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Released September 17, 2025 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land,
Texas)--California state lawmakers are working to ensure the state has adequate refinery feedstock by allowing the construction of thousands of new oil wells annually after passing a measure during the weekend.
State lawmakers during the weekend passed a handful of bills meant to ensure California has a clean economy while at the same time ensuring that its refineries can keep running.
"While the Trump administration wages attacks on our economy and nation-leading climate progress, California is charting the future--cutting costs, building a stronger economy, protecting our climate progress, and proving our progress can't be stopped," said Senate President Pro Tempore Mike McGuire.
A state Senate measure, SB-237, would permit 2,000 new oil wells annually in oil-rich Kern County starting in 2026. With that, legislators want to secure about 25% of its feedstock with domestic supplies.
"Southern California on-shore oil production is typically a heavy, sour barrel, which is well-matched to replace similar quality Canadian or Ecuadorian import barrels," said Hillary Stevenson, IIR Energy's vice president of Energy Market Intelligence.
In 2023, California ranked third in the nation in terms of refining capacity. The state now faces the prospect of becoming a net importer of refined products after Valero Energy (San Antonio, Texas) in April announced plans to close its Benicia refinery. A fire broke out at a furnace near the fluid catalytic cracking unit on May 5 at the 144,000 barrel-per-day (BBL/d) facility, prompting brief shelter-in-place advisories.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Plant Database can click here for related plant profiles.
Phillips 66 (Houston, Texas) said later that market dynamics in California were in part behind its decision to shut operations at its Los Angeles plants by the fourth quarter.
Should other refiners follow suit, the U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, said California may be forced to import fuels from out-of-state refineries to meet its transportation demands.
The region already faces some of the highest prices at the pump. A pipeline failure in Oregon led to recent spikes at the consumer level, while California in general usually has the highest prices in the Lower 48.
California state laws mandate that refiners make a special blend of gasoline that's less harmful to the environment, but it's more expensive to make. A network of pipelines, meanwhile, connects 14 refineries in the state, though declines in refining capacity leave the state heavily dependent on foreign deliveries to meet demand. Stevenson added, "AGX2-1, which mandates that refiners maintain minimum fuel storage volumes to avoid any supply-side issues, also puts a burden on California refiners, reducing profitability."
According to the EIA, Iraq, Brazil, Guyana and Ecuador combined to supply about 60% of the crude oil refined in the state last year. Drawing in nearly $90 billion in private investments over the last 15 years, authorities in Kern County said SB-237 could be a boost to its balance sheet.
California is the eighth-largest crude oil producer in the United States, but it only accounted for about 2% of the estimated 13.2 million barrels per day in total production last year.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
State lawmakers during the weekend passed a handful of bills meant to ensure California has a clean economy while at the same time ensuring that its refineries can keep running.
"While the Trump administration wages attacks on our economy and nation-leading climate progress, California is charting the future--cutting costs, building a stronger economy, protecting our climate progress, and proving our progress can't be stopped," said Senate President Pro Tempore Mike McGuire.
A state Senate measure, SB-237, would permit 2,000 new oil wells annually in oil-rich Kern County starting in 2026. With that, legislators want to secure about 25% of its feedstock with domestic supplies.
"Southern California on-shore oil production is typically a heavy, sour barrel, which is well-matched to replace similar quality Canadian or Ecuadorian import barrels," said Hillary Stevenson, IIR Energy's vice president of Energy Market Intelligence.
In 2023, California ranked third in the nation in terms of refining capacity. The state now faces the prospect of becoming a net importer of refined products after Valero Energy (San Antonio, Texas) in April announced plans to close its Benicia refinery. A fire broke out at a furnace near the fluid catalytic cracking unit on May 5 at the 144,000 barrel-per-day (BBL/d) facility, prompting brief shelter-in-place advisories.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Plant Database can click here for related plant profiles.
Phillips 66 (Houston, Texas) said later that market dynamics in California were in part behind its decision to shut operations at its Los Angeles plants by the fourth quarter.
Should other refiners follow suit, the U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, said California may be forced to import fuels from out-of-state refineries to meet its transportation demands.
The region already faces some of the highest prices at the pump. A pipeline failure in Oregon led to recent spikes at the consumer level, while California in general usually has the highest prices in the Lower 48.
California state laws mandate that refiners make a special blend of gasoline that's less harmful to the environment, but it's more expensive to make. A network of pipelines, meanwhile, connects 14 refineries in the state, though declines in refining capacity leave the state heavily dependent on foreign deliveries to meet demand. Stevenson added, "AGX2-1, which mandates that refiners maintain minimum fuel storage volumes to avoid any supply-side issues, also puts a burden on California refiners, reducing profitability."
According to the EIA, Iraq, Brazil, Guyana and Ecuador combined to supply about 60% of the crude oil refined in the state last year. Drawing in nearly $90 billion in private investments over the last 15 years, authorities in Kern County said SB-237 could be a boost to its balance sheet.
California is the eighth-largest crude oil producer in the United States, but it only accounted for about 2% of the estimated 13.2 million barrels per day in total production last year.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
