Valero Announces it Will Shut Down Benicia Refinery April 2026

California Democrats’ war on the oil and gas industry is working, but not for the people.

In another blow to California’s oil and gas industry, and the state’s fuel; supply, Valero Energy Corporation announced Wednesday it will shut down its Benicia Refinery in April 2026.

This latest hit comes after Chevron Oil Company announced in August their corporate relocation to Houston Texas from the Bay Area, and Phillips 66 announced that its Los Angeles refinery will shut down by October 2025.

“Valero’s announcement that it will shut down its Benicia refinery in April 2026 is yet another blow to California’s already fragile fuel supply system,” the California Fuels & Convenience Alliance said. “The decision reflects the growing impact of California’s increasingly aggressive energy policies, which have made it more difficult for in-state refineries to continue operating. As a result, this closure will leave the state with just seven remaining in-state refineries capable of producing California’s uniquely formulated gasoline—a dangerously low number for a state of nearly 40 million residents.”

Assembly Republican Leader James Gallagher weighed in on X: “Good morning CA: another gas refinery is closing and our prices will shoot up even more! Totally predictable and you can thank @GavinNewsom and the Democratic politicians for their flawed policies.”

Valero’s notice continues:

“The Valero Refining Company-California has submitted notice to the California Energy Commission of its current intent to idle, restructure, or cease refining operations at Valero’s Benicia Refinery by the end of April 2026. Valero continues to evaluate strategic alternatives for its remaining operations in California. “We understand the impact that this may have on our employees, business partners, and community, and will continue to work with them through this period,” said Lane Riggs, Chairman, CEO and President of Valero.

In connection with the evaluation of strategic alternatives for Valero’s operations in California, a combined pre-tax impairment charge of $1.1 billion was recorded for the Benicia and Wilmington refineries, and is expected to be treated as a special item and excluded from first quarter 2025 adjusted earnings. Also included in this amount is the recognition of expected asset retirement obligations of $337 million as of March 31, 2025.

The oil and gas industry has taken one political hit after another with California’s Democrat Governor and Democrat supermajority in the State Legislature.

Gov. Newsom claims that the state’s highest-in-the-nation gas taxes and prices are not what cause dramatically spiking gas/oil prices but because of price gouging by the oil industry. In May 2024, Newsom even signed a gas price gouging law into place.

The California Energy Commission disagreed with the governor at the time, showing that gas price spikes occurred in the last few years because of refineries temporally going out of commission because not enough oil was getting to them.

But even as California’s own Chevron Oil Company announced in August their corporate relocation to Houston Texas from the Bay Area, where the company has been based since 1879, Newsom was pushing legislation which would clearly result in even higher gas prices at the pump? Again?

Chevron is just the latest big business to flee the Golden State. Notably, Chevron’s President Andy Walz said in a letter to the Legislature that of the 36 states in which they work, only California has the highest gas prices.

California Senator Scott Wiener (D-San Francisco) introduced a bill in February to hold “Big Oil” responsible for natural disasters in California. You read that right – Senator Wiener is blaming the oil and gas industry for natural disasters, or disasters that should have been mitigated by the State of California.

Wiener’s SB 222 stalled in the Judiciary Committee this month, but was allowed reconsideration and will be heard again.

Gov. Newsom has been agitating for some time against “Big Oil” and their “windfall profits,” but always leaves out his and Democrats’ important role in escalating oil and gas prices in California through regulations, surcharges, “clean-air” and “low carbon” programs, cap and trade and more schemes.

Gov. Newsom signed a package of “sweeping legislation” in September 2022 to achieve statewide carbon neutrality as soon as possible, and no later than 2045, by establishing an 85% emissions reduction target, capping oil wells, slowing oil and gas permitting, making it impossible to increase refining capacity, and entirely phasing out oil and gas starting in two years.

That “sweeping set of laws” Newsom touted was 40 new climate change bills regulating California businesses and its people.

As oil expert Dave Noerr told the Globe last year, “The growing difference between the price of crude oil and the retail cost of gas and diesel as well as the additional cost Californians pay compared to every bordering state and the rest of the U.S. is:

• The Sacramento surcharge
• The cost of California
• The growing of Government
• The Low Carbon Fuel Standard
• The Cap and Trade Program
• Vapor recycling requirements
• Data collection
• Air quality mandated equipment replacements”

Noerr added, “So California, the fact of the matter is, you are paying the same or less for the crude oil contained in a gallon of gas or diesel. You are just paying a lot more for government.”