California Gov. Gavin Newsom listens to community leaders speak during a press conference at Controlled Thermal Resources "Hell's Kitchen" geothermal and lithium drill site in Calipatria, Calif., on Monday, March 20, 2023. Governor Newsom Tours Lithium Valley 5638
Sacramento, California – In response to growing concerns over fuel availability and refinery closures, California Governor Gavin Newsom has directed state officials to intensify efforts to maintain a reliable fuel supply, even as the state moves toward a greener energy future.
In a letter dated April 21 and obtained by Reuters, Newsom instructed California Energy Commission (CEC) Vice Chair Siva Gunda to strengthen coordination with oil refiners following Valero Energy’s announcement that it will idle or restructure its Benicia refinery by April 2026. The facility accounts for roughly 9% of California’s crude oil refining capacity.
“I write to direct you to redouble the State’s efforts to work closely with refiners on short- and long-term planning… to help ensure that Californians continue to have access to a safe, affordable, and reliable supply of transportation fuels,” Newsom wrote.
The governor acknowledged that gasoline demand is slowly declining, but emphasized that fossil fuel consumption will persist for years. He also set a July 1 deadline for the CEC to recommend changes to California’s fuel supply management strategy.
Valero’s decision will reduce the number of active refineries in California to just seven by 2026 — down from 20 in 2000 — sparking debate over the role state policy has played in the industry’s decline.
Refiners argue California’s aggressive climate policies, including cap-and-trade rules and the planned 2035 ban on gas-powered vehicles, have made it increasingly difficult to operate in the state. Critics, including oil industry representatives and conservative groups, claim that these policies have led to refinery closures, job losses, and soaring gas prices — with California currently leading the nation in average per-gallon costs.
“Governor Newsom’s letter is a blatant attempt to cover his backside,” said Chet Thompson, CEO of the American Fuel & Petrochemical Manufacturers. “State policies, not federal ones, are why fuel manufacturers struggle in California.”
Others, like Chevron executive Andy Walz, have pointed to California’s regulatory environment as a reason for relocating business operations.
Still, Newsom maintains that recent refinery shutdowns, including LyondellBasell’s in Texas, signal a national trend, not a uniquely Californian problem. He also blamed former President Trump’s trade policies for market instability.
As the state moves toward its clean energy goals, Newsom hopes to keep fuel supplies stable while convincing refiners that California remains a profitable — albeit challenging — place to do business.
