Before the end of the year, the California Independent Petroleum Association sent a blunt message to the California Energy Commission: California’s oil industry is approaching a breaking point, and state inaction risks higher gas prices, supply disruptions, and deeper economic harm for working families and businesses.
The letter urges immediate intervention to prevent the dismantling of the Valero Benicia Refinery and the collapse of the San Pablo Bay Pipeline, the last pipeline carrying Kern County crude to Northern California refineries. According to CIPA, losing either would destabilize the system.
California once operated more than 40 refineries. Today, only nine remain. Two more closures are already underway. Refinery capacity has fallen sharply, even as Californians still consume roughly 1.8 million barrels of oil per day. Californians use more oil today than ten years ago.
Electric vehicle adoption has not erased California’s oil demand. It has merely shifted the conversation. Gasoline, diesel, jet fuel, and more than 6,000 petroleum-based products, embedded in nearly every sector of the economy, remain essential.
The Valero Benicia facility is not an abstract asset. It produces California-specific fuels that cannot be easily replaced by imports. Once the oil refinery is dismantled, it will be nearly impossible to restart.
Reduced refining capacity means less competition, tighter supply, and greater exposure to price spikes during disruptions.
The pipeline risk compounds the problem. The San Pablo Bay Pipeline is already idle. If it shuts down permanently, crude will have to be moved by truck, rail, or tanker.
According to a report by Michael A. Mische of the University of Southern California, James W. Rector of the University of California, Berkeley, and Joseph B. Silvi of the University of California, Berkeley, “to replace 100% of the SPB pipeline capacity using a large tanker truck would require and add up to 222 more trucks a day to California’s already stressed highway and freeway system.”
That is 222 more trucks a day going up to Northern California and 222 trucks coming back down to carry another load.
Every additional dollar in transportation costs is paid by consumers. That cost shows up at the pump, in grocery bills, and in the cost of moving goods across the state.
CIPA also highlights policy-driven constraints that are accelerating production declines, including restrictions that prevent routine maintenance of existing wells. Oil producers are having a difficult time upgrading and repairing existing oil wells because of California legislation (SB 1137). The result is predictable: less in-state production, more imports, and higher costs.
For working Californians, high fuel prices hit household budgets immediately. For small businesses, higher transportation and energy costs squeeze margins and drive up prices. For local economies, refinery and pipeline losses mean fewer jobs, less tax revenue, and greater dependence on foreign supply chains that California cannot control.
The letter does not argue against transition. It argues against disorder. An unmanaged collapse of refining and pipeline infrastructure will not reduce demand. It will simply export it, along with jobs and environmental oversight.
The California Energy Commission can act to stabilize the system or accept a future of higher prices and chronic instability for the people who can least afford it.
Hector Barajas is the founder of Amplify360 Inc., a strategic communications and public affairs firm based in Sacramento and Los Angeles. Amplify360 helps organizations shape narratives, influence public opinion, and navigate complex public policy environments through media relations, coalition building, and integrated communications strategies. The firm works with clients facing high-stakes legislative, regulatory, and reputational challenges across local, state, and federal arenas.
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