Tag Archives: Valero Benicia Refinery

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

Benicia Councilmember Terry Scott: Statement on Valero Benicia Refinery Closure

“I am conflicted…”

From his email with permission, by Terry Scott, Sep 16, 2025

Benicia City Councilmember Terry Scott.

I am conflicted by the news that the Valero Benicia Refinery will close next April following the state legislature’s decision to halt discussions regarding environmental regulatory relief and potential operational funding.

My conflict stems from two profound realities now facing Benicia:

On one hand, I am genuinely relieved that sometime next year our air will become cleaner.

On the other hand, I am equally troubled by what this abrupt closure means for our City’s financial future.

Let’s start with cleaner air. Isn’t that what we all want? To breathe cleaner air?

We know our air quality will improve, potentially reducing asthma, cancer risks, and other health impacts our residents have endured by living in the shadow of the refinery for decades.

Huge win for Benicians. Huge win for the environment.

In additions, the constant concerns and notifications about refinery flaring, chemical leaks, fires, and emissions that Benicia has lived with since this refinery’s beginning will finally be in the past.

This represents a significant health victory for all residents, visitors and businesses operating in our community as well as the folks living downwind from the refinery.

However, as noted, I am equally troubled by what this abrupt closure means for our City’s financial future. The impact on our residents , our local businesses, our staff.

Our ability to maintain our quality of life obviously has a cost.

The Refinery closure comes at a cost. A big financial cost.

Had the state succeeded in creating a 3-5 year operational glide path with funding support for Valero’s continued operations, including their asphalt plant, we would have gained precious time to develop a comprehensive transition plan with many partners, including Valero’s Signature Development Group, local and regional organizations and development of our own Citizens Task Forces.

This extended timeline would have allowed us to implement our Industrial Safety Ordinance that would have provided better control during the transition of emissions through improved oversight while simultaneously preparing support systems for the small businesses that will be directly impacted by Valero’s departure.

The financial reality is stark: we face losing approximately $7.7-$10 million from our City budget—revenue that directly funds essential City services. This loss will require significant changes in how Benicia provides services to the entire community which will demand difficult decisions about our City’s operations.

However, this closure now provides us with a critical opportunity to apply direct pressure on the Bay Area Air District to provide Benicia with access to the approximately $54 million in settlement funds they received from Valero.

Utilizing these funds could help stabilize Benicia for several years of this transition and transformation, cushioning the immediate financial impact of Valero’s departure.

As importantly, this transformation creates an unprecedented opportunity to replace dirty industry with clean, sustainable industry.

At this point there are many questions yet to be discussed and answered. Will Valero create a tank storage farm for imported refined gas? If so, we will receive no revenue from that conversion and worst it could block development and remediation of the site for a lengthy period. Answers will soon be forthcoming.

Then there’s the decommissioning process and its impact on Benicia. Followed by the dismantling process with incumbent environmental issues. Finally, what will be considered acceptable site remediation?

Is there a Valero vision for the long road ahead? Now that the decision has been made, the City must be driving as much of the process as possible to create a vision for reimagining the 900+ acre site.

I can say with certainty that the City began moving forward with development of a comprehensive plan immediately after the Valero April announcement.

Despite these challenges, I believe in Benicia’s resilience. I believe our community will rise to meet these obstacles.

As noted, we will create a plan that identifies ways to navigate these financial losses , make the hard decisions necessary for our survival, and successfully partner with Signature Development Group to reimagine what that refinery property can become—ultimately reenergizing our city in ways we haven’t yet envisioned.

This is our moment to prove that Benicia’s strength lies not in dirty industrial dependence, but in our community and businesses ability to adapt, innovate, and thrive together while building a cleaner, more sustainable future.

As we envision the revolution that will take place on that 900+ acre site of Valero over the coming years, we can position Benicia as a leader in environmental innovation and economic sustainability.

I do not offer this as a cheer leader. I offer this as a dedicated public servant working with my fellow council members and Mayor, the people of Benicia, and with a staff that wants to succeed.

I’m hoping I’m talking to a community that embraces the transformative changes ahead and does not resort to pointing figures but lifting a hand to help our community.

I ask you to accept that this is our moment to prove that Benicia’s strength lies not in industrial dependence, but in our community’s ability to adapt, innovate, and thrive together while building a cleaner, more sustainable future.

We face a tough future. We need to face it together as a community that wants Benicia to succeed rather than dwell in the world of the what ifs and I told you so’s.

Terry Scott
Benicia City Councilmember

Benicia CA, CA Assemblymember Lori Wilson, California Energy Commission, California Gov. Gavin Newsom, Just transition, Mario Giuliani, Valero Benicia Refinery, Valero Energy Corporation

Giuliani: ‘Benicia can proceed with refinery closure’

The saga of Benicia’s Valero Refinery may finally have an official end date.

Vallejo Times-Herald, by Thomas Gase, September 15, 2025

Despite legislators working around the clock to reverse the decision, Benicia City Manager Mario Giuliani told the Times-Herald on Monday that, “Benicia can now proceed with the closure of the refinery in April or possibly sooner.”

Last April, Valero Energy Corporation’s subsidiary, Valero Refining Company-California, submitted notice to the California Energy Commission of its intent to idle, restructure, or cease refining operations at the Benicia Refinery by the end of next April.

“State officials have been working feverishly to explore other options since April, but it seems with no new news in the last few days, that the clear option that would make Valero stay didn’t work in their best interests,” Giuliani said. “Certainly as a city manager and longtime resident I’m disappointed that a solution wasn’t made. This is not only going to impact Benicia, but California as well. It’s frustrating, because the city was finally in a position to turn the corner.

“Now we’re going to have significant and seismic changes,” the city manager said.

Giuliani said that there is $60 million in the general fund budget and that it will now have to be reduced by $7.7 million by July. Despite the grim news, Giuliani tried to sound optimistic on Monday.

Benicia City Manager Mario Giuliani

“It’s a problem we’re going to have to solve and it’s certainly difficult,” Giuliani said. “But while a difficult challenge, Benicia has been given the pen to be the author of the next chapters of the cities history.”

The news from Guiliani comes just two days after Assemblymember Lori D. Wilson (D-Suisun City) announced that Senate Bill 237, authored by state Sen. Tim Grayson, passed the California State Assembly with broad bipartisan support in a 63–4 vote and passed in the Senate in a 28–0 vote. That bill now heads to Gov. Gavin Newsom’s desk.

SB 237 responds to the state’s shifting energy landscape, where refinery closures, declining gasoline demand, and reliance on imports have left families, workers, and communities vulnerable.

Assemblymember Lori Wilson

“As the representative for Benicia, I know firsthand the impact refinery closures have on local economies, union workers, and small businesses,” said Wilson in a news release. “SB 237 is about managing change responsibly while protecting California families, workers, and communities. The closure of the Valero refinery means the loss of thousands of good-paying jobs and hundreds of millions of dollars in local economic activity.”

Valero Energy Corporation has owned and operated the Benicia Refinery since 2000. The refinery was originally built for Humble Oil, later called Exxon. Construction of the facility began in 1968 and was completed in 1969.

Valero Energy Corporation, through its subsidiaries (collectively, Valero), is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products, and sells its products primarily in the United States, Canada, the United Kingdom, Ireland and Latin America.

Valero owns 15 petroleum refineries located in the United States, Canada and the UK with a combined throughput capacity of approximately 3.2 million barrels per day.

Valero Headquarters in San Antonio, and has more than 9,900 employees, with approximately 400 at the Benicia venue. That refinery has a throughput capacity of 170,000 barrels per day, according to the company. According to a list from the California Energy Commission, Benicia has 8.94 percent of the state’s crude oil capacity.

“We understand the impact that this may have on our employees, business partners, and community, and will continue to work with them through this period,” said Lane Riggs, Chairman, CEO and President of Valero.

Meanwhile, Wilson’s legislation aims to strengthen safety standards for offshore oil and gas pipelines, directs state agencies to evaluate consumer protections at the pump, prohibits drilling permits in health protection zones, and takes steps to stabilize gasoline prices for California families.

SB 237 also directs the California Energy Commission, in consultation with the Air Resources Board, to explore temporary suspensions of the state’s summer gasoline blend if it would protect consumers from significant price increases. In addition, the Energy Commission is tasked with studying the potential for a western regional gasoline blend to stabilize markets and submitting recommendations to the Legislature on strategies for a safe, equitable, and affordable transition away from fossil fuels.

The Valero Refinery in Benicia was one of four refineries in the SF Bay Area that did not meet air quality requirements for compliance with the Bay Area Quality Management District in 2023. (Chris Riley/Times-Herald file)

While Valero is a big part of Benicia business, is it not without its critics — particularly after the refinery became the site of a series of air pollution incidents. This includes a hydrogen vent at the refinery that had been leaking 2.7 tons of toxics into the air for 15 years. That discovery resulted in an historic $84 million fine imposed by the Bay Area Air Quality Management District (an oversight agency) in 2024.

Critics also point to inspectors reporting that Valero management had known about the leaks for years, but failed to report them or take steps to mitigate the leak. The fine reportedly was the largest penalty ever assessed by the district.

Valero was one of four other refineries that in 2023 didn’t meet requirements as defined by BAAQMD and Rule 12-15. That rule — passed in 2016 — requires refineries to monitor and report fugitive gasses from their operating equipment, such as valves, compressors, and storage tanks. These emissions impact the health of the surrounding communities — the toxic gases released include noxious chemicals like the cancer-causing benzene.

The Benicia City Council on April 2 voted 5-0 on a safety ordinance that aims to help protect Benicians against potential fires, explosions and toxic emissions connected to the Valero Refinery and other facilities causing health concerns in the city. Before the vote, Benicia was previously the only Bay Area refinery town to not yet have an Industrial Safety Ordinance.

However, the Benicia City Manager said that the Benicia City Council passing an Industrial Safety Ordinance 5-0 earlier in April was a separate entity and that the reasons for the possible departure had more economic and political reasons.

“There has been a sale in the works for some time with Valero, so I don’t believe the passage of the ordinance has anything to do with this,” Giuliani said in April. “San Antonio has highlighted some trust issues for some time, so to that extent this news isn’t shocking. When Valero announced a sale, we had heard rumors for some time … However, the news that they might be leaving entirely, that is shocking.”

Benicia CA, California Energy Commission, California Gov. Gavin Newsom, Just transition, Valero Benicia Refinery, Valero Energy Corporation

Benicia’s Marilyn Bardet: ‘The state has its tail between its legs, wagging, suckered into deal-making with an oil giant.’

The Benicia Independent, by Marilyn Bardet, September 12, 2025

VALERO BENICIA REFINERY TO CLOSE? – BACK ROOM PRIVATE NEGOTIATIONS

On April 15th, Valero Energy Corp stunned our city making their “surprise” well-orchestrated announcement to the California Energy Commission [CEC] saying they intended to”idle, restructure or cease operations” at their Benicia refinery by next April. Evidently, the state was caught off guard, ill prepared for a second refinery closure, just after Phillips 66’s Wilmington refinery had announced last year that they’d be closing this year, (in fact, that closure is in progress).

Marilyn Bardet

So, I speculate in the dark, wondering about the state’s backroom private negotiations with the largest refiner in the USA whose profits please its investors. It’s well documented that Big Oil despises California’s extensive environmental regulations that they say impede doing business in this state. Valero tried to blame a restrictive regulatory environment including the City’s adoption of our Industrial Safety Ordinance for its reasons to opt out of refining in Benicia.

JUST A BARGAINING THREAT

But wait. Think about Valero’s position in negotiations. The law requiring refineries to report to the California Energy Commission [CEC] a year in advance of any proposed major change like closure gave Valero in particular a real advantage—a year after P66’s refinery closure that by itself wouldn’t strain the state’s gasoline supply. But if they were to threaten to end production in Benicia?

Surely Valero Corp knew the stats: stopping production at Benicia would cause a significant, though not bottomless, tanking of the state’s gasoline supply, such that consumers’ demand, while trending downward, could not be met without threatening the state’s economy: skyrocketing prices at the gas pumps, long lines for gas, empty stations—just what the all-powerful oil lobby, WSPA (“Whispa”– Western States Petroleum Association) wants us to understand.

Getting into negotiating position, Valero could demand capitulations on regulatory policy, and finesse a financial windfall to stay in business in California— with long-range implications for other oil giants’ maneuverings.

NEWSOM AND THE CEC FALLING FOR IT

After all, Valero Corp knew the governor would be very worried for his own political future as well as the state’s. He would have only four months to come up with tangible results before the end of the 2025 legislative session, which ends today, Sept 12. Newsom had quickly done his own gasoline-supply gap-math homework, and asked the CEC to advise about how to stabilize the state’s “petroleum market economy”. The CEC scrambled together an insider group of stakeholders, including environmental orgs, Benicia’s city manager, and industry reps, to put together recommendations to achieve “balance between available supply and current demand”. As it evidently turned out, the recommendations made public pivoted around the concessions that could be made to Valero to entice them to stay in business in Benicia.

In my view, Valero holds all the cards, keeping its 3 options open with no official mention of “closure”. So far, there’s no final resolution to adopt a budget that would have to incorporate the extraordinary expense of the Valero/state deal—what California tax dollars in the tens of millions will be paying so that prices at the pump will be stabilized.

IT’S ALL ABOUT A ‘JUST TRANSITION’

Think how Big Oil thinks: Valero knew their plays from the get-go: they knew the state has yet to pass “just transition” legislation; AND, the state has made clear it can’t (politically) afford to have any gap in the gas supply chain. . .

Whoever does the negotiating for the state, their hands are tied: the state had yet to adopt any clear, fair plans, policy guidance and requirements for closing refineries, for example, for ensuring thorough cleanups with full costs to be borne by the industry as Responsible Party. Right now, there are no such protections in place as called for by major environmental orgs who have worked hard to get the state to listen. The state has its tail between its legs, wagging, suckered into deal-making with an oil giant.

What does “just transitioning” mean to the Governor? What it should mean—and does mean to us—is adoption of concrete regulatory policy for moving away from fossil fuel extraction and production within the state; for health and safety protections for fenceline communities; for maintaining CEQA—the California Environmental Quality Act, the only defense of citizens’ right, within their jurisdictions, to be informed and comment on large-scale development proposals; compensating cities for fiscal and physical impacts of a refinery closure; for worker retraining within the energy sector; for the ultimate goal, namely, protecting the climate from catastrophic runaway global warming.

Big Oil very easily gambles, playing their extortionist game. Very Big Bucks will be siphoned out of state coffers to pay Valero what it considers its due as the poor victim of state regs, now under threat of evisceration by backroom deal concessions.

[See ‘California in Talks to Pay Hundreds of Millions to Valero to Stave Off Refinery Shutdown‘]

This is very ugly backroom politics indeed. What will be the time limit set for Valero’s “phase out” to closure—three years? Or…. ten? Or, will the state find another operator? And what kind of deal would that call for?

CITIZENS UNHEARD IN THE HEARING

This is what some of us from Benicia needed to hear about at the Aug 20th Assembly Oversight Committee hearing on “Transportation Fuels Transition Plan”. We needed to learn details of the state’s aim to keep the Benicia refinery operating and to voice our concerns for our own city and about state’s strategies to ensure a sufficient gas supply. There were 3-1/2 hours of presentations, mainly by the CEC, with Q&A. Benicia Mayor Young spoke for 10 minutes, speaking about the City’s estimated $8-$12 million loss of revenue should the refinery close, thus indicating his primary fear. Why was there no recommendation by the CEC to incentivize “demand destruction”— transport electrification? etc etc.

It was 5:15 p.m. by the time the public got to speak; there were only a handful of Assembly members or CEC staff left in the room. Over 40 people had lined up to testify, each given 1 minute to speak. Some had come up from Kern County to oppose more drilling near their neighborhoods. The day’s performance seemed like window dressing, all for show, with most of the assembled minds having been already made up, not apparently caring much about the fallout of negotiations for fenceline communities’ future health and safety, or how the state will ever meet its lofty climate goals.

Marilyn Bardet
Good Neighbor Steering Committee
BCAMP Board Member
BISHO Working Group
Valero Community Advisory Panel

See also:
Benicia CA, CA Gov. Gavin Newsom, California Energy Commission, California legislature, Valero Benicia Refinery, Valero Energy Corporation

California in Talks to Pay Hundreds of Millions to Valero to Stave Off Refinery Shutdown

Legislators discuss giving Valero millions to stay in Benicia

Bloomberg, September 9, 2025

California legislators are considering giving Valero Energy Corp. hundreds of millions of dollars to cover refinery maintenance costs in a bid to prevent the closure of a San Francisco-area fuel plant.

Under such a deal, the state would pay Valero to continue operating its Benicia refinery, according to people familiar with the negotiations who asked not to be identified discussing private deliberations. The plant is slated to close by April, the latest in a string of recent California fuel-plant shutdowns.

Between $80 million and $200 million of state funds would likely be earmarked for routine maintenance work, although the terms of the arrangement could be subject to change, the people said. Maintenance is one of the biggest operating costs for refiners and the expense of major overhauls typically performed every four or five years can be a catalyst for closure. Discussions with lawmakers over keeping the Valero facility open were held as recently as this past weekend. Absent a deadline extension, legislators have until late Tuesday to submit bills for consideration.

Valero shares briefly dropped on news of the talks but have since recovered and were up 2.8% to $161.77 at 1:10 p.m. in New York, making it the day’s best-performing oil stock in the S&P 500.

Valero didn’t respond to requests for comment. California Governor Gavin Newsom’s office declined to comment while representatives for state senate and assembly leaders didn’t respond to inquiries.

Newsom has in recent months taken a new tack with refiners and encouraged regulators to work with the industry to maintain fuel supplies in a state that often has the nation’s highest gasoline prices. The California Energy Commission has since walked back plans to impose a profit cap on refiners, a key factor in spurring recent plant closures.