California Shuts Refineries While Fuel Imports Surge

As California continues its regulatory push, causing in-state refineries to shut down, new plans emerge to import even more of the fuel the state still relies on. Bloomberg reports that Phillips 66 and Kinder Morgan will build a pipeline system to carry gasoline and other fuels into California, Arizona, and Nevada.

The new Western Gateway project includes a pipeline from Borger, Texas, to Phoenix and reverses flow on existing lines so fuel can move west instead of east. Some of that fuel would come from the Midwest, adding to supplies already arriving from Washington State and Asia.

This is happening as California refineries close or convert to produce renewable fuels. One of the latest is Phillips 66, now actively shutting down. As local refining disappears, the state becomes even more dependent on fuel shipped in from thousands of miles away.

California already spends $25 billion every year to import oil. How much more will we pay to import refined gasoline and diesel?

This shift means more than just higher fuel prices. It means lost jobs. Lost tax revenue. Lost control over the energy that powers California’s economy. While this may be good news for out-of-state refiners and fuel shippers, it is bad news for working Californians and anyone concerned with energy reliability.

The pipeline project will take a long time to obtain permits and approval to cross multiple states, but it serves as a reminder of California’s failed energy planning and the predictable reality of vilifying its energy industry.

Until our state leaders gain a true understanding of the costs and economic implications of shutting down the energy industry, the gap between energy policy and fuel demand in California will continue to grow and so will those gas prices.