As the conflict in the Middle East continues to push U.S. fuel prices sharply higher, a California lawmaker and industry analyst are suggesting another in-state refinery will end operations sooner than expected.
"Valero just announced that they're going to shut down another refinery early next year, in January," Republican state Sen. Tony Strickland said earlier this month in an interview with San Diego's Fox 5 News.
While Valero has wound down refining operations at its 149,000 b/d Benicia facility in Northern California, the company hasn't announced plans to cease refining operations at its 93,500 b/d Wilmington plant.
"The only [closure] announcement we've made is on Benicia," Valero Spokesperson Lillian Riojas told OPIS when asked about Strickland's comments.
The California Energy Commission said Valero hasn't informed it of any plans to close the Wilmington facility.
The CEC has "not received notice from Valero of plans for another closure," Niki Woodward, the agency's communications director said. "Refiners are required to give the CEC one year of notice if they plan to close or transition the use of a refinery."
Still, Strickland spokeswoman Jacqui Nguyen said "the writing is on the wall" when it comes to additional refinery closures in the state.
Michael Mische, associate professor at the University of Southern California's Marshall School of Business, said Valero Chief Executive Lane Riggs has made sound business decisions on the company future in the state.
"Valero wrote off or had an asset impairment charge of about $1.1 billion," Mische said, adding that the company made clear it was "both refineries, Benicia and Wilmington. Wilmington is sitting on their balance sheet with zero value right now. They wrote it off."
Valero in April 2025 took a $1.1-billion pretax impairment charge on the two plants facilities and reported asset-retirement obligations of $337 million at the end of last year's first quarter.
He added that Valero said earlier that it would "probably operate Wilmington to the end of the decade and [Riggs] made that statement a couple months ago," said Mische.
Mische, however, said Valero has a turnaround scheduled for the Wilmington facility and questioned why the company would spend hundreds of millions on an asset it recently deemed expendable.
"The consensus is Valero is probably thinking of leaving the state sometime between 2027 and 2029," he said. "With that, there goes another 91,000 b/d of production."
Mische estimated the closure of Phillips 66's Los Angeles refinery last year and the planned shutdown of the Benicia plant has reduced the state's gasoline production by 8 million to 10 million gal/day.
Interior Secretary Doug Burgum also commented on the loss of refining capacity in California in a March interview with Fox News.
"California used to have 40 refineries, now they have eight," he said. "Two more are closing [and] they're going to be down to six with Chevron and Valero closing. They have restricted supply and killed their own economy."
Chevron, however, said its has no plans to halt operations at either of its two California refineries and that Burgum must have misspoken.
"P66 and Valero have closed operations in the state," Ross Allen, the company's media advisor said. "Our El Segundo and Richmond Refineries are still very much alive and important to our business."
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
Reporting by Sydnee Novak, snovak@opisnet.com; Editing by Bayan Raji, braji@opisnet.com and Jeffrey Barber, jbarber@opisnet.com
(END) Dow Jones Newswires
March 23, 2026 10:59 ET (14:59 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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