 refinery shutdown in Wilmington.
The closure of refineries, including Valero's, is expected to lead to job losses and economic consequences. California's oil and gas industry provides 536,770 jobs and contributes $338 billion to the state's economy. The state's reliance on imported oil has increased significantly, with imports accounting for over 70% of the oil consumed in 2020, up from 4.5% in 1988.
The situation has prompted Nevada Governor Joe Lombardo to establish a Fuel Resiliency Committee, as Arizona and Nevada heavily depend on California for gas supply. California's energy policies are facing criticism for their potential negative impact on the state's economy and national security.
