California Seeks Buyer For Closing Refinery Amidst Fuel Shortage

California set out to be the nation’s leader in the energy transition, but it isn’t going quite as planned.

In October, Phillips 66 announced it was closing down its Los Angeles-area refinery, which analysts say was the result of the state’s hostility toward its oil industry. Then in April, Valero announced it would cease operations at its San Francisco-area refinery in April 2026.

Facing serious shortfalls of gasoline, jet fuel and diesel, the state is now hoping to broker a deal for a buyer to take over the Valero refinery, Reuters reported, so that it may keep the facility running. The California Energy Commission (CEC) wouldn’t confirm its engaging buyers directly, but it did confirm to Reuters that it’s trying to keep the facility open.

University of Southern California professor Michael Mische told Just the News that California Gov. Gavin Newsom, a Democrat, and the state’s legislature weren’t quite prepared for one refinery shutting down. With a second refinery closing and possibly more to follow, the state may be starting to consider the possibility that petroleum might not be as dispensable as they thought. The state’s Assembly has been in Democratic hands since 1970, and the Senate has been under Democratic control since 1975.

“Two refineries shutting down? That gets everybody’s attention, but if you have a third that is, that is something that’s very, very difficult to deal with,” Mische said.

While the state’s energy policies hit its drivers with some of the highest gasoline prices in the country, the impacts spread well beyond the state’s borders. California is home to 41 military bases. In 2019, California consumed nearly 17% of the nation’s jet fuel, and its nine international airports serve travelers all across the U.S. According to Mische, California also supplies Nevada with 88% of its gasoline and nearly half of Arizona’s, and it also supplies those states’ military bases with their transportation fuels.