Valero Vitality Corp. stated it could finish gasoline manufacturing at its Benicia refinery northeast of San Francisco subsequent 12 months and is evaluating “strategic alternate options for its remaining operations in California”.
The choice comes amid regulatory stress within the Democratic state. Rival Phillips 66 is working to close down its Los Angeles refinery by the tip of this 12 months.
San Antonio, Texas-based refiner Valero stated in a web based assertion it had notified the California Vitality Fee of its intent to “idle, restructure, or stop refining operations at Valero’s Benicia Refinery by the tip of April 2026”.
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Valero added, “In reference to the analysis of strategic alternate options for Valero’s operations in California, a mixed pre-tax impairment cost of $1.1 billion was recorded for the Benicia and Wilmington refineries, and is anticipated to be handled as a particular merchandise and excluded from first quarter 2025 adjusted earnings”. The quantity consists of anticipated asset retirement obligations of $337 million as of the primary quarter.
The Benicia refinery processes feedstocks into gasoline and diesel that meet California’s mixing necessities. It has a throughput capability of 170,000 barrels per day (bpd). It employs over 400 staff, based on info on Valero’s web site.
“We perceive the influence that this will have on our staff, enterprise companions, and neighborhood, and can proceed to work with them via this era”, stated chair, chief govt and president Lane Riggs.
On October 16, 2024, Phillips 66 introduced it will stop manufacturing at its Los Angeles refinery by the tip of 2025, with chief govt Mark Lashier citing uncertainty from “market dynamics”.
The announcement got here days after Governor Gavin Newsom signed into regulation his proposal requiring refineries to keep up minimal stockpiles, meant to stop worth spikes however which the trade stated would quite the opposite add prices.
The refinery can produce as much as 85,000 bpd of gasoline and 65,000 bpd of distillates and meets California’s requirement of a ten p.c ethanol mixing element, based on Phillips 66.
The looming refinery shutdowns come because the state barrels down towards attaining cleaner transport.
Throughout earlier president Joe Biden’s final days in workplace, California secured waivers from the Environmental Safety Company for its Superior Clear Vehicles II (ACCII) and Heavy-Obligation Omnibus. “Below the Clear Air Act, California is afforded the flexibility to undertake emissions necessities unbiased from EPA’s laws to fulfill its important air high quality challenges”, the EPA stated December 18, 2024.
ACCII units emission requirements and raises gross sales of zero-emission autos for mannequin years 2026-35 so that every one new light-duty passenger automobiles, pick-up vans and SUVs bought in California are zero-emission by 2035. ACCII builds on ACCI, adopted 2012 for mannequin years 2015-25.
“By 2035, all these autos should be zero-emission, which incorporates the choice to promote plug-in hybrid autos”, the California Air Sources Board (CARB) stated individually on the time.
“The regulation doesn’t ban fossil-fueled automobiles and pickup vans; residents can drive current inner combustion autos so long as they need”.
Below the Heavy-Obligation Omnibus, producers should curb emissions of nitrogen oxides, or smog-forming emissions, by 90 p.c. The omnibus requires an overhaul of engine testing procedures and additional extends engine warranties, CARB stated.
One other regulation referred to as Superior Clear Vehicles raises the share of medium- and heavy-duty zero-emission autos and near-zero emission autos in gross sales.
Nonetheless, the three laws now face a congressional problem beneath the Trump administration. On February 14 the EPA stated it will be “transmitting to Congress the Biden Administration’s guidelines granting waivers that allowed California to preempt federal automobile and truck requirements promulgated by EPA and the U.S. Division of Transportation’s Nationwide Freeway Visitors Security Administration”.
To contact the creator, e mail jov.onsat@rigzone.com
