Category Archives: Just transition

Benicia still working to save refinery

City Manager says city is also preparing to have a significant and seismic shift with losses

Vallejo Times Herald, by Thomas Gase, July 23, 2025

Three months after Valero Refining Company-California submitted notice to the California Energy Commission of its intent to idle and cease operations in April of 2026, Benicia leaders are still searching for solutions.

However, Benicia City Manager Mario Giuliani said “time is of the essence” as some deadlines are fast approaching this month in an attempt to keep the refinery in Benicia.

“The city has been working diligently to find solutions to this depth of a loss,” Giuliani said on Wednesday. “We have multiple task forces talking. We’re trying to prepare for the huge revenue loss to the city, but overall still communicating and forming action plans.”

Giuliani said Benicia has partnered with Tyler Munis to process and evaluate the situation.

“The city is preparing to have a significant and seismic shift with losses,” Giuliani said. “There is a potential of a $10 million loss on a $16 million budget.”

A drone view of the Valero Benicia Refinery in Benicia, Calif., on Thursday, May 1, 2025. The refinery is scheduled to close by April 2026 (Jane Tyska/Bay Area News Group)

In 2023 Gavin Newsom signed a law giving the California Energy Commission the authority to penalize oil companies for excess profits, declaring the state had “finally beat big oil.” More than two years later, the commission hasn’t imposed a single penalty or determined what counts as an excessive profit.

However, just two years later, the California Energy Commission Vice Chair, Siva Gunda, said that the state should pause the effort in favor of pursuing other policies to lower prices and maintain a steady oil supply.

“Together, we will evolve California’s strategy to successfully phase out petroleum-based fuels by 2045 while protecting communities, workers, and consumers, and foster market conditions that support the industry’s ability to operate safely, reliably, and successfully to meet demand through the transition,” Gunda wrote in a 24-page letter to Newsom in late June.

Gunda’s recommended pause of the penalty would have to be agreed upon by the full commission. Newsom has pitched the penalty as a way to rein in profits by oil companies, but critics said it would only raise prices.

Meanwhile California government officials are trying to find a buyer for the refinery. Giuliani said that losing the refinery would put California in “a crisis for 2026.”

“California will not have a significant fuel supply to meet demand,” Giuliani told the Times-Herald on Wednesday. “All the other refineries are planning to leave as well, so we that doesn’t help. There is a declining demand for fossil fuel, but still enough of a demand that we need it.”

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 U.S., Canada and the U.K. with a combined throughput capacity of approximately 3.2 million barrels per day.

Valero Headquarters in San Antonio, Texas, 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.

In connection with the evaluation of strategic alternatives for Valero’s operations in California, a combined pre-tax impairment charge of $1.1 billion was recorded for the Benicia and Wilmington refineries, and is expected to be treated as a special item and excluded from first quarter 2025 adjusted earnings. Also included in this amount is the recognition of expected asset retirement obligations of $337 million as of March 31.

Despite the grim news, Giuliani wanted to remind the public that Benicia has a history of coming through in adversity.

“We lost the Benicia Arsenal and Benicia Barracks in the mid 1960’s, but we came back with an industrial park on that land,” Giuliani said. “But we also need to face reality as we will be facing a period of austerity and we need to proceed with action and find new growth for our city.

“This is now a state issue and the state does not want to see this happen,” the city manager continued. “Conversations are continuing and there is certainly a chance that Valero stays, but time is of the essence. There is no deadline, but we’re talking about an amount of days were key points need to take place.”

Giuliani said that Benicia is at a crossroads.

“We’re tackling and fighting a war on two fronts,” the city manager said. “We’re fighting problems of the past while also fighting this problem with the refinery that instead of fighting ten years down the road, we are fighting now.”

The city of Benicia was given a shelter-in-place alert and areas south of the Valero Refinery were evacuated after a power outage caused a flare up sending plumes of black smoke across Interstate 680. – Chris Riley — Times-Herald

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.

State of California working to keep Benicia’s Valero refinery open

California seeks buyer to save Bay Area refinery as gas prices soar

A close up view at the Valero Refinery in Benicia on April 16, 2025. Valero said it intends to close, idle or restructure its refinery in 2026. But as gas prices soar across the state, California officials are intervening to find a buyer, according to a new report. | Carlos Avila Gonzalez/S.F. Chronicle

San Francisco Chronicle,  by Aidin Vaziri, July 23, 2025

In a rare move to safeguard California’s fuel supply, state officials are actively seeking a buyer for Valero Energy’s Benicia refinery, according to a report Wednesday from Reuters citing sources familiar with the matter.

Valero, the nation’s second-largest refiner by capacity, plans to shut down the 145,000-barrel-per-day facility by April 2026. The closure reflects declining fuel demand in the state and growing regulatory pressure on fossil fuel producers.

But with gasoline prices in California already the highest in the nation — averaging $4.484 per gallon on Wednesday compared to a national average of $3.155, according to AAA — the state is taking steps to prevent further market disruption.

Valero did not immediately respond to a request for comment. City officials in Benicia declined to comment.

The California Energy Commission is quietly facilitating talks with potential buyers in a bid to keep the refinery operational, according to the Reuters report.

“CEC is engaging with market players to explore pathways for the continued operation of in-state refineries,” the agency said in a statement to Reuters.

In a more detailed statement to the Chronicle on Wednesday, the commission emphasized that its efforts extend beyond a single facility and are part of a larger transition plan for California’s fuel supply system.

“CEC has been and is actively supporting conversations with a variety of market players to discuss pathways to address the impacts of the closure intent announcements of the Phillips 66 refinery in Wilmington and Valero refinery in Benicia,” the agency said. “CEC’s goal, as part of a statewide transition strategy, is to support a stable and affordable fuel supply, including by promoting resilience in the transportation fuels system and a prudent cushion in fuel supply to mitigate impacts of refinery outages.”

The move signals a notable shift for a state long committed to aggressive climate goals. In recent years, California has prioritized the transition to renewable energy, pushing to shutter traditional refineries — a policy that has often put the state at odds with oil companies.

The planned Benicia closure follows Phillips 66’s decision last year to shut its Los Angeles-area refinery. Together, the two facilities account for roughly 17% of the state’s gasoline supply. Analysts warn that losing both could drive pump prices as high as $6 to $8 per gallon, according to a UC Davis study.

According to the report, among the parties contacted by the state is HF Sinclair, which had previously held talks with Valero before negotiations fell apart over an environmental issue. It said the Energy Commission has also reached out to European operators familiar with stringent emissions standards, the report said.

Valero employs approximately 400 people in Benicia, ranking among the city’s top employers. It also stands as Benicia’s largest taxpayer and a significant contributor to local charitable efforts.

On the same day news broke that California officials are trying to find a buyer for Valero’s Benicia refinery, authorities responded to intermittent flaring at the facility.

According to the Benicia Fire Department, the flaring began Wednesday after a unit was restarted following routine maintenance. Valero attributed the event to a “mechanical issue” with its nitrogen plant and said it would continue for several hours while the situation was monitored.

“We currently do not anticipate any off-site health impacts,” fire officials said in a social media post.

The Bay Area Air Quality Management District confirmed it was investigating the incident, responding to complaints, and monitoring for possible air quality violations.

Flaring, the controlled burning of excess gases, is a standard safety measure at refineries to relieve pressure and prevent explosions.

The facility has had other problems in recent months, most notably when a significant fire broke out May 5, prompting a shelter-in-place notification for nearby residents. Firefighters brought the blaze under control about an hour later.

Dirk Fulton: A Great Day for Benicia, Part Four

AN OPEN LETTER TO THE MAYOR & CITY COUNCIL

BENICIA IS AT A CROSSROAD: WILL YOU TAKE ACTION TO SAFEGUARD OUR HEALTH BY WORKING TO CLOSE VALERO NEXT APRIL OR LET THE STATE DECIDE OUR FATE?

By Dirk Fulton, June 26, 2025

OUR ALARMING CANCER RATES

Valero oil refinery in Benicia CA. | Lea Suzuki/S.F. Chronicle

There are several convincing reasons for the refinery to close as soon as possible. The most compelling is the significant adverse impact of Valero’s emissions on our health.

Benicia residents Dr. Richard Fleming and Stephen Golub have separately published well-researched articles describing that Benicia’s rates of cancer are much higher than Solano County and the State of California based on several data sources available from the County and the State.

I have many friends, neighbors and family members in town who are fighting cancer or have suffered from cancer. I imagine many of you do as well. The data is shocking:

    • Our rate of lung cancer appears to be 44% higher than the California rate.
    • Our prostate cancer rate appears to be 70% higher than the state’s.
    • Our breast cancer rate appears to be 94% higher than the state rate.

Thanks to the Air Board enforcement action against Valero, we now know that the refinery knowingly polluted us with highly toxic carcinogens over a recent 16-year period. The contaminants included known cancer-causing compounds like benzene, toluene, methylbenzene and xylene. The wrongful emissions exceeded Air Board standards by 360% and often constituted 2.7 metric tons of hazardous pollution daily.

Extensive medical studies from the United States (e.g., University of Texas Medical Branch) and internationally (e.g., Taiwan and Jordan) have found a well- documented connection between residents living in refinery communities and higher cancer rates. Benicia residents are unmistakably in harm’s way.

Some offer counter arguments that the above-described cancer data is “cherry-picked”, but they fail to offer any evidence or proof to support their claim. Until data is presented which indicates Benicia’s cancer rates are “normal”, the fact stands that the available data from the County and State shows that our cancer incidence is abnormally high.

THE CITY HAS A DUTY TO PROTECT US

The City of Benicia has an unconditional duty to protect our health and safety from toxic pollution no matter where the threat comes from. This is a basic obligation of local government that arises under its constitutionally guaranteed “police powers” to protect the health, safety and welfare of its community. The Industrial Safety Ordinance enacted by the City that was fought for tirelessly by community activists and opposed vigorously by Valero is a great start, but more action is needed. The recently established private “task forces” which lack formal public input and have no timetable for city action are not going to safeguard us from Valero’s cancer-causing pollution. If the city fails to act more broadly, it is exposing itself to potential liability for mass tort claims should Valero remain operating past its stated closure date of April 2026, as city leadership is now fully aware of Valero’s carcinogenic emissions, extensive record of violations and Benicia’s high cancer rates.

Valero fire 5/5/2025 | Larnie Fox

A summary of Valero’s environ-mental violations and penalties since 2003 clearly demonstrates the need for urgent action:

    • 2003-2005 EPA violations- $97,940.00
    • 2011-2015 Bay Area Air Board violations- $122,500.00
    • 2014-2016 EPA violations-$157,800.00
    • 2016 Bay Area Air Board violations- $249,000.00
    • 2017 Bay Area Air Board violations-$345,000.00 $191,500.00 settlements
    • 2021 Cal OSHA violations- $528,750.00
    • 2023 EPA violations-$1,224,000.00.00
    • 2024 CARB & Bay Area Air Board violations-$82,000,000.00
    • 2025 Bay Area Air Board violations pending (refinery fire)-$?

This astonishing record of chronic violations cries out for our city government to act to safeguard us from further harm, as the almost Eighty-Five Million Dollars ($85,000,000.00) in fines has not altered Valero’s conduct.

ACTIONS THE CITY CAN TAKE IMMEDIATELY

Benicia Mayor Steve Young, Vice Mayor Macenski, Councilmembers Birdseye, Largaespada, Scott.

The Mayor and City Council should act right away as follows:

    • Lobby Governor Newsom, the California Commission Energy and our legislative representatives to close the refinery according to the legal notice by Valero establishing an April 2026 Closure date without exception or further delay.
    •  Inform Valero that if they fail to close as scheduled, the city will exercise its police powers to:
      • Declare Valero a public nuisance and seek injunctions to abate violations and impose local penalties. The City of Torrance took such action and successfully declared Mobil Oil’s refinery a public nuisance in court after an explosion and fire.
      • Use municipal code enforcement including the newly adopted ISO to fine and/or shut down unsafe operations.
      • Rezone the refinery footprint area to phase out heavy industrial uses creating a Non-Conforming Use allowing the city to stop oil refining should the refinery operations cease operations for 120 days or longer. The City of Torrance has adopted this approach and amended its zoning ordinance to create a framework for phasing out non-conforming hazardous uses like oil refineries.
      • Impose a refinery tax such as the $1-per-barrel refinery excise tax proposed by the City of Richmond regarding the Chevron refinery. Chevron settled with Richmond prior to a public vote agreeing to pay $550 million over 10 years.

 TRAVIS AFB FALLACY & MISLEADING FINANCIAL DATA SUPPLIED BY THE CITY DO NOT SUPPORT DELAYING CLOSURE

Open Vjo 4/30/2025, KWright_USAF

The information about Travis AFB’s viability if Valero closes put forth by the city in citizen-paid, direct mail pieces is misleading. A Valero closure in April 2026 will not cause a Travis AFB closure when true facts are examined. This has been confirmed to me by a very high-ranking federal official. Travis AFB has been in operation since 1942 supplying military support during WWII, the Korean War and the Vietnam War- for over 27 years before Valero began supplying it with jet fuel. Extensive energy pipelines run under the bay from northern California to the air base, which served Travis and can be utilized again.

Additionally, the projected revenue loss from a Valero closure has been overstated by millions of dollars because current income such as property tax remains payable and other losses can be replaced with alternative revenue streams. (I have set forth these items in detail in prior articles.) Such alternatives include income from increased residential real property taxes, excess water revenues, port fees, development fees and Air Board settlement monies ear-marked for Benicia.

A GREAT DAY FOR BENICIA CAN STILL BE ACHIEVED

The risks of cancer and related social costs of having a 1960s-era oil refinery dominate our town can be avoided. I hope that our city leaders and citizens embrace Valero’s offer to close next April and unite to “pull out all the stops” to make sure it does shut down. Only then can we undertake a comprehensive site clean-up and establish a promising post-refinery future.  By seizing this rare opportunity, we can restore our clean air and achieve an image of Benicia as a healthy, historic community with a small-town atmosphere, inviting downtown, safe neighborhoods, and great schools.


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


Dirk Fulton, Benicia

Dirk Fulton, Lifelong Resident & former Solano County Planning Commissioner, Vice Mayor, City Councilman & School Board President
For More Information visit: www.greatdayforbenicia.com

Dr. Richard Fleming: Many Benicia cancer rates higher than Solano County and California

Refinery leaving will hurt Bay Area town’s economy, but there will be a big benefit

The Valero oil refinery in Benicia CA. | Lea Suzuki/S.F. Chronicle

Letters, San Francisco Chronicle, by Richard Fleming, M.D., Benicia resident and author, Older But Wiser. June 3, 2025

Richard Fleming, M.D., Benicia, CA

Regarding “This Bay Area town grew into a prosperous suburb — but is now facing fiscal crisis” (Bay Area, SFChronicle.com, June 1): A key point was left out of the story — the Valero refinery’s adverse impact on the health of Benicia residents.

Despite being an otherwise healthy city, our rates of many cancers are much higher than Solano County and the rest of the state.

Benicia’s rate of lung cancer is between 14.5%-21.8% higher than the county’s and about 44% higher than the California rate. Our prostate cancer rates are 32.8% higher than the county’s and 70% higher than the state’s. For breast cancer, we have a 36% higher rate than our county and a 94% higher rate than our state. This data comes from Solano County and state public health sources.

While it cannot be definitively concluded that these higher cancer rates are due to refinery emissions, they are similar to the higher rates near refineries elsewhere that are well-documented in medical studies.

Yes, it will be economically challenging to weather Valero’s exit. But there is little doubt that when this happens, our community’s risk of cancer will drop. Many Benicia residents are looking forward to being able to breathe healthier air and are willing to work with our city government to move into a post-refinery future.

Dr. Richard Fleming, Benicia