There are very few states in this marvelous union of ours that were so naturally blessed from the beginning with damn near everything necessary for human existence as to render it paradise. Temperate weather, abundant resources of both fuel and food, or the climate and terroir in which to grow a multitude of bounty. Every last venue is touched with a glorious landscape, from mountains in the distance, or actually being in the mountains, mighty Pacific waves crashing onshore, the inland empire’s serene, endless skies, the beautiful, wild cascading rivers, or the desert’s brilliant mornings, quirky inhabitants, and glowing, stunning sunsets.
California was it. So many dreams of the place spurred migration west, for one adventure or chasing one reimagined future after another. The making of a fortune or simply a fortunate life. Prospecting for gold or golden years.
The oil pioneers who came there chasing their own form of lucre in the late 1860s sank the first oil well in 1865. The first gusher in 1877 led to a boom that brought California into the forefront of the oil industry by 1903, when it became the number one oil-producing state in the country.
The introduction of voluminous amounts of California-produced crude dropped oil prices across the country. Contrary to a certain, smugly self-satisfied president’s assertion, they did most certainly ‘drill their way out of it’ – even back then. Amazing what supply can do.
…The discovery of oil in California had a significant impact on the price of oil—both in the state of California and across America. In 1860, 0.5 million barrels of oil were produced throughout the country. By 1895, the state of California, alone, produced 1.2 million barrels of oil.[17] With the new oil supplies from California—along with increased oil production in Texas and Pennsylvania—the price decreased from $9.60 per barrel in 1860 to $0.25 per barrel in 1895.[18]
American oil companies including Union Oil Company became concerned with this development because oil prices had fallen too low for oil companies to maintain high profit margins. Union Oil Company and other oil companies lobbied local and federal governments to regulate the overproduction in the oil market.[19] Their attempts were futile, however, and no regulation was passed. Oil prices remained around $1 through the end of the 19th century.[18]
Things aren’t so rosy now in the state, and it’s not for lack of oil below-ground, as I’ve posted on time and again.
That abundant natural resource is still available, but unloved – demonized nearly out of existence, in fact. The companies that drill the crude, that transport it through pipelines, and those that refine it and sell it at retail have all been under unrelenting attack for decades from the environmental lobby in the state. But never more so than during the eight rapacious, regulatory-mad years of the Newsom gubernatorial regime.
According to a new report from three distinguished and concerned California resident experts on the subject, the state of CA’s fossil fuel industry is so dire, it is, as the California Globe’s magnificent editor Katy Grimes puts it, quite possibly ‘near the point of no return.’
…California Governor Gavin Newsom is presiding over perhaps the largest energy policy collapse of the oil industry, refinery operations and gasoline production in U.S. history. A momentous report recently prepared by Ellis, Mische and Ariza warned that California’s self-inflicted gas crisis is also a direct threat to U.S. military force readiness on the West Coast, the Globe reported in October.
Their report exposes how Governor Newsom’s energy policies are sabotaging domestic refining capacity and leaving U.S. military bases in the West vulnerable to foreign adversaries like Russia and China.
Their conclusion is that there must be federal intervention.
The report, prepared by California Assemblyman Stan Ellis, USC Professor Michael Mische, and petroleum expert Michael Ariza, catalogues Newsom and the legislature’s step-by-step dismantling of the entire CA fossil fuel industry, but also highlights with terrifying clarity the consequences of the policies. Without CA’s oil and gas industry, the California that exists today would be impossible.
…Arguably, California has the most severe restrictions regulating the oil, refining, and fuels industries in the world. California’s energy policies and regulations have not only resulted in the highest gasoline prices in the nation, and the highest taxes and fees in the nation but have led to the closure of two major refineries which now threaten essential pipelines that provide crude oil and fuel supplies to California’s surviving refineries, civilian markets, and military installations, as well as those in Arizona and Neveda.
The oil and gasoline industries in California account for around 8% of the state’s GDP…but it is, critically, the first 8% of its overall GDP. Without oil and gasoline, the other 92% would be impossible to attain. Without petroleum, asphalt can’t be made, and steel cannot be produced. Even in a state as environmentally conscious as California, fossil fuels still generate around 40% of all electricity. Without that 40%, there would be no Silicon Valley. Without gasoline and diesel fuels, California agricultural production would be a fraction of what it is today.
California was once a leading producer and exporter of oil and crude oil products in the world. Much of California’s 20th-century economy was predicated on oil and gasoline production, which, in turn, provided the fuel to support its population growth, agricultural production, the defense industry, and later, the tech industries. Today, California is far from self-sufficient with respect to its energy needs. The state produces less than 23% of its own in-state petroleum needs, and imports over 65% of its crude oil from non-U.S. foreign sources, the largest of which was Iraq over the recent years.
It lays out not just how the California consumer will be affected, but also how military readiness on the West Coast will be adversely impacted, and details how the fates of neighboring states Nevada and Arizona are tied to the availability of gasoline supplies from California.
…Arizona gets nearly half of its gas from California. And the vast majority of Nevada’s gas – 88% – comes from California
As I’ve said, I’ve posted repeatedly about the refinery closings. In particular, the announced closing of the Valero Benicia refinery, which has sent Newsom into a panic, looking for a buyer as he belatedly realized he’d shot himself in the proverbial foot. They had come up empty as of September’s mad scramble for a patsy to take over, even being so desperate as to contemplate a state takeover of the facility.
California is learning that actions have consequences.
“In rare move, California steps in to find buyer for Valero refinery to avoid closure, sources say”
While the state works day in and day out to destroy oil and gas companies, CA will now have to deal with the consequences… pic.twitter.com/neyu6T07l3
— Steve Guest (@SteveGuest) July 24, 2025
Hugo Newsom, or Gavin Chavez – pick your poison, it all sucks.
No worries, though. There were no buyers waiting in line, and Valero was all set to pull the plug this coming April.
According to what Mr Ariza told Katy Grimes, that is going to happen sooner rather than later, apparently.
Um…yikes.
…Mike Ariza spoke with the Globe again last week with yet another dire warning – that California may have already hit the point of no return.
Ariza told the Globe that Valero, which announced in April 2025 that it would be shutting down its Benicia refinery in April 2026, has bumped the closure date up to January. Ariza explains why:
“The Phillips 66 refinery in Wilmington shut down on October 17th is taking 140,000 barrels per day of crude oil refining offline. Originally Valero in Benicia was slated to shut down in April of 2026. However, given the fact that they cancelled their crude oil contracts over six weeks ago it looks like they will be shutting down no later than January of 2026, four months ahead of schedule.
Now, in 2025, Valero is not even seeking to try and sell the refinery. Even after the state tried to convince Valero to remain open, they elected to shut down. And instead of shutting down in April, they have moved the shutdown ahead to January. All due to the state’s egregious regulations and unprecedented unjustified fines.”
Ariza said when refineries shut down, more Californians will leave the state. California’s oil and gas industry provides 536,770 total jobs in California and 148,140 Californians are directly employed by its individual companies—along with the $338 billion total economic contribution to California’s economy.
He explained in more detail in an updated statement he shared:
“At this point we will be importing nearly half (50%) of our gasoline and 40% of our jet fuel from overseas. This is unprecedented in our country’s history. This leaves both us and our military at extreme risk to multiple events. Many of these have occurred just within the past 8 weeks.
The ‘events’ he’s referring to are the everyday hazards of depending on and receiving fuel by ocean-going transport and the regular interruptions of the refining business – fires, oil-tanker seizures or hijackings, leak repairs, etc,
Another fly in the ointment is a major crude pipeline into Northern California shutting down because its operators are losing $2M a month. Crimson Midstream bought the San Pablo Bay Pipeline from Shell in 2018, and they are hurting puppies right now. If the state doesn’t approve an immediate rate increase for what they can charge, they’re simply going to turn it off. This would, in turn, force the refineries to turn to ocean-going crude deliveries.
California’s largest inland oil pipeline is in danger of closing within months without state approval for a rate increase and other measures, a shutdown that would choke off some crude supplies to at least two San Francisco-area refiners.
Crimson Midstream LLC’s San Pablo Bay Pipeline that hauls oil from the Bakersfield area to Northern California refiners is losing $2 million a month, creating “severe financial distress” for the company, Robert Waldron, CEO of Crimson’s parent CorEngery Infrastructure Trust, wrote in a letter to Governor Gavin Newsom’s office this week.
…Any interruption in San Pablo Bay Pipeline shipments would likely force Bay Area refiners to resort to more imports of ocean-borne crude, Waldron warned. Crimson is seeking a 37% increase in the fees it can charge to crude shippers, a temporary $3.75-a-barrel tariff hike, and other measures.
…California crude output has fallen by more than 70% in the past four decades as fields first tapped in the early 20th century began to run dry, competition increased from lower-cost sources, and some of the nation’s strictest environmental rules piled on costs. Newsom is seeking to make it easier for inland drillers to obtain permits and boost oil output, while further restricting offshore crude production.
Assemblyman Ellis addressed the national security implications of Newsom’s disastrous policies when he told the Globe:
…Assemblyman Ellis said in an interview with the Globe that California military bases could end up running out of jet and aviation fuels should a military conflict unfold.
Why? Because of Governor Newsom’s political policies resulting in shockingly detrimental and lethal regulations of the oil and gas industry.
“California has no inbound pipelines supplying crude oil, gasoline, or aviation fuels, which amplifies U.S. national security vulnerabilities. Astonishingly, over 95% of California’s inbound crude and gasoline supplies are delivered by maritime tankers, the majority of which are not U.S.-flagged vessels, including tanker ships owned by Russia’s SCF Group and China’s Cosco Shipping Energy Transportation,” Ellis told the Globe.
Remember this. California is doing business with Russia and China.
…Despite being the largest state in the Union and the 4th largest economy in the world, California has no inbound pipelines supplying crude oil, gasoline, or aviation fuels, which amplifies U.S. national security vulnerabilities. Astonishingly, over 95% of California’s inbound crude and gasoline supplies are delivered by maritime tankers, the majority of which are not U.S.-flagged vessels, including tanker ships owned by Russia’s SCF Group and China’s Cosco Shipping Energy Transportation.
In 1991, there were over 40 refineries in California. As of October 16, 2025, there are eight refineries operating in California with a combined processing capacity of 1.467 million barrels of crude oil daily. That’s down 68% in the number of refineries since 1991. As Chevron President Andy Walz recently noted in a Fox Business interview, “I think it’s been a tyranny of about 25 years to get the refining business to leave California.” Consequently, it was not, as some California politicians and agency “experts” assert, that it was by intentional desire or some industry conspiracy that created industry concentration and reduced the number of refineries in the state; it was state regulations and policies that drove the refiners out.
By April 2026, there will only be seven refineries surviving in California as a result of the two most recent refinery closures (Phillips 66 and Valero). In-state gasoline production will be reduced by at least 6.2 million gallons a day, with progressively worse-case estimates totaling 9.33 million gallons a day. In addition, jet fuel production from Valero will drop by 600,000 gallons a day. By 2035, California refinery production could decline by 35% or more, placing greater pressure on shrinking supplies, increasing consumer prices past $8.00 a gallon, and forcing greater dependency on non-U.S. suppliers for fuels and crude oils and foreign shippers.
Phillips 66 is proposing an entirely new gasoline pipeline running into California – the first of its kind. If approved, it wouldn’t come online until 2029.
California has long been a “fuel island” — a state whose gasoline and diesel markets are isolated from the rest of the country — but that could soon end under a proposed plan to build the first-ever pipeline to bring refined products directly to the West Coast.
Known as the Western Gateway Pipeline, the project from oil major Phillips 66 and global pipeline giant Kinder Morgan would deliver gasoline, diesel and jet fuel to Arizona and California from as far east as Missouri by 2029. The companies are currently scoping out demand and seeking commitments from customers in what is known as an “open season.”
Good luck with that, is all I can say.
We import oil from countries with worse environmental standards, ship it across the ocean, burn more fuel doing it — and call it “green”?
Drill in California.
Cleaner. Closer. Smarter. pic.twitter.com/bO2FjQJjVO— Piccinini4Congress (@Piccinini4C) November 25, 2025
Grimes, bless her heart, is hoping against hope that the Trump administration can pull a rabbit out of its interventionalist hat and save the state from its evil overseers.
I don’t see anything changing any time soon.
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