Tag: Diesel

California is Running Out of Refineries – And Running Out of Time

With the recent closures of the Valero and Phillips refineries that processed crude oil and the 2023 conversions of Marathon in Martinez and Phillips 66 in Rodeo that are no longer running crude oil, just renewable diesel, California’s remaining six refineries that process crude oil do not have the capacity to produce all that California demands of 58 million gallons of transportation fuel DAILY

From CO2- Coalition- Substack

By Ronald Stein* and Mike Ariza

With no pipelines crossing the Sierra Nevada, California is an energy island, separated from the crude oil supplies and refinery infrastructure of the other continental states. As a result, the state’s transportation fuel needs—for airports, cars, trucks, and ships serving three of America’s busiest ports—must be met by in-state refineries.

With the recent closures of the Valero and Phillips refineries that processed crude oil and the 2023 conversions of Marathon in Martinez and Phillips 66 in Rodeo that are no longer running crude oil, just renewable diesel, California’s remaining six refineries that process crude oil do not have the capacity to produce all that California demands of 58 million gallons of transportation fuel DAILY:

In addition, approximately 5.2 million metric tons of bunker fuel are an annual demand for the ships in three of the busiest Ports in America, located in California.

  • Port of Los Angeles had more than 1,800 vessel arrivals in 2024, which includes cruise and merchant ships.
  • Port of Long Beach handled over 9.6 million container units in 2024, indicating a very high volume of ship activity, plus cruise ships.
  • Port of Oakland, which also handles significant cargo volumes, contributes to the total number of cruise and merchant ships needing fuel.

California policies have reduced the state to six operational crude-oil refineries, forcing it to import 14 to 15 million of the 37 million gallons of gasoline it consumes each day, primarily from Asian countries.

Because of the reduction in transportation fuels being imported to California from Asian refineries, President Trump made the call to waive the Jones Act. This allowed foreign flagged tankers to take fuel receipts from states in the Gulf of America along with the East coast and deliver them via the Panama Canal, to California ports. Normal rules require domestic shipping vessels to be American built, owned, and crewed.

  • A Jones Act waiver is a temporary legal exemption that allows foreign-flagged ships to carry cargo between U.S. ports, i.e., from the Gulf Coast through the Panama Canal, to the West Coast ports in California. Under the Jones Act waiver in the last 3 ½ months foreign flagged tankers have transported more gasoline to California than what has been shipped to the state in the last 15 years combined.
  • The Petroleum Administration for Defense Districts PADD 5 (West Coast) jet fuel inventories normally track between 9 – 11 million barrels on hand. By April 2026 inventories were at 2.6 million and dropping. This was the lowest inventory for that time in more than 23 Years. Then on April 2, 2026, South Korea, California’s largest supplier of jet fuel, announced that they were suspending jet fuel exports. With this announcement and the fact that PADD 5 inventories were getting near historic lows, Southwest Airlines took unprecedented historic action. Southwest chartered a tanker flagged under the Marshall Islands to transport 306,389 barrels of jet fuel from the Valero Pasadena dock in Houston to berths in Los Angeles and Long Beach. In addition to Southwest Airlines’ unprecedented action, in the last 3 ½ months foreign flagged tankers have transported more jet fuel from PADD 1 and PADD 3 to California than the state has received in the last 36 YEARS COMBINED.
  • On August 10, 2026, President Donald Trump approved a 90-day extension of the Jones Act waiver that will allow foreign-flagged vessels to transport critical transportation fuels demanded in California and agricultural commodities between U.S. ports in the Gulf Coast and West Coast from August 17 through mid-November 2026.

California is the 4th largest economy because it has always had sufficient refinery capacity to manufacture the humongous in-state demands for transportation fuels. It is important to note that long term federal waivers will not solve the supply chain of transportation fuels demanded by the 4th largest economy in the world.

The root cause of refineries hemorrhaging out of the state is California state policies. National policy “band aids” cannot provide the long-term solution to a California sponsored hemorrhaging of the in-state refineries needed to manufacture the transportation fuel demands within the state.

With those recent refinery closures of the Phillips in Wilmington and Valero in Benicia and previous conversions of Marathon in Martinez and Phillips 66 in Rodeo that are no longer processing crude oil, just renewable diesel, California must now rely on the importation of transportation fuels that cannot be made in the State, 40% for gasoline demand and 35% for jet fuel and diesel demand.

  1. With the onset of the Iranian war, crude oil supplies being shipped through the strait of Hormuz were cut off to the Asian countries that were supplying California with transportation fuel. This forced the Asian Refineries to reduce their crude oil charge rates. As the crude oil charge rates declined their production rates of the vital fuels for California also declined to the point where they were forced to suspend their shipments to our state. By the first week of April 2026 nearly all outbound fuel shipments were cut off. With transit times across the Pacific Ocean running between 35 – 45 days this set California on a course for a supply shock starting in the last week of May 2026 with subsequent transportation fuel shortages at the terminal and fuel station levels starting in mid to late June 2026.
  2. To help California, Gulf refineries bumped up their production rates from a normal of 95-96% to near 98% of capacity. Some refineries also deferred their scheduled 1st and 2nd quarter maintenance shutdowns known as turnarounds to keep production online. Despite the slight increase in refinery rates most of the fuel that has been supplied to California has come from Petroleum Administration Defense District 1 (PADD 1) from the Gulf Coast and PADD 3 from the East Coast. In essence, California policies have caused the state to tap into other national military reserves. Refineries deferring their scheduled turnarounds is hazardous. Turnarounds are scheduled for a reason. Every day of delay further increases the possibility of extended downtimes due to equipment fouling or uncontrolled shutdowns due to equipment failure.

California State policies and economics have caused most of the in-state refineries to close over the last few decades and cease doing any manufacturing in the State which directly relates to transportation fuel shortages. The remaining seven refineries do not have the capacity to manufacture the supply chain demands for 58 million gallons a day of transportation fuels, and the bunker fuel demands of ships at 3 of the busiest ports in America located in California.

California is continuously increasing its reliance on costly foreign fuel imports from major polluting foreign refineries that ship those fuels long distances for 30 to 45 days across the Pacific Ocean by polluting tankers before reaching California ports. Because California’s unique environmental regulations require highly specialized fuel blends, and the domestic tanker fleet is too thin to fulfill its immense volume requirements, the state will be forced to look abroad. Refiners and marketers like those in the California Fuels & Convenience Alliance will likely pivot to importing replacement components from international markets, leaving California more exposed to global supply shocks and high replacement costs. However, given the current global supply strains, it is unlikely that they will find replacement transportation fuel sources. This will most likely lead to supply shocks within the state and the strong possibility of shortages of the daily transportation fuels that are demanded within the State.

Governor Newsom has received three letters from Chevron, Marathon, and PBF, owners of six of the remaining seven refineries in the state. All three letters state that if California refuses to negotiate with them on the newly proposed Cap and Invest amendments that were drafted by the California Air Resources Board (CARB), then they will seriously consider shuttering their operations and leaving the state like Valero did.

California’s Governor, Legislatures, Senators and Representatives must immediately implement plans to support the retention of the 7 remaining refineries. If these refiners shut down, then no amount of waiver tankers will be able to prevent current shortages from becoming humongous catastrophic shortages. These shortages will be of historical proportions. They will affect Nevada, Arizona, and if the ports are shut down, they will reach well into the center of the nation.

California is not proactively supporting the reanimating of the closed Valero Refinery in Benicia or the closed Phillips Refinery in Wilmington. In addition, California government is not making the necessary policy changes to avert the hemorrhaging loss of one or more of the remaining California Refineries.

We strongly encourage the President to immediately invoke the Defense Production Act (DPA) of 1950 which is a United States federal law that gives the President emergency powers to control domestic industries and private businesses. It ensures the nation has enough industrial resources and supplies for national defense, energy infrastructure, and major emergencies.Please share this information with teachers, students, and friends to encourage Energy Literacy conversations at the family dinner table.

Click this Link to Sign up for Energy Literacy from Ronald Stein

Originally published at America Out Loud, August 24, 2026.

Ronald Stein, P.E., is a CO2 Coalition member, engineer, columnist on energy literacy at America Out Loud NEWS, and advisor on energy literacy for the Heartland Institute and CFACT, and co-author of the Pulitzer Prize-nominated book “Clean Energy Exploitations.” He is also the recipient of an unsolicited Tribute to Ronald Stein from Stephen Heins.

The California Refinery Crisis is a National Security Risk for America

California’s refinery situation represents a significant vulnerability that extends beyond state-level economics to broader U.S. energy security and military readiness.
Energy security is national security, and California’s situation highlights the risks of rapid unilateral shifts without reliable backups

From The CO2 Coalition

By Ronald Stein

California is the 4th largest economy in the world and an “ENERGY ISLAND that is isolated from the other 49 States by the Sierra Mountains. There are no pipelines over those majestic mountains to connect the State to the rest of the country. Thus, California’s in-State refineries have been producing ALL the transportation fuels demanded on the California “Energy Island.”

  • Bunker fuel, about 1 million barrels ANNUALLY for the ships servicing three of the busiest Ports in America, located in California.
    • Port of Los Angeles had more than 1,800 vessel arrivals in 2024, which includes cruise and merchant ships.
    • Port of Long Beach handled over 9.6 million container units in 2024, indicating a very high volume of ship activity, plus cruise ships.
    • Port of Oakland, which also handles significant cargo volumes, contributes to the total number of cruise and merchant ships needing fuel.
  • Jet fuel: California has over 2,400 airports and aviation facilities, including 9 international airports and 30 major military airports. The demand is 13 million gallons of aviation fuel DAILY. Several of those airports have direct pipelines to local refineries. In 2019, California consumed 16.7% of the national total of jet fuel, making it the largest consumer of jet fuel in America.
  • Gasoline: For its 30 million vehicles, California is the second-largest consumer of motor gasoline among the 50 states, consuming 42 million gallons DAILY of gasoline, just behind Texas.
  • Diesel: Diesel fuel is the second largest transportation fuel used in California, consuming 10 million gallons DAILY of diesel to support the state’s trucking of products from 3 of the busiest shipping ports in America.

California’s regulatory environment has created a refining capacity vacuum that global markets are rushing to fill, as regional policy decisions are creating international market opportunities and reshaping geopolitical energy dynamics.

Liquid transportation fuels remain essential for sectors that are difficult to electrify. Aviation still depends on jet fuel, global shipping requires bunker fuel, heavy transport, construction, and the petrochemical industry continues to rely on refined petroleum products. Diesel and jet fuel, and petrochemical feedstocks, will remain crucial for decades, even with reduced demand for gasoline from electric vehicles. If local refining capacity decreases in California while demand persists, markets will respond by seeking transportation fuels elsewhere.

It must be remembered that crude oil, by itself, is useless black tar unless you build a multi-billion-dollar refinery to break it down to produce various types of transportation fuels and oil derivatives that are the basis of virtually all the products in our materialistic world.

California’s environmental regulations and aging infrastructure are inadvertently triggering a worldwide refinery construction boom. There will be economic consequences for California consumers as domestic refining capacity shrinks and import dependence grows. The paradox of California’s environmental policies and California’s emissions reductions may be increasing the global carbon footprint through longer supply chains.

In the future, 181 new refinery units that are planned or announced in Africa, Asia, and the Middle East will be providing transportation fuels to California’s 9 international airports, 30 major military airports, and 3 of the largest shipping ports.

These modern refineries in other countries are designed to operate on a massive scale, process multiple types of crude oil, and export transportation fuels worldwide. Tanker transport allows refined transportation fuels to reach major consumption centers, including ports such as the Port of Los Angeles, the Port of Long Beach, and the Port of Oakland.

As California’s refining capacity continues to decline, the California transportation fuel demands for its shipping ports, airports, cars, and trucks are among the highest in the nation and will be increasingly imported from refineries in Africa, Asia, and the Middle East.

California, the 4th-largest economy in the world, with growing dependence on transportation fuels produced at foreign refineries from refined crude oil, will pose a national security risk to the entire country.

California has closed 2 refineries, and more closures are on the way as the California Air Resources Board (CARB) is tightening up the regulations on emissions that may drive the remaining 6 refineries in the State to EXIT to more business-friendly States.

The 4th largest economy in the world NEEDS new refineries to process crude oil, to be built IN CALIFORNIA.

Energy “REALITY” tells us that we need refineries to convert that useless black tar into usable transportation fuels and products:

  • Planes, ships, trucks, and cars do not run on raw crude oil; they run on transportation fuels manufactured FROM crude oil by multi-billion-dollar refineries.
  • With no pipelines over the Sierra Mountain, the new refinery in Brownsville, Texas, will be useless to the California Energy Island that demands in-state refineries to provide transportation fuels for 30 major military locations, 9 international airports, 3 of the busiest ports in America, and fuels for the trucks that transport imported products to the rest of America.
  • Wind turbines and solar panels ONLY generate electricity, but CANNOT make any of the more than 6,000 products that are based on the oil derivatives manufactured out of raw crude oil, nor can wind and solar make any transportation fuels for the military, airports, merchant ships, automobiles, and trucks.
  • The world is not dependent on raw natural fossil fuels, but has become dependent on the products and transportation fuels MADE FROM oil, the same products and transportation fuels that Wind and Solar CANNOT make!
  • The world needs MORE REFINERIES to process that useless black tar into usable transportation fuels and products for life as we know it.

Collectively, the closure of the Phillips refinery in Southern California and the Valero refinery in Northern California provided about 17% of the state’s crude oil processing capacity to provide transportation fuels demanded in California. Thus, transportation fuel shortages are imminent for California, and it will be importing those transportation fuels from Africa, Asia, and the Middle East.

The supply chain of fuels and products refined from raw crude oil will face severe imbalances, most likely leading to higher costs and shortages for future generations.

With 99.5% of the 8 billion people on this planet Earth living outside the borders of California, CARB is solidifying California’s 4th largest economy in the world as a national security risk for America, as the State will be importing transportation fuels from foreign-based refineries to run its 30 military airports and 9 international airports.

Be sure to watch and listen to the Epoch Times interview from April 4, 2026:

The California Refinery Crisis: This author, Ronald Stein, addresses questions from the Chief Editor of The Epoch Times and TV Host of California Insider, Siyamak Khorrami.

Originally published on America Out loud News on May 11, 2026.

Ronald Stein, P.E. is a CO2 Coalition  member, engineer, energy consultant, speaker, author of books and articles on energy literacy, environmental policy, and human rights, and Founder of PTS Advance, a California based company.

China’s Green Leap Leaves AEP Confused

Before AEP gets too excited, maybe he should consider a few facts

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

The clownish AEP has lost the plot again!

The existential threat to Saudi Arabia and the OPEC cartel comes from China, not from net zero or from green deals in the West.

Chinese sales of petrol and diesel cars fell 20pc in absolute volume terms in February from a year earlier. Sales of plug-in electric vehicles kept rising explosively and reached a record 32pc of the market for standard passenger cars.

At the current pace, EV sales in China will hit eight million this year, helped by the proliferation of battery-swapping stations. Rather than charging your own car, you do an instant swap. No need to wait. No need for charge-points everywhere.

Sales have surged despite the elimination of subsidies at the end of last year.  China’s best-selling EV is the BYD Song Plus, which retails for about £22,000. Number two is the smaller Wuling Mini. It starts at around £4,000 (not a misprint).

“They are producing cheap EVs for the mass market, which is still completely lacking in the West. It is absolutely taking off,” said Lord Adair Turner, chairman of the global Energy Transitions Commission (ETC).

The consensus forecast until recently was that EV penetration would reach 40pc of Chinese sales by 2030. That threshold could be crossed as soon as this year if manufacturers can produce fast enough to meet the demand.

https://www.telegraph.co.uk/business/2023/04/07/chinas-green-leap-forward-is-a-nightmare-for-saudi-arabia-a/

Before AEP gets too excited, maybe he should consider a few facts:

1) BEVs last year still only accounted for 16% of car sales in China. As in this country there is a niche for EVs, but that does not mean everybody is going to go out and buy one.

In particular most urban Chinese live in high rise apartments, so will find EVs pretty much useless. Similarly rural Chinese will also find EVs unfit for purpose, because of the lack of any charging infrastructure, the long distances involved and the rough roads.

2) Car sales in China have grown rapidly, even within the last decade. The number of cars on the road in China will carry on increasing for years to come, and many of these will be petrol.

https://tradingeconomics.com/china/total-vehicle-sales

3) He claims that “sales of petrol and diesel cars fell 20pc in absolute volume terms in February from a year earlier”. But to just cherry pick one month is deceitful. As Trading Economics report, there has been a sharp decline in petrol/diesels in the last couple of months because of the expiration of tax credits at the end of last year.

4) Oil consumption has been  rising steadily for the last two decades, despite the rise of EVs and renewables:

BP Energy Review

5) Far from importing less oil from Saudi, China is allowing Saudi Aramco to build a much  needed  oil refinery in China, which will import two thirds of its oil from Saudi.

6) Xi Jinping has also  been eager to ally with Saudi Arabia, in order  to ensure a steady flow  of the black stuff. That was why the two  countries signed a wide ranging agreement last December, to cooperate on diplomatic, security, economic and energy issues.

That is also why China formally brought the Saudis and Iranians together last month, in order to build up ties with the Middle Eastern oil producers.