California Tries to Save Valero Refinery

Last week Reuters reported that, in a rare move, California state officials are actively trying to broker the sale of Valero Energy’s Benicia refinery to avoid its planned closure in 2026.

This intervention by the California Energy Commission (CEC) marks a significant shift. For years, state policy has focused on eliminating the fossil fuel industry, but with the highest gas prices in the nation and affordability dominating the polls, California state officials are working behind the scenes to keep refineries like Benicia operating.

According to Reuters, the CEC has approached HF Sinclair and other potential buyers, including parties with experience operating under Europe’s environmental standards.

Why the urgency?

Between Valero’s Benicia plant and the recently announced closure of Phillips 66’s Los Angeles-area refinery, California will lose roughly 17% of its in-state gasoline production.