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ENB Pub Note: Mike Umbro, a great guest on the Energy News Beat Podcast, was mentioned in the article, and his cover picture. He truly has the right ideas for California, unlike the current political leadership. The oil and gas business has been decimated in California by design. They want you to walk and not own a car. Watch how high the prices go when California starts importing Diesel and Gasoline from China.
Analysts say Californians could be paying significantly more for gasoline with the impending closure of two Phillips 66 refineries in Los Angeles, which account for about 8 percent of the state’s oil refining capacity, by the end of 2025.
Before the refiners made their announcements, the California Energy Commission had proposed that the state take over oil refineries to try to mitigate price hikes.
Analysts say Californians could be paying significantly more for gasoline with the impending closure of two Phillips 66 refineries in Los Angeles, which account for about 8 percent of the state’s oil refining capacity, by the end of 2025.
Before the refiners made their announcements, the California Energy Commission had proposed that the state take over oil refineries to try to mitigate price hikes.
California Versus ‘Big Oil’
Californians typically pay around 13 percent more for gasoline than the rest of the nation, according to a March 16 University of Southern California study on gas prices by Michael Mische with the USC Marshall School of Business. Gas prices in the state are currently $1.68 above the U.S. average.
“For decades, oil companies have gotten away with ripping off California families while making record profits and hiding their books from public view,” Newsom said at a press conference at the time. “California leaders are ending the era of oil’s outsized influence and holding them accountable.”
However, the University of Southern California study found that state policies, not oil and gas companies, have caused high gas prices. “California refiners have not engaged in widespread price gouging, profiteering, price manipulation, ‘unexplained residual prices’ or surcharges, magical or otherwise,” said the study.
Researchers also Researchers also predicted gas prices will rise when the Phillips 66 refineries close and that it’s “doubtful that demand will drop.”
“To compensate for the closure of the Phillips 66 refinery, California will most likely have to increase its imports of California-compliant gasoline, which is costly, and surviving refineries may have to increase capacity utilization,” the study found.
Oil Industry Responds
California’s proposal for a takeover of oil refineries stated: “The State would operate a market independent source of production which would eliminate potential market manipulation.”
The California Energy Commission has held hearings to explore this proposal and others, and officials who are learning how complex the oil refinery industry is now have more questions than answers, Reheis-Boyd said.
The state will need to decide whether its refineries would operate based on profit margins or absorb losses to store more gas in tanks at oil refineries so that when gas prices spike, the state could release more fuel on the market, she said.
An oil refinery near the Port of Long Beach, Calif., on Feb. 26, 2025. John Fredricks/The Epoch Times
The number of refineries in California has dropped from 40 in 1980 to nine, not including the impending Phillips 66 closure, Reheis-Boyd said.
There are no refineries for sale in California, and “no one is going to build another one,” Reheis-Boyd said. “They’re not selling the refinery; they are closing it.”
California is considered an “energy island” with no pipelines crossing the Sierra Nevada, she said.
‘Expensive Lesson’
Skip York, chief energy strategist at energy consultant Turner Mason & Co., told The Epoch Times the state is considering owning refineries and other proposals as a way to guarantee a stable supply of gasoline.
Neither the state nor consumers can afford to lose any refineries, which would cause a supply crunch and a spike in gas prices, York said.
“Demand isn’t going to drop … so you’re going to have to supply that demand another way,” he said.
He said he hasn’t ruled out the idea that if the state owned refineries, officials could decrease gas supplies and raise prices to compel more people to move into electric vehicles.
“You can’t dismiss that possibility,” he said. “There is nothing that says the state couldn’t do that.”
California plans to phase out the sale of all new gasoline-powered cars by 2035.
Price Blame
Mike Umbro, an energy consultant who owns Premier Resource Management and runs a nonprofit organization called Californians for Energy and Science, which studies energy, environment, and economics, told The Epoch Times that the state takes in more revenue from gas sales than oil companies make in profit.
Umbro said Newsom and some Democratic lawmakers are “ripping off” people at the pump while blaming Big Oil for gouging consumers.
Umbro believes reopening California’s oil fields and cutting imports could save $30 billion and save good-paying American jobs.
Daniel Villasenor, a spokesman for the governor, said in an April 14 email to The Epoch Times that in the two years since Newsom signed “California’s gas price gouging law,” the state has avoided severe gasoline price spikes, “saving Californians billions of dollars at the pump.”
The law established a state-level independent petroleum watchdog to hold Big Oil accountable, Villasenor said in the email.
“Governor Newsom has done more than any other Governor in recent history to tackle the challenge of rising gas prices—despite what the oil industry and its allies say,” he said.
I am running a few minutes late; my previous meeting is running over.
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