Major California Oil Pipeline Faces Shutdown, Threatening Refinery Supply

California’s largest inland crude oil pipeline may soon shut down, raising alarms over the state’s energy security and threatening to increase reliance on imported oil.

According to Bloomberg.com, Crimson Midstream LLC’s San Pablo Bay Pipeline, which delivers crude from Kern County oil fields to Bay Area refineries, is reportedly losing nearly $2 million a month. The company has warned regulators and Governor Gavin Newsom’s office that without swift approval of higher transportation rates, the pipeline could be forced to close within months.

The pipeline is a critical link in California’s supply chain, moving locally produced crude to refineries that supply Northern California drivers. Its closure would leave refiners scrambling to source more ocean-borne imports, a shift that would raise costs, add strain to shipping facilities, and further weaken California’s already fragile domestic production base.

Bay Area refineries are among those most at risk. If the line is shut, they will need to retool sourcing strategies to rely more heavily on foreign barrels, an outcome that could ripple down to consumers in the form of higher fuel prices.

“This is exactly the type of infrastructure California must preserve if it wants to maintain affordable, reliable energy,” one industry analyst noted. “Closing it would deepen our dependence on foreign oil and jeopardize refinery stability.”

Crimson’s parent company, CorEnergy Infrastructure Trust, has told regulators that the losses have created “severe financial distress.” The company is asking for regulatory relief through rate adjustments. Governor Newsom’s office has confirmed it has received correspondence outlining the situation.

For oil producers, the stakes are high. California already imports more than 70 percent of its crude from overseas. Losing the San Pablo Bay Pipeline would cut one of the few remaining arteries connecting in-state production to refining centers.

CIPA CEO Rock Zierman underscored the urgency, stating, “This pipeline is a lifeline for California consumers and independent producers alike. Shutting it down would force the state to import even more foreign crude at higher cost, under weaker environmental standards. Keeping this infrastructure open is about protecting California jobs, stabilizing gas prices, and ensuring energy security for families up and down the state.”

Environmental groups may see the potential shutdown as a victory against fossil fuel infrastructure, but the practical consequences are clear: more tankers in California’s ports, more emissions from maritime shipping, and less use of local crude produced under the world’s strictest regulations.

CIPA will continue monitoring the situation closely, urging state leaders to keep the pipeline operating. Preserving the San Pablo Bay line is not only about supporting California’s independent producers; it’s about protecting consumers, jobs, and the stability of the state’s energy system.