California reverses course on fossil fuels as refinery shutdowns endanger the state’s gasoline supply
California Gov. Gavin Newsom, facing the planned closure of two major oil refineries, is courting drillers and postponing profit caps to keep gasoline flowing and prices in check.
Alex Nieves reports for POLITICO.
In short:
- Phillips 66 will close its Los Angeles–area refinery in late 2025 and Valero will shutter its Bay Area plant in 2026, eliminating about one-fifth of California’s gasoline refining capacity.
- Newsom, who once championed a profits cap and drilling setbacks, is now drafting legislation to speed permits for new wells in Kern County and offer incentives that keep existing refineries solvent.
- Democrats fear higher pump prices could hurt them in the 2026 midterms, echoing voter backlash that helped re-elect President Donald Trump.
Key quote:
“The reality is, if those refineries close and we have increased gas prices, it’s going to be a problem for everybody.”
— Andrew Acosta, California Democratic campaign consultant
Why this matters:
California’s ambitious climate targets collide with a structural vulnerability: The state is a “fuel island,” cut off from interstate pipelines and reliant on its own aging refineries for nearly all gasoline. When even one plant goes dark, supply tightens and prices leap — often topping $5 a gallon — undercutting public support for the clean energy transition. The sudden exits by Phillips 66 and Valero expose how a handful of companies wield outsized market power, and how quickly political rhetoric can swing when voters feel the pinch. As Newsom scrambles to plug the gap with new drilling permits, environmental justice groups warn that low-income communities near wells and refineries will bear the pollution burden, even as the broader climate fight stalls.
Related: Gov. Newsom vetoes California bill to increase refinery air monitoring
