California’s self-inflicted energy crisis just took another dramatic turn. The state’s punitive regulatory policies have forced one of the country’s largest oil refiners to abandon ship, and motorists are about to feel the sting.
Valero, a major U.S. oil giant, has taken a staggering $1.1 billion hit to shutter its Benicia refinery rather than continue operating under what it describes as an “unworkable” California regulatory regime. That’s billion with a “b.” When a Fortune 500 company chooses a multibillion-dollar loss over staying in your state, it’s a clear sign something is seriously broken.
Back in April 2025, Valero announced it would “idle, restructure, or cease refining operations” at Benicia by April 2026.¹ The refinery processes 145,000 barrels of oil per day, accounting for roughly 8.6% of California’s total gasoline production—a massive chunk of the state’s energy supply.
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