“Valero Refinery Shutdown Looms: Martinez and Benicia Brace for Economic and Energy Fallout”

Valero Energy Corporation has announced plans to potentially shut down its Benicia refinery by the end of April 2026. The company has submitted notice to the California Energy Commission indicating its intent to “idle, restructure, or cease refining operations” at the facility.

Reasons for Potential Closure:

Valero cites high operational costs and stringent environmental regulations in California as primary factors influencing this decision. The refinery has faced regulatory challenges, including a record $82 million fine from the Bay Area Air Quality Management District for air quality violations dating back to 2003.

Economic and Community Impact:

The Benicia refinery employs over 400 workers and contributes significantly to the local economy. City officials estimate that the closure could result in a loss of approximately $10 million annually in revenue, which is substantial for Benicia’s $60 million budget.  Local businesses and community programs that benefit from the refinery’s presence may also be affected.

Potential Effects on Gas Prices:

Experts suggest that the closure of the Benicia refinery, which produces about 9% of California’s gasoline, could lead to an increase in gas prices. Estimates indicate a potential rise of 25 to 30 cents per gallon if the refinery ceases operations without adequate replacement of its output.

Future Considerations:

Valero is evaluating strategic alternatives for its operations in California, including the possibility of converting the Benicia facility to produce renewable fuels. This approach aligns with trends observed in other refineries in the state that have transitioned to renewable energy production.