XPost: alt.fan.rush-limbaugh, sac.politics, or.politics   
   XPost: seattle.politics, fl.politics   
   From: jfwaldby@gmail.com   
      
   a425couple wrote:   
   > Simply Amazing.   
   > State regulators think they can run a big refinery better   
   > that the industry experts.   
   >   
   > On 4/16/25 19:05, Democrat Run States Suck! wrote:   
   >> - With Valero announcing the pending closure of one of its two   
   >> remaining California refineries, the state will lose at least 18% of   
   >> its current refining capacity by the end of 2026.   
   >>   
   >> Because California is an “energy island,” meeting demand for   
   >> California and the parts of Nevada and Arizona that rely on its   
   >> refineries will require costly imports of volatile fuel by   
   >> emissions-heavy tanker ships.   
   >>   
   >> California Gov. Gavin Newsom has long blamed rising gas prices on   
   >> refiners’ “price gouging,” but even though his own administration has   
   >> said that it has no found no evidence of such, he called a special   
   >> legislative session last year to pass new refinery regulations that   
   >> both Democratic and Republican governors of neighboring states warned   
   >> would lead to price hikes and supply shortages.   
   >>   
   >> Now, with the closure announcement, the warnings from the energy   
   >> industry and regional leaders are coming to fruition.   
   >>   
   >> These new regulations empower the state to determine when refineries   
   >> are allowed to shut down for maintenance and set new inventory storage   
   >> requirements that would require refineries to build vast new storage   
   >> tanks to smooth out shortages.   
   >>   
   >> With the state’s ban on the sale of new gas-powered cars in 2035, new   
   >> refineries are not being built, leaving remaining refineries operating   
   >> at nearly 100% capacity at all times. As a result, outages at even a   
   >> single refinery result in spikes in gas prices.   
   >>   
   >> Arizona Gov. Katie Hobbs, a Democrat, and Nevada Gov. Joe Lombardo, a   
   >> Republican, sent a joint letter to Newsom urging him not to sign his   
   >> new refinery regulations into law, citing their fear that they would   
   >> lead to gasoline price spikes and shortages.   
   >>   
   >> “It is evident that increased regulatory burdens on refiners and   
   >> forced supply shortages will result in higher costs for consumers in   
   >> all of our states,” wrote Hobbs and Lombardo. “With both of our states   
   >> reliant on California pipelines for significant amounts of our fuel,   
   >> these looming cost increases and supply shortages are of tremendous   
   >> concern to Arizona and Nevada.”   
   >>   
   >> Chevron, the state’s largest refiner, warned against the regulations’   
   >> impact on gas prices, and costly shift to seaborne imports, which were   
   >> passed soon after it announced it was relocating its headquarters from   
   >> California to Texas.   
   >>   
   >> “We contend that enforcing a mandatory minimum inventory requirement   
   >> will likely result in two negative outcomes: an increased frequency   
   >> and duration of supply shortages, and a permanent rise in gasoline   
   >> prices for consumers,” wrote Chevron. “Marine traffic and capacity   
   >> face significant limitations currently and will encounter even more in   
   >> the future due to Jones Act tonnage available … Policy that reduces   
   >> in-state crude production will impact refiners' marine capacity.”   
   >>   
   >> Newsom’s director of the Division of Petroleum Market Oversight at the   
   >> California Energy Commission has said that because California is a   
   >> profitable area to run a refinery, that the regulations would have   
   >> little impact.   
   >>   
   >> “California is part of the most profitable area in the country,” said   
   >> Milder at a state hearing while the governor’s regulations were under   
   >> consideration. “There’s no reason that these companies cannot operate   
   >> fairly with a bit more inventory and still make profit and stay in   
   >> business."   
   >>   
   >> The string of recent closures suggest this is not the case.   
   >>   
   >> In March, Phillips 66 announced it is closing its Los Angeles   
   >> refinery, which refines 139,000 barrels of oil per day — 8.57% of   
   >> state refining capacity — by October.   
   >>   
   >> Soon after Newsom signed his regulations into law, Valero announced it   
   >> would be considering the closure of its two refineries in the state,   
   >> which process 230,000 barrels of oil per day, or 14.18% of the state’s   
   >> refining capacity.   
   >>   
   >> Now, Valero has announced that it is closing its Benicia refinery by   
   >> the end of April 2026 and that it is evaluating “strategic   
   >> alternatives for its remaining operations in California.”   
   >>   
   >> The Benicia refinery’s 145,000 barrels per day of capacity is 8.94% of   
   >> the state’s total. With the combined losses of the Los Angeles and   
   >> Benicia refineries, the state will lose 284,000 barrels per day, or   
   >> 17.41% of the state’s already-strained refining capacity.   
   >>   
   >> California’s current refining capacity is 1.62 million barrels of oil   
   >> per day, while its refineries use 1.4 million barrels of oil per day,   
   >> meaning it currently has a relative surplus of 220,000 barrels of   
   >> refining capacity per day, including its exports to Nevada and   
   >> Arizona. However, with overall oil consumption at 1.72 million gallons   
   >> per day, the state currently imports the difference.   
   >>   
   >> With the two closures, the state will have only 1.34 million barrels   
   >> per day of capacity, resulting in a 384,000 barrel per day, or 140   
   >> million barrels per year, necessitating the maritime imports   
   >> referenced by Chevron.   
   >>   
   >> Due to the Jones Act, shipping between U.S. ports must be done by U.S.   
   >> built and crewed ships in rare supply due to limited American   
   >> shipbuilding capacity. Congress found that in 2022, the United States   
   >> had just five oceangoing commercial ships under construction, while   
   >> China had 1,794. As a result, little maritime capacity exists to ship   
   >> fuel from American refineries in the Gulf Coast, where refining   
   >> capacity is plentiful, or from Washington state.   
   >>   
   >> Washington’s excess capacity allows it to also supply Oregon, which   
   >> has no refineries, but because it only refines a total of 246,200   
   >> barrels per day, cannot meet California’s growing shortfall.   
   >>   
   >> So long as the Jones Act is in effect. this means most California   
   >> replacement imports would have to be shipped across the ocean from   
   >> abroad, subjecting Californians to higher prices and greater price   
   >> volatility.   
   >>   
   >> Because California and the parts of Nevada and Arizona required to do   
   >> so use a special gasoline formulation specific to California, few   
   >> refineries outside of California have invested in the equipment to   
   >> produce the state’s fuel. This means few refiners are currently   
      
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