HEADLINE: “From Refineries to Fiefdoms: Is Newsom Orchestrating a State Takeover of California’s Oil Industry?” By Charles Rotter
“California’s refining capacity is collapsing—not because demand has disappeared, but because it is being deliberately dismantled by regulatory fiat.”
From Refineries to Fiefdoms: Is Newsom Orchestrating a State Takeover of California’s Oil Industry?, By Charles Rotter
California’s refining capacity is collapsing—not because demand has disappeared, but because it is being deliberately dismantled by regulatory fiat. The recent announcement that Valero Energy will idle or shutter its Benicia refinery by 2026 isn’t just a business decision. It’s the calculated result of a hostile policy environment designed to punish traditional energy producers until they either leave the state or fall into government hands.
Welcome to Newsom’s California, where economic sabotage is spun as environmental justice—and where, quietly but unmistakably, a roadmap is being laid for state-controlled oil infrastructure.
The Valero Withdrawal: Death by a Thousand Regulations
The Benicia refinery, a cornerstone of Northern California’s fuel supply, processes 145,000 barrels of crude oil per day. It’s taken a direct financial hit from California’s mounting anti-oil regulations, including:
A $1.1 billion impairment charge—a warning siren about future profitability.
An $82 million air-quality fine, despite the facility operating under existing permits.
New laws like SBX 1-2, which micromanage fuel inventory, pricing, and even resupply logistics.
These policies are not regulatory oversight—they are operational quicksand. The message is clear: if you’re not making biofuel, you’re not welcome.
Not Just a Shutdown—A Strategic Vacuum
Valero’s exit will eliminate 9% of the state’s refining capacity, triggering ripple effects that Californians will feel directly at the pump. More importantly, the loss of this capacity reduces supply security, amplifies price volatility, and cements California’s growing dependency on foreign imports of refined fuels—a logistical and geopolitical disaster in the making.
Yet Governor Newsom appears unbothered. That’s because this isn’t about fuel security or emissions. It’s about control.
The Smoking Gun: California’s Blueprint for State-Owned Refineries
Buried in the California Energy Commission’s May 2024 Draft Transportation Fuels Assessment is an eye-popping section outlining “highly complex implementation policies” for managing gasoline supply. Among these is a plan for state-owned refineries, described in detail as a fallback option in the event of market “failures.”
Let that sink in.
The state that has spent years making it economically impossible to operate a private refinery now wants to create its own. The very same report recognizes that refineries are shutting down not because demand has disappeared—it hasn’t—but because state policy has made it uneconomical to continue operations.
The report openly discusses how “as demand for gasoline shrinks, refineries may close or convert to processing clean transportation fuels.” But here’s the kicker: the decline in demand is slow and uneven, while supply shocks—thanks to abrupt closures—are “lumpy,” causing instability and risk. The document then lists state takeover scenarios as a solution to this instability.
In other words: destabilize the industry, then nationalize it.
Fewer Choices, Higher Prices, and One Owner
This isn’t a conspiracy theory. It’s policy, in writing, from the California Energy Commission. State officials are laying the groundwork to replace a functioning, competitive fuel market with a government-run enterprise. Think DMV meets gas pump.
And what about the consequences?
Soaring fuel prices.
Massive job losses in refining, transport, and supply chains.
Crippling tax revenue loss for local communities like Benicia.
Increased emissions from imported fuels and marine transport.
Higher risks of supply shortages due to bureaucratic mismanagement.
All justified in the name of climate “equity.”
A Power Grab Disguised as Progress
This is not about climate. It’s not even about cleaner air—California’s emissions from transportation fuels are already among the lowest in the nation thanks to past technological improvements. This is about power—concentrated, centralized, and entirely unaccountable.
Gavin Newsom and his allies want to run California’s fuel infrastructure from Sacramento. They want a state monopoly on the means of energy production. If private operators won’t dance to the state’s tune, they’ll be fined, sued, and regulated into oblivion.
And then—when the last private operator gives up—Newsom will declare a crisis and “reluctantly” take over to “protect the public.”
Valero’s Exit Isn’t the End—It’s the Beginning
What’s happening in Benicia is a case study in economic expropriation by regulatory warfare. The goal is not to clean the air—it’s to seize the refinery. Newsom and his bureaucrats have written the playbook, and they’re not hiding it.
The only thing standing between Californians and $10 gasoline—rational policy, free enterprise, and informed resistance—is rapidly disappearing.
This isn’t just bad governance. It’s ideological colonization under the banner of sustainability.
H/T @houmanhemmati
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BOTTOMLINE: “What’s happening in Benicia is a case study in economic expropriation by regulatory warfare. The goal is not to clean the air—it’s to seize the refinery. Newsom and his bureaucrats have written the playbook, and they’re not hiding it.”