“The silence is deafening,” Benicia City Manager Mario Giuliani said.

San Francisco Chronicle, by Julie Johnson, September 16, 2025

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.

By July, state legislatures were considering whether California could pay Valero between $80 million and $200 million to cover Benicia’s maintenance costs and stave off its closure. But those deliberations appear to have gone nowhere, Giuliani said.

“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.

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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.

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.

“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.

“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.

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.”