SACRAMENTO — Environmental justice, climate and refinery community groups urged caution today as the California Energy Commission laid out their approach to stabilizing supply and preparing for transition amid refinery closures.
“Big Oil is manipulating supply issues to shakedown taxpayers and maximize their profits,” said Darryl Molina Sarmiento, executive director of Communities for a Better Environment. “The California Energy Commission’s focus on targeted actions that stabilize supply, smooth price spikes, and address impacts of refinery closures on workers and communities is important. We urge all California lawmakers to reject the oil industry efforts to rollback critical health, safety, and environmental protections.”
In the past year, two California refineries have announced plans to close: Phillips 66 in Wilmington and Valero in Benicia. As more Californians choose electric and more fuel efficient vehicles, demand for gasoline has declined. A study by the Union of Concerned Scientists showed that annual gasoline consumption per person in California dropped from almost 450 gallons per year in 2005 to below 350 gallons per person in 2024.
Last month, over 30 groups submitted a letter expressing growing concern that fossil fuel companies are using refinery closures to exert pressure on state leaders for financial and regulatory concessions — despite years of record profits, shareholder payouts and documented violations of health and safety regulations.
“Greenlighting tens of thousands of new oil and gas wells with a single environmental review, further pollutes the air and water in some of California’s most overburdened communities and deepens our dependence on fossil fuels. The oil industry engineered these supply challenges to exact policies that will allow them to continue fleecing California taxpayers and consumers, perfectly timed to coincide with cap and trade reauthorization and, as a bonus, to advance their dirty drilling goals in Kern County,” said Dan Ress, senior attorney at the Center on Race, Poverty & the Environment. “However, this challenge is also an opportunity, and we call on lawmakers and the Governor to seize this opportunity to take proactive action to address the true crisis of climate change while also cleaning up the air in the nation’s worst airshed.”
“Big Oil is teaming up with shipping lobbyists to once again put corporate profits ahead of public health,” said Davina Hurt, California policy director with Pacific Environment. “California can stabilize fuel supply without sacrificing public health. The At-Berth Rule is a critical safeguard, reducing toxic ship exhaust and cutting cancer risks by 55% for working families in port communities.”
Despite multi-million dollar ad runs claiming otherwise, data released earlier this week by the California Energy Commission shows that oil refiners’ gross profit margins rose to 97 cents per gallon in April, double the national distribution margin.
“Refineries are closing from California to Texas. Governor Newsom and California legislators must act now to ensure we never find ourselves in this hostage situation again,” said Faraz Rizvi, campaign and policy manager with Asian Pacific Environmental Network. “Oil companies can’t be allowed to abuse notices of closure to shakedown California taxpayers. The Energy Commission is wise to chart a long term vision for the energy transition and recognize the need for stronger closure requirements. California must require that oil companies disclose cleanup costs, and develop full remediation plans for toxic sites as part of closure.”
The California Energy Commission, Governor’s Office and the Legislature are expected to finalize details in the coming months as related proposals take shape in the legislature.
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Pacific Environment works to stop climate change and ensure healthy ecosystems around the Pacific Rim for the benefit of people and our planet. We campaign to stop climate change by working to fast-track key industries toward zero carbon emissions. We focus on major global industries that have received less public attention but whose carbon emissions are significant and still growing: the maritime shipping and the petrochemical (plastics) industries.
