Many in Benicia are skeptical… “It ain’t over yet.”
The Benicia Independent, by Roger Straw, Sep 16, 2025
The news came around 7pm on Monday, and the emails began flying around among those who have advocated for clean air, safe working conditions, strict monitoring and stiff fines – and for permanent closure and cleanup of Valero’s Benicia Refinery.
Here’s how engaged Benicians are reacting – a sample taken from Monday night’s emails:
“Wow. While I don’t have any inside information at all, and I certainly could be wrong, something tells me this isn’t the final chapter in the Valero/Benicia story. “
“Some good news for a change! I’m thrilled at this latest turn of events. But I agree…we may not have seen the end of this drama yet. Fingers crossed that Valero closes, and is held accountable for the costs of clean up of the site, and a smooth and responsible ‘transition’ out of Benicia.”
“IF this is truly the end, it’s all the more imperative that we press for the Air District to allocate much of the $56 million (plus possible interest) from the Valero fine/settlement to a Transition Fund that will help Benicia navigate the next five years as it becomes a more environmentally and financially sustainable community.”
“So here we are— Valero not going with a bang but a whimper. With no public announcement from the state about their failed bargaining with Valero? They should be embarrassed.. All those private backroom discussions didn’t add up to squat. So here we are! It’s a new ballgame!”
“It feels good to finally have a decision and I’m glad the state didn’t step in. The idea of it being a tank farm with the lack of revenue and the continued danger of toxic air wás the worst outcome. We can now focus on the transition.”
“My take is that Valero is still negotiating- by pretending to walk away. This is is 4th inning of a 9 inning game. They have 7 more months. We need to stay organized and envision a positive future without the major cancer factory on our fence line. “
“Remember when you bought your first car and the salesperson wouldn’t give you the deal you wanted until you started walking off the lot? This is like that. It ain’t over yet.”
The odds were low. But even so, some Benicia city leaders hoped that California would emerge from the past week’s final lawmaking push for the year with a plan to keep Valero Energy Corp. from shuttering its Bay Area oil refinery next year.
Lawmakers announced big deals on electricity affordability, oil drilling and climate measures for Gov. Gavin Newsom to either reject or sign. But none dealt directly with a dramatic problem for Benicia: That its biggest taxpayer and employer would soon be abandoning its 900-acre gasoline-making facility on the outskirts of town.
“The silence is deafening,” Benicia City Manager Mario Giuliani said.
California has some of the highest gasoline prices in the country – about $1.47 per gallon higher than the national average as of Tuesday. State officials have been grappling with how to continue transitioning away from fossil fuels without making drivers who don’t have electric cars pay exorbitant gasoline prices.
Last year, Phillips 66 announced it would shutter its facilities in Los Angeles by the end of 2025.
Then in April, Valero alerted California energy regulators that the San Antonio-based company intended “to idle, restructure, or cease refining operations at Valero’s Benicia Refinery by the end of April 2026.”
State law requires refineries to notify the state of any operational changes that might disrupt fuel supplies – and Valero’s departure would certainly be disruptive. The facility produces roughly 8% of the state’s gasoline, a difficult commodity to replace because the state requires a special blend.
During an October earnings call with investors, Valero’s chief executive Lane Riggs discussed California’s “regulatory pressure on the industry,” and foreshadowed the company’s announcement that would come six months later. He said that “all options are on the table” for its California operations and noted that the company had already “minimized” its capital spending in the state.
Valero did not immediately respond to a request for comment Tuesday.
But Riggs has previously acknowledged “the impact that this may have on our employees, business partners, and community, and will continue to work with them through this period.”
Giuliani said Valero has hired a contractor to work on a redevelopment plan for the site.
Losing both Valero and Phillips 66 meant California stands to lose nearly 20% of its refining capacity. Only seven oil refineries would remain in the state, which requires a special low-carbon blend of gasoline that not all refineries can make.
The closures threatened to make California’s high gasoline prices even higher.
Estimates vary, but many experts put that increase between 5 cents and 10 cents per gallon. They warned that the closures would mean that any unplanned disruptions at other oil refineries – when production stops for repairs or emergencies like fires – could send gas pump prices soaring, albeit temporarily.
“It seems there is now no path that remains for Valero to remain,” he said.
Daniel Barad, western states policy senior manager for the Union of Concerned Scientists, said subsidizing Valero’s refinery operations would require California to be prepared to spend millions more at other refineries too – a complicated commitment given that the state is still committed to transitioning away from fossil fuels.
“It’s important to keep gasoline prices stable as we phase out gasoline,” Barad said. “We have to do everything at the same time.”
Senate Bill 237 could boost the supply of crude oil to the Bay Area’s three refineries – Chevron in Richmond and PBF Energy’s Martinez Refining Co. in Martinez, in addition to Valero. The legislation proposes to increase oil drilling in California, which would potentially send more in-state crude oil for refineries and allow them to operate at higher capacities.
Barad said that is likely not enough to keep Valero open.
Benicia is now preparing to lose more than $10 million in revenue streams out of its $60 million general fund budget. Valero pays about $7.7 million in sales and property taxes to the city. The refinery is also the city’s largest water customer, spending about $3 million annually.
The city has already been dealing with the challenges from stagnant growth and an aging population, Giulliani said. The city of about 26,000 residents hasn’t grown much in the last 25 years.
Kari Birdseye, who serves on Benicia’s city council, said she’s heading up a task force working with local businesses that rely on Valero.
“A lot of local businesses have Valero as their only client – they make specific valves, specific ball bearings, customized equipment,” Birdseye said.
The city is now launching a process to determine which city programs to cut. City officials will compare costs and how many residents each program serves. Giuliani said that from the outset took Valero’s closure announcement seriously and didn’t expect the state to step in. Still, they were holding out hope.
“It’s going to be a significant and seismic shift in the city’s ability to provide services,” Giuliani said.
Julie Johnson is a staff writer covering wildfires, electricity prices, oil refineries and the North Coast of California for the Chronicle.
Julie’s in-depth examination of smoke exposure among wildland firefighters was a Scripps Howard finalist in 2023 for environmental reporting. In 2024, Julie’s investigation into the killing of a Mohawk activist who helped spark the 1969 occupation of Alcatraz Island, written with Jason Fagone, won first place honors from the Online Journalism Awards. Prior to the Chronicle, Julie was a reporter with the Santa Rosa Press Democrat, where she anchored the paper’s coverage of California wildfires awarded the 2018 Pulitzer Prize in breaking news.
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.
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.”
Julie Johnson is a staff writer covering wildfires, electricity prices, oil refineries and the North Coast of California for the Chronicle.
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