Tag Archives: Just Transition

Benicia CA, Just transition, Valero Benicia Refinery, Valero Energy Corporation

Valero Confirms Benicia Refinery Closure Amid Tough Regulations

“Our current intent is to close the refinery,” Rich Walsh, executive vice president at Valero, said during a call with analysts.

Reuters,  By Nicole Jao, April 24, 2025

NEW YORK, April 24 (Reuters) – Valero Energy (VLO.N), on Thursday said it would cease operations at its 170,000-barrel-per-day San Francisco-area oil refinery next year amid worries about California’s declining fuel supplies and high gasoline prices.

The decision clarifies plans for the Benicia refinery after the San Antonio, Texas-based refiner last week announced its intent to “idle, restructure, or cease operations” there by the end of April 2026. Valero also said it had recorded a $1.1 billion pre-tax impairment related to its California refineries.

Valero CEO Lane Riggs cited challenging regulatory and enforcement environment for the decision to cease operations.
Benicia’s closure is the latest in a series of planned refinery shutdowns in the state. In October, Phillips 66 (PSX.N), said it would shutter its Los Angeles-area refinery by the end of this year. Phillips 66 last year converted its Rodeo refinery into a renewables production facility.

Gasoline prices in California are among the highest in the country due to the state’s reliance on imports to offset declining supplies.
California Governor Gavin Newsom this week told state officials to step up efforts to guarantee reliable fuel supplies for the state.

“California has been pursuing policies to move away from fossil fuels for the past 20 years, and the consequence of that is the regulatory and enforcement environment is the most stringent and difficult of anywhere else in North America,” Riggs said on Thursday during a call with analysts.

The Benicia refinery costs considerably more to maintain compared to Valero’s 135,000-bpd Wilmington refinery near Los Angeles, Riggs added.

The Benicia refinery accounts for about 9% of the state’s crude oil refining capacity. The facility processes feedstocks into products including gasoline, diesel, jet fuel and asphalt.

“Our current intent is to close the refinery,” Rich Walsh, executive vice president at Valero, said during a call with analysts. “We’ve already had meetings with the CEC (California Energy Commission) and are working with them to minimize the impacts that would result from the loss of the refinery.”

 

Benicia CA, Benicia City Council, Industrial Safety Ordinance (ISO), Just transition, Valero Benicia Refinery

Cathy Bennett: Valero’s “current intent” is anyone’s guess

If Valero closes, or not … Benicia can hold them accountable. This is not the end of the world.

By Cathy Bennett, April 24, 2025

Cathy Bennett, Benicia

My thanks go to Steve Golub in his recent article outlining the broader perspective and potential reasons for Valero’s “possible” closer. As always, Steve is clear and concise in explaining a very complicated situation. In the wake of Valero’s sudden announcement there is a lot of finger-pointing going on, and his article wisely advises a mindful step back to see the bigger picture.

I for one, do not believe that Valero is actually going to close. I think Valero is stacking up its options in a strategic move to give itself as much wiggle room as possible for the tough decisions it must now make, due to a variety of reasons, the least of which is the
watered-down ISO. I also believe Valero benefits tremendously by these scare tactics to the public (and Benicia City Council) at the very time when decisions are forthcoming regarding fees and fines for the ISO.

The timing of Valero’s announcement, and the reckless manner it threw its employees and the city of Benicia under the bus, strikes me as a crude thumb to the nose. Another example that Valero has never been “a good neighbor”. That said I would urge everyone to resist panic. There are many layers to this onion. We must peal back each layer one at a time to expose the true underbelly of what is before us. By staying focused and examining each step, Benicia will develop a solid strategy to move forward. Benicia must hold Valero accountable for what ever decision it ultimately makes. That includes clean up of the 400 acres of potentially toxic contamination of waterfront property if it plans to close.

This is not the end of the world, nor the demise of our beloved Benicia. I trust our city council to think this through carefully, not over-react, and not capitulate to Valero’s threats. This is one more piece of evidence of the bully behavior we have been dealing with for decades.

Cathy Bennett
Benicia resident for 25 years

Benicia CA, Benicia City Council, Industrial Safety Ordinance (ISO), Just transition, Valero Benicia Refinery

Larnie Fox: Open letter to our Benicia City Council and staff

Thank you for placing the health and safety of Benicians above other concerns

By Larnie Fox, April 23, 2025

Benicia resident and artist, Larnie Fox

Dear Mayor, City Council members, and Chief Chadwick,

I am so proud of our City Council and staff!

In light of the recent announcement by Valero to “idle, restructure or cease refining operations”, it is more important than ever to have an Industrial Safety Ordinance in place. In spite of significant pressure and threats from Valero, and at great political cost, you placed the health and safety of Benicians above other concerns. Bravo! And thank you.

I think that Valero’s decision had little to do with our new ISO, but probably did affect the timing of their announcement.

It looks like what made them decide to change their operations next year was the regulatory atmosphere in California, the expense of fixing their hydrogen leak, and the $82M fine from the Air District. California is moving away from fossil fuels, and the company could see the writing on the wall.

What made them announce their decision now? My guess is it was a desire to blame you and your constituents’ measured effort to finally monitor and regulate the refinery’s ongoing release of toxins, and to stir up community resentments.

If they sell or restructure, the ISO will be important to monitor and regulate whatever activities occur on their site. If they shut it down, then we will need a plan in place to assure a “just transition” ~ aka a good clean-up of a very toxic site. With some long-term and visionary thinking, something good may yet come out of this.

The ISO will also be important to regulate the dozen or so other industries that work with dangerous chemicals in town, especially Valero’s other little refinery, the asphalt plant.

It took courage to lead our little town to stand up against big oil, but you did it, and we did it.

Thank you!

Larnie Fox, Benicia

Benicia CA, Just transition, Valero Benicia Refinery

Lifelong Benicia resident Dirk Fulton offers bold vision for closure of Valero refinery

A Great Day for Benicia

By Dirk Fulton, April 23, 2025
[and appearing in the Benicia Herald on April 25, 2025]

Dirk Fulton, Benicia

Valero Refining’s recent announcement to idle its petro-chemical plant next year is very encouraging news for our town and quite the opposite of the financial doomsday depicted by some fear-mongers.

As a lifetime 71 year resident, former elected public official, and local business owner, I have watched the refinery negatively impact us for over 55 years with extremely high levels of toxic air and water pollution, visual blight, and use of 50% of our city’s water resources at nominal rate.

These factors have exposed us all to severe health risks, caused a negative image of our city resulting in lower home values, and contributed directly to higher domestic water rates. This has been made even more alarmingly clear by the record-breaking $82 million fine recently imposed upon Valero for its air pollution violations in Benicia that also captured negative media-attention for our town.

The costs of having a 1960s-era oil refinery dominate our town should no longer be tolerated. We can embrace this rare chance to uplift an image of Benicia as an inviting historic waterfront community with a small town atmosphere, artist community, great schools and a welcoming downtown, rather than a pollution-filled refinery town whose far-fetched executives try to influence our local elections.

Our Benicia economy is stable and much more diverse than it was 60 years ago when the Arsenal closed. We are a commuter, residential community and no longer a company town dependent on one military installation, one company, or one refinery complex. We cannot repeat the doomsday thinking of the mid-1960s following the Arsenal closure, which led to the siting of the Humble Oil refinery (now Valero) and the nearby toxic waste dump to support it.

Short-term financial impacts related to a Valero closure have been exaggerated and can be mitigated. Since Valero does not produce sales tax for the city, the short-term revenue loss will result primarily from a Proposition 8 “temporary real property tax reduction”. This reduction will be less than 20% of factored base value since Valero has already received generous tax reductions through years-long litigation with the City and County Assessor, and because its land and improvements (office buildings, tank farms, pipelines, utility infrastructure, etc.) retain their inherent market value. Once alternative land uses occur, full property values will be restored. Just some examples of clean alternative uses are: housing, mixed use commercial, commercial retail, and clean energy. Additionally, the city will enjoy enhanced tax revenue from increased residential real property values as homes change hands. Benefitting both directly the city and its homeowners, local real estate professionals estimate a rapid 15-20% appreciation in values once the refinery- town stigma is eliminated.

Idling the refinery also provides many new financial opportunities beyond increased property tax revenues: The 50% recapture of our water resource supply can be marketed to growth-oriented municipalities at substantial annual profit; Tourism and related TOT (hotel tax) and sales tax revenue should increase as the town becomes a more attractive tourist destination; Development fee revenues will increase as new and alternative land uses occur in the industrial park; and importantly, there is the opportunity for a long-overdue port tax (common in many west-coast port cities) as our port facility will now gain additional capacity.

Lastly, regarding concerns over diminished contributions from Valero Refining to community non- profits, I believe that Benicia residents and businesses have been and will continue to support our local non-profit agencies, and this effort will be augmented by the recent creation of the Benicia Community Foundation and its already generous grant funding of local needs.

In summary, Valero’s announcement to idle refining operations bodes well for our town and creates a bright future, provided the mistakes of the 1960s following the Arsenal closure are not repeated by city leaders.

Read Dirk Fulton’s series, A Great Day for Benicia