California faces tightening petroleum supply as Valero plans exit and Phillips 66 closes refinery

California's Assembly Utilities and Energy Committee convened on May 28, 2025, to address critical issues surrounding the state's petroleum supply and the implications of upcoming refinery closures. The meeting highlighted concerns over California's reliance on imported petroleum products, particularly as local refineries like Phillips 66 and Valero prepare to cease operations.

Assemblymember Gibson raised significant points regarding the ethical implications of sourcing petroleum from countries lacking robust human rights protections. He emphasized the need for California to consider the moral ramifications of its energy imports while ensuring that residents who depend on petroleum vehicles can maintain their daily commutes.

In response, officials outlined a strategy to manage the impending supply challenges. Phillips 66 plans to transition to a product terminal strategy, which involves importing necessary volumes through marine terminals. This shift is expected to increase the demand for imports in Southern California, where the refining capacity is already under pressure.

The discussion also touched on the unique challenges faced by Northern California, where only three refineries currently operate. With Valero's announced exit from the state, officials acknowledged that the supply situation would become increasingly strained. The committee noted that the only viable solution for maintaining supply in the North would be to ramp up imports, which could lead to heightened emissions from increased marine traffic.

The meeting underscored the urgent need for a comprehensive approach to California's energy supply, balancing ethical considerations with practical solutions to ensure that residents can continue to access the fuel they need. As the state navigates these challenges, the implications for air quality and energy independence remain critical focal points for future discussions.