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<\/figure>\n\n\n\nBy I & I Editorial Board<\/p>\n\n\n\n
It wasn\u2019t long ago that a California governor made it clear that oil refineries were not welcome in his state. Then another California governor asked regulators to loosen the chains on refineries to ensure that they will be profitable and remain in the state that every day burns an enormous volume of gasoline.<\/p>\n\n\n\n
Actually, it is the same governor, one who has turned his attention from playing to his hard-left, blue-state constituency to shifting toward the middle for a 2028 White House run.<\/p>\n\n\n\n
It was just last summer when Gov. Gavin Newsom announced a \u201cplan to prevent Big Oil \u2018profit spikes<\/a>\u2019\u201d that would also \u201csave Californians money at the pump.\u201d He groused about refiners \u201cplaying games to earn even more profits\u201d and vowed to force them to \u201cact responsibly.\u201d<\/p>\n\n\n\n Two months later, he signed a bill that is intended to limit \u201chigher profits for the industry.\u201d Within hours, Phillips 66 said that it was closing its Los Angeles refinery complex.<\/p>\n\n\n\n \u201cWithout actually using the words, the company is saying there\u2019s no reason to stick around and be abused<\/a>,\u201d the Pacific Research Institute said last fall.<\/p>\n\n\n\n Then, earlier this year, PRI pointed out that \u201cCalifornia is literally running out of oil refineries<\/a>.\u201d<\/p>\n\n\n\n \u201cPhillips 66 announced it was closing its Los Angeles refinery complex in 2025. It will be the fourth refinery shut down in the state since 2020. At that point, there will be only a dozen refineries left<\/a> to produce the 38 million gallons<\/a> of California\u2019s boutique blend \u2013 which is not made anywhere else, costs more than conventional gasoline, and requires oil companies to invest billions to upgrade their systems to make \u2013 that\u2019s consumed daily.\u201d<\/p>\n\n\n\n Or it could be only 14. Valero is likely to close its California refinery next year.<\/a><\/p>\n\n\n\n Mission accomplished. Then the mission changed. Now, Newsom is asking regulators to do what they can to keep oil refineries open.<\/p>\n\n\n\n In a letter to California Energy Commission Vice Chairman Siva Gunda, sent days after Valero\u2019s announcement, the governor asked the agency to \u201credouble the state\u2019s efforts to work closely with refiners,\u201d and to ensure that \u201crefiners continue to see the value in serving the California market, even as demand for fossil fuels continues its gradual decline over the coming decades.\u201d<\/p>\n\n\n\n During an earnings call last week, Valero CEO Lane Riggs said \u201cCalifornia has been pursuing policies to move away from fossil fuels<\/a> 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.\u201d<\/p>\n\n\n\n Seems California voters who have given nearly unchecked power to Democrats for about two decades are getting it good and hard<\/a>. Newsom is trying to unwind some of the damage, primarily because he\u2019s lusting after the White House, but the briar patch of regulations will make it a difficult task.<\/p>\n\n\n\n There\u2019s a practical aspect, as well, to Newsom\u2019s shift: A California without oil refineries is a severely wounded state. The prices of refined crude products would rise, jobs would be lost (nearly 9,000 are directly employed at the state\u2019s refineries) and tax revenue (at 68 cents a gallon<\/a>, the state has the highest gasoline tax in the nation) would fall.<\/p>\n\n\n\n We would see logistical problems, too, since the 38 million gallons<\/a> of California\u2019s boutique blend that\u2019s consumed daily can\u2019t be shipped in like bottled water from Fiji. \u201cCalifornia effectively is an \u2018oil island<\/a>,\u2019 with no pipelines linking the state to other crude oil production and refining regions,\u201d says the Western States Petroleum Association.<\/p>\n\n\n\n The state could take over the facilities, and, in fact, this has been discussed<\/a>. But it wouldn\u2019t be a solution, since state control of the refineries might not be all that different from having no refineries at all.<\/p>\n\n\n\n Newsom recently bragged that California is now the fourth-largest economy in the world<\/a>. That\u2019s nice, but it won\u2019t last long if Sacramento\u2019s political war on oil and gas continues.<\/p>\n\n\n\n