Newsom Shifts Tone on Oil Industry as California Refineries Close
Governor directs energy commission to work with refiners amid supply concerns
California Governor Gavin Newsom has directed the state's energy commission to collaborate more closely with oil refiners, marking what appears to be a shift in his administration's approach to the petroleum industry. The governor's letter to California Energy Commission Vice Chair Siva Gunda comes as two major refineries announced closures, with Valero shutting down its Benicia facility and Phillips 66 closing its Southern California operations. These closures represent nearly 18% of the state's crude oil refining capacity, raising concerns about fuel supply and pricing.
Newsom's letter emphasized ensuring Californians have access to transportation fuels in both the short and long term, while acknowledging the state's transition away from fossil fuels. The governor specifically called for making sure refiners "continue to see the value in serving the California market" and reinforcing "the State's openness to a collaborative relationship" with them. This language contrasts with Newsom's previous rhetoric, which included accusing oil companies of "lying and gouging Californians" when gas prices spiked above $6 per gallon in 2022 and 2023.
KEY POINTS
- •Newsom seeks collaboration with refiners
- •Two major CA refineries closing
- •Gas prices remain highest in nation
The petroleum industry has attributed refinery closures to California's regulatory environment and policies. Valero CEO Lane Riggs cited the state's "most stringent and difficult" regulatory framework as a factor in their decision to close operations. The Newsom administration has implemented several measures affecting the industry, including legislation creating oversight of petroleum markets, potential penalties for exceeding "maximum gross refining margins," and requirements for refineries to maintain minimum gasoline inventories to prevent price spikes.
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