California refineries face supply challenges as Phillips 66 and Valero exit market

The Assembly Utilities and Energy Committee convened on May 28, 2025, to address critical issues surrounding California's energy supply and the implications of refinery closures. The meeting highlighted concerns regarding the state's reliance on imported petroleum products and the potential impact on local consumers.

The discussion opened with Assemblymember Gibson raising alarms about California's increasing dependence on foreign countries for petroleum products. He emphasized that many of these countries lack the same human rights and environmental protections that California upholds. Gibson questioned how Californians could feel secure about using products sourced from regions with questionable practices, especially as local refineries like Phillips 66 and Valero prepare to close.

In response, representatives from the California Energy Commission (CEC) provided insights into the current state of petroleum supply. They confirmed that Phillips 66 plans to close its refining unit later this year but will implement a strategy to maintain supply through product terminals and imports. This strategy will involve bringing in petroleum from other refineries, particularly those located in the Gulf Coast, via marine transport.

The CEC representatives noted that while Southern California might experience a temporary increase in supply due to this import strategy, Northern California faces a more significant challenge. With only three operating refineries remaining and Valero's exit from the state, the supply in the North is expected to tighten considerably. The committee discussed the necessity of ensuring that petroleum products continue to flow from Southern to Northern California, primarily through marine transport.

Concerns were raised about the environmental implications of increasing vessel traffic to meet demand, as this could lead to higher emissions. The CEC acknowledged that while there are some controls in place, the emissions from these vessels remain a significant concern.

The meeting concluded with a call for strategic planning to address the anticipated supply challenges and to mitigate the environmental impacts associated with increased imports. The committee emphasized the need for ongoing discussions and actions to ensure that California's energy needs are met sustainably and responsibly.