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Released July 07, 2025 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--As California energy leaders mull rules on refineries, the rest of the nation is retooling, though the balance between processing capacity and domestic needs is adequate, IIR Energy found.
The California Energy Commission recently sent a 24-page letter to Governor Gavin Newsom, outlining measures that may be necessary to keep ample supplies of gasoline in the state.
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. Combined with taxes and fees, California has the highest state average for the retail price of gasoline in the nation.
As of June 30, California drivers were paying $4.58 for a gallon of regular unleaded, compared to a national average of $3.18.
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 Corporation (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) Benicia facility, prompting shelter-in-place advisories. The plant, except the fluid catalytic cracking unit (FCCU), was restarted on May 8, according to Industrial Info. 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 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.
California may be something of an example of national trends, said Hillary Stevenson, vice president for energy intelligence at IIR Energy.
"Nation-wide, we're not expecting any grassroot developments any time soon," she said. "But brownfield developments will help keep the U.S. refining sector in a healthy condition."
Among the larger expansions on tap is work at the Garyville refinery in Louisiana. Operated by Marathon Petroleum Corporation (Findlay, Ohio), the facility is one of the largest in the nation with a capacity of 565,000 BBL/d.
Starting next year, Marathon plans to expand the capacity of two crude-oil trains by between 15,000 BBL/d and 20,000 BBL/d each, all while increasing feedstock flexibility. Subscribers to Industrial Info's GMI Petroleum Refining Project and Plant databases can click here for a detailed project report and click here for the plant profile.
IIR Energy sees robust maintenance spending to continue amid an aging refining fleet and inflation. U.S. and Canadian refiners are expected to spend $3 billion in 2025 on maintenance and $2.7 billion in 2026, Stevenson said. In PADD 3 alone, the refinery-rich district along the U.S. Gulf Coast, around 1 million BBL/d is expected to go offline for maintenance during the first quarter of 2026.
Regulations have been tough for the industry, but the return of pro-fossil-fuels President Donald Trump could create some tailwinds for U.S. refiners. Around $4 billion in high-probability projects are expected to kick off in 2025 at U.S. and Canadian refineries.
The EIA, in a separate report, estimated that total U.S. refinery capacity is more or less unchanged from last year, with only small-scale upgrades made. Industrial Info's Unit Database captured 70,000 BBL/d of unit expansions at U.S. atmospheric distillation units in 2024.
In terms of grassroot or brownfield expansion, more units have been planned and later cancelled than are currently proposed, yet there's a long-tail of planned projects that remain in planning phases.
"Our needs are being met," Stevenson said. "Even as rules and regulations change, the nation has a healthy refining sector."
The EIA estimated the total U.S. refinery capacity at 18.4 million BBL/d as of January 1. Following the closure of LyondellBasell Industries NV's (Rotterdam, Netherlands) Houston refinery among other capacity changes, Industrial Info was tracking 17.78 million BBL/d of U.S. refining capacity as of June 2025.
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 more than 200,000 current and future projects worth $17.8 Trillion (USD).
The California Energy Commission recently sent a 24-page letter to Governor Gavin Newsom, outlining measures that may be necessary to keep ample supplies of gasoline in the state.
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. Combined with taxes and fees, California has the highest state average for the retail price of gasoline in the nation.
As of June 30, California drivers were paying $4.58 for a gallon of regular unleaded, compared to a national average of $3.18.
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 Corporation (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) Benicia facility, prompting shelter-in-place advisories. The plant, except the fluid catalytic cracking unit (FCCU), was restarted on May 8, according to Industrial Info. 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 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.
California may be something of an example of national trends, said Hillary Stevenson, vice president for energy intelligence at IIR Energy.
"Nation-wide, we're not expecting any grassroot developments any time soon," she said. "But brownfield developments will help keep the U.S. refining sector in a healthy condition."
Among the larger expansions on tap is work at the Garyville refinery in Louisiana. Operated by Marathon Petroleum Corporation (Findlay, Ohio), the facility is one of the largest in the nation with a capacity of 565,000 BBL/d.
Starting next year, Marathon plans to expand the capacity of two crude-oil trains by between 15,000 BBL/d and 20,000 BBL/d each, all while increasing feedstock flexibility. Subscribers to Industrial Info's GMI Petroleum Refining Project and Plant databases can click here for a detailed project report and click here for the plant profile.
IIR Energy sees robust maintenance spending to continue amid an aging refining fleet and inflation. U.S. and Canadian refiners are expected to spend $3 billion in 2025 on maintenance and $2.7 billion in 2026, Stevenson said. In PADD 3 alone, the refinery-rich district along the U.S. Gulf Coast, around 1 million BBL/d is expected to go offline for maintenance during the first quarter of 2026.
Regulations have been tough for the industry, but the return of pro-fossil-fuels President Donald Trump could create some tailwinds for U.S. refiners. Around $4 billion in high-probability projects are expected to kick off in 2025 at U.S. and Canadian refineries.
The EIA, in a separate report, estimated that total U.S. refinery capacity is more or less unchanged from last year, with only small-scale upgrades made. Industrial Info's Unit Database captured 70,000 BBL/d of unit expansions at U.S. atmospheric distillation units in 2024.
In terms of grassroot or brownfield expansion, more units have been planned and later cancelled than are currently proposed, yet there's a long-tail of planned projects that remain in planning phases.
"Our needs are being met," Stevenson said. "Even as rules and regulations change, the nation has a healthy refining sector."
The EIA estimated the total U.S. refinery capacity at 18.4 million BBL/d as of January 1. Following the closure of LyondellBasell Industries NV's (Rotterdam, Netherlands) Houston refinery among other capacity changes, Industrial Info was tracking 17.78 million BBL/d of U.S. refining capacity as of June 2025.
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 more than 200,000 current and future projects worth $17.8 Trillion (USD).
