California Claims Clean Leadership, for Better or Worse

---

Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

---

Summary

California Gov. Gavin Newsom secured hefty financial support for clean programs in his state during a tour overseas. At home, refineries are looking as far away as the Bahamas for refined petroleum products.

---

Nearly $1 Billion from Octopus

Nearly $1 billion from U.K.-based Octopus Energy will support clean technologies in California, the state's governor said during a tour of Europe.

U.S. leaders from the Democratic Party sought to reassure European allies of their steadfast bilateral relationship during a regional tour.

"Strong international partnerships like today's announcement with the state of California strengthens opportunities for U.K. businesses and secures investment for our country," said Ed Miliband, the energy secretary for the United Kingdom.

His comments followed a near-$1 billion financial commitment from Octopus to help California pursue a cleaner agenda. Octopus already has a footprint in the U.S. market, with its 80-megawatt (MW) Nestlewood and the 20-MW Gaucho solar facilities in Texas.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Database can learn more about Octopus Energy--including capacities, investment values and necessary equipment--in a detailed company profile.

California Gov. Gavin Newsom, seen as a contender for the Democratic Party nomination for president in 2028, said his state is claiming a leadership position in climate-friendly projects.

"California is the best place in America to invest in a clean economy, because we set clear goals and we deliver," he said Monday.

Newsom last year said that in 2023, the last full year for which the state has data, California sourced about 60% of its energy from clean resources. His government claimed that made California the largest economy in the world to achieve that feat.

By the Numbers

• $1 billion in clean support from Octopus
• 60% of California's energy is clean
• 290,000 BBL/d shortfall in refinery capacity

Problems at Home?

But those climate initiatives come at a cost. A series of measures targeting the state refinery sector has led to closures, prompting the state to look outside its borders for refined petroleum products.

"We've seen decades of what, in my opinion, has been poor energy policy-making that has made it more difficult to invest (in California)," Mike Wirth, the chief executive officer at Chevron Corporation, said during a January 30 conference call.

A report from the Bloomberg news agency said California secured a cargo of gasoline on January 2 that departed two weeks prior from the Bahamas, traversing the Panama Canal to its destination.

That, along with some of the highest state gasoline taxes in the nation, could add to the price at the pump. The Jones Act of 1929 mandates that ships carrying goods between U.S.-territorial ports must be U.S.-made and -operated. Those vessels, meanwhile, are few and far between, complicating the supply-side challenges in the state.

After receiving its last batch of waterborne crude oil for its Los Angeles Refinery last year, Phillips 66 said it was laying off all-but a small support staff at the facility earlier this year. Combined with Valero's refineries in Benicia, which are set to close in the first quarter, the state will be down some 290,000 barrels per day (BBL/d) in refining capacity, forcing companies to look outside the state for refined petroleum products.

Elsewhere, the state is pushing back against federal plans for a potential lease sale for drilling rights off the coast of California. The federal government said more drilling would support U.S. energy security concerns, deter the reliance on foreign supplies "all while maintaining our commitment to responsible environmental stewardship."

Newsom, however, said he would use every tool at his disposal to thwart drilling off the California coast.

The Trump administration claims executive action from 2025 that outlines goals for energy dominance mute the state's authority. Environmental concerns in California led the state to declare a permanent moratorium for offshore drilling in 1994, and there have been no new leases since then.

Key Takeaways

• California claims climate leadership
• Gov. Gavin Newsom visits NATO allies
• State is importing gasoline

---

About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) 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 more than 250,000 current and future projects worth $30.2 trillion (USD).