California lawmakers could bail out Bay Area oil refinery to stave off closure

California could pay hundreds of millions of dollars to cover maintenance costs at Valero Energy Co.’s refinery in Benicia in an effort to stave off the plant’s closure, according to Bloomberg. 

The outlet reported Tuesday that California legislators are in talks to spend between $80 million and $200 million in state funds on the facility, which was built in 1968 and is the sixth-largest refinery in California. 

Valero, which is headquartered in San Antonio, said in April that it was considering closing the plant, six months after state and local regulators handed it a record-setting fine for unlawful toxic emissions. Benicia leaders were reeling from the prospect of losing the top employer in their city of 26,000.

California has a limited number of refineries, and closing one can impact prices at the pump.

One forecast from the University of Southern California Marshall School of Business, published in May, says gas prices could go to nearly $8 a gallon if the Benicia plant and another refinery, Phillips 66 in Los Angeles, both close. The Phillips plant may go offline around the fourth quarter of this year, according to Reuters. 

Bloomberg reports that lawmakers are keen on keeping the Benicia refinery open, and had discussions over the weekend about a cash infusion from the state for maintenance and upgrades.

The talks suggest a softening by Democrats on the issue of oil.  have been critical of the oil industry for allegedly price-gouging customers -– accusations the industry has denied — and for the pollution they cause. Lawmakers are now hoping to keep the industry alive in California in an effort to keep gas prices from skyrocketing, even as the state presses forward with its planned transition to electric vehicles.