California’s Senate Republicans have sent a letter to the governor urging he call an emergency special session of the legislature immediately to deal with the fallout to Californians and the state’s economy of the impending closure of Valero’s Benicia refinery in April. This will be the second refinery to shut down operations in California within the past six months.
“California’s high cost of living is out of control, look no further than the gas pump. We routinely pay the highest gas prices in the nation,” said Senator Marie Alvarado-Gil (R-Jackson). “The governor and legislative Democrats talk about ‘affordability,’ but make no mistake: they own this crisis. If they’re actually serious about bringing costs down, they should start by undoing their own policies that put us in this bind.”
Valero’s Benicia refinery is one of the largest in Northern California, providing almost 10% of the state’s total refining capacity. Combined, the shuttered Phillips 66 refinery in Los Angeles and Valero’s in-the-process-of-shuttering refinery in Benicia produced about 20% of California’s gasoline supply. Their closures will tighten fuel markets, threaten supply lines, and increase prices at the pump, as California will have to rely more heavily on imports and alternative sources to meet demand.
“While gas prices are falling across much of the nation, California’s gas prices remain consistently high. Those high gas prices drive up the cost of goods and services across the board, making everyday life more expensive. In fact, Governor Newsom and Democratic lawmakers have created an affordability crisis," said Senator Tony Strickland (R-Huntington Beach). "This affordability crisis is one of the key reasons California is losing more residents than it is gaining for the first time since the Gold Rush. Democrats’ policies are no longer harming only California. They’re spilling over into neighboring states and impacting the entire nation. That is why the Legislature must call a special session to address restrictive oil and gas policies."
Phillips 66 stated the reason for closing its Los Angeles refinery was that its long-term sustainability was “uncertain and affected by market dynamics.” Valero has cited regulatory pressures and a challenging operational environment as the underlying reasons for closing its refinery. The translation of both: It’s impossible to continue doing business in California.