Business
Is California government considering oil refinery takeovers? Yes, it is
Russia. China. Venezuela. Iran. More than a dozen countries make gasoline at state-owned refineries.
Could California be next on the list?
California policymakers are considering state ownership of one or more oil refineries, one item on a list of options presented by the California Energy Commission to ensure steady gas supplies as oil companies pull back from the refinery business in the state.
“The state recognizes that they’re on a pathway to more refinery closures,” said Skip York, chief energy strategist at energy consultant Turner Mason & Co. The risk to consumers and the state’s economy, he said, is gasoline supply disappearing faster than consumer demand, resulting in fuel shortages, higher prices and severe logistical challenges.
Gasoline demand is falling in California, albeit slowly, for two reasons: more efficient gasoline engines, and the increasing number of electric vehicles on the road. Gasoline consumption in California peaked in 2005 and fell 15% through 2023, according to the Union of Concerned Scientists.
Electric vehicles, including plug-in hybrids, now represent about 25% of annual new car sales. By state mandate, new sales of gasoline cars and light trucks will be banned starting in model year 2035.
The drop in demand is causing fundamental strategic shifts among the state’s major oil refiners: Chevron, Marathon, Phillips 66, PBF Energy and Valero.
Already, two California refineries have ceased producing gasoline to make biodiesel fuel for use in heavy-duty trucks, a cleaner-fuel alternative that enjoys rich state subsidies. More worrisome, the Phillips 66 refinery complex in Wilmington, just outside Los Angeles, plans to close down permanently by year’s end.
That leaves eight major refineries in California capable of producing gasoline. The closure of any one would create serious gasoline supply issues, industry analysts say. But both Chevron and Valero are contemplating permanent refinery closures.
The implications? “Demand will decline gradually,” York said, “but supply will fall out in chunks.” What’s unknown is how many refineries will close, and how soon, and how that will affect supply and demand.
That puts the state in a tough position, according to York. “Even if you had perfect foresight, it would be hard to get the timing right.”
A state refinery takeover seems like a radical idea, but the fact that it’s being considered demonstrates the seriousness of the supply issue.
It’s one of several option laid out by the California Energy Commission, which is fulfilling a legislative order to find ways to ensure “a reliable supply of affordable and safe transportation fuels in California.”
The options list is disparate: Ship in more gasoline from Asia; regulate refineries on the order of electric utilities; cap profit margins; and many more.
The list was due to be transformed into a formal transition plan by Dec. 31, 2024, but six weeks later no plan has been issued. Therefore, it’s not yet clear what the state response will be if another refinery announces a shutdown this year or next.
California is known as a “gasoline island” lacking the kind of multistate logistics network through most of the continental U.S. that can help alleviate supply shocks. No pipelines exist to feed gasoline in from other states. Ocean shipments from the refinery-rich Gulf States are restricted by an antiquated federal law known as the Jones Act. Gasoline imports add up to only 8% of California supply. The other 92% is nearly all produced at California refineries.
Further complicating matters: the special blends of gasoline required in California. Those required formulations have gone a long way toward reducing air pollution. But they also drive up gasoline prices and raise the risk of shortages, because little such gasoline is produced outside California.
The Western States Petroleum Assn. lobby group warns that state involvement in refinery ownership or management would be difficult.
“This is a very complex and hard business to run,” the group said in a statement. “There are commercial barriers and technical barriers that take a comprehensive and holistic understanding of the industry, and how it works.”
Asked about the potential for state-owned refineries, Gov. Gavin Newsom’s office referred questions to the state energy commission but issued a statement saying California is “is engaged in meaningful and thoughtful policy work to successfully manage our transition away from fossil fuels over the next 20 years, not overnight.”
In a statement, the energy commission acknowledged that “there are many challenges to overcome” with a state-owned refinery, “including the high cost to purchase and operate, the skilled labor and expertise necessary to manage refinery operations, and how the refinery would fit into the state’s transition away from petroleum fuels.”
James Gallagher, the Assembly Republican leader from Yuba City, says California isn’t moving quickly enough to address potential gasoline shortages.
“We’re starting to lose refineries because we’ve made it so expensive and impossible to operate in California,” he said. “Now, after we’ve chased them off, we’re talking about taking them over to ensure there’s some supply. We’re moving toward price controls and government takeover of industries. That’s never worked very well in the history of the world.”
State Senate Minority Leader Brian Jones (R-Santee) agreed: “The state has no business being in the oil refinery business,” he said.
Their Democratic counterparts, Assembly Speaker Robert Rivas (D-Hollister) and Senate Majority Leader President pro Tempore Mike McGuire (D-Sonoma), declined to be interviewed.
Talk of further refinery closures over the next couple of years is heating up. In a conference call with investors last year, shortly after the Phillips 66 announcement, Valero Chief Executive Lane Riggs responded to concerns about the company closing either of its two California refineries.
“All options are on the table,” he said. “Clearly, the California regulatory environment is putting pressure on operators out there and how they might think about going forward with their operations.”
Chevron, a California company since 1879, last year announced that it was moving its headquarters to Texas. The company has considered ceasing production at one or both of its California refineries, the Wall Street Journal recently reported, which Chevron confirmed in a statement to The Times.
“Recent California policies, like banning the sale of new internal combustion engine vehicles by 2035, the potential tax/penalty on refinery profits and the potential new minimum storage requirement are all headwinds to our business and erode our confidence going forward,” Andy Walz, Chevron’s president of downstream, midstream and chemicals, said in the statement.
Jones said while he’s not sure the state-owned refinery option is a serious proposal, it’s on the options list, and the looming supply issue is real. “I’m not sure all Californians have grasped the impending urgency of the situation,” he said.
“I think what we probably need is to build another refinery here in the state,” Jones said. Otherwise, when refineries close, gasoline demand would have to be met by gasoline imports, mostly by ship, from Asia.
“People freak out about the environmental impacts of crude oil shipments,” Jones said. “But no one’s freaking out about the environmental impacts of gasoline imports.”
The luxury shopping center in Pacific Palisades will reopen next month after more than $100 million in renovations forced by the January 2025 wildfire that devastated the Los Angeles neighborhood.
Palisades Village will reopen Aug. 15, owner Rick Caruso announced Wednesday. The outdoor center survived the blaze that destroyed homes and other businesses but needed refurbishment to eliminate contaminants that the fire could have spread.
Crews are putting finishing touches on mall buildings after tearing them down to the studs, treating the wood and rebuilding the walls, Caruso said.
“Everybody’s working, and stores are moving their products in,” he said. “It’s a really cool feeling that people have really locked arms and are working together.”
An electrician installs lighting for a restaurant at Rick Caruso’s Palisades Village on Thursday. The shopping center is scheduled to reopen mid-August.
(Myung J. Chun / Los Angeles Times)
Pacific Palisades resident Allison Polhill, who is rebuilding the home of 30 years that her family lost in the blaze, said she is “thrilled” at the prospect of returning to the mall she used to frequent. Its comeback is a boost for the community, she said.
“Every single step that we make to reopen our commercial corridors is going to bring more people back into the Palisades,” said Polhill, who expects to move back into her home at the end of August.
A total of 6,822 structures were destroyed in the Palisades fire, including more than 5,500 residences and 100 commercial businesses, according to the California Department of Forestry and Fire Protection.
Caruso previously attributed the mall’s survival to the hard work of private firefighters and the fire-resistant materials used in the mall’s construction.
The $200-million shopping and dining center opened in 2018 with a movie theater and a roster of upmarket tenants, including Erewhon, which may be the only grocer in the heart of the fire-ravaged neighborhood when it opens.
Caruso’s company was able to fill the mall with tenants despite the long shutdown.
Palisades Village is 99% leased, with the majority of tenants returning, said Jackie Levy, chief financial and revenue officer. Nearly one-third of the shops and restaurants are new to the property.
A firefighter carries a hose back to his rig while walking through a destroyed home from the Palisades fire in Pacific Palisades on Jan. 7, 2025.
(Genaro Molina / Los Angeles Times)
Last year, Pacific Palisades-based fashion designer Elyse Walker said she would reopen her eponymous store in Palisades Village after losing her 25-year flagship location on Antioch Street to the inferno.
Other neighborhood shops destroyed in the fire that are reopening at the mall include K Bakery and Loomey’s Toys, which caters to children up to age 12 and used to be across the street from Palisades Elementary Charter School.
“It’s been a journey and I’m excited because I wasn’t sure that there was going to be a place to come back to,” said toy store owner Amanda Rastegar. “Hopefully we can bring some of that magic back.”
Rastegar’s home in the Palisades survived but was damaged by the fire. The family returned about eight weeks ago. Her last memory of the fire was a burning supermarket.
“I just couldn’t wrap my brain around what was happening,” she said. “By the time I left, Gelson’s was on fire.”
Among the returning tenants is Angelini Ristorante & Bar. Well-known Los Angeles chef Gino Angelini said he will be in the kitchen next month for a return of the Italian restaurant.
“We won’t do a big celebrity open,” he said. “We want to have a very soft opening and see our customers come back.”
Construction takes place at Rick Caruso’s Palisades Village on Thursday. The shopping center is scheduled to reopen mid-August.
(Myung J. Chun / Los Angeles Times)
An elaborate celebration would not feel “correct for me,” Angelini said, because the devastation has been “very sad” for so many.
Other new tenants include local chef Nancy Silverton, who has agreed to move in with a new Italian steakhouse called Spacca Tutto. Women’s activewear retailer LESET will open its first West Coast location.
Caruso said he is optimistic that customers will return to the center, even though many Pacific Palisades residents are still dispersed. One tracking system estimated that about 30% of the Village’s customer base was impacted by the fire, he said.
“That means 70% did not get impacted, so there’s a lot of customers still left out there,” Caruso said. Historically, the center drew customers from as far away as Beverly Hills and Calabasas, as well as Malibu, Brentwood and Santa Monica.
He also hopes many will be inspired to visit the revived mall.
“I believe in the goodness of people and I believe that people are going to want to support the Palisades,” he said. “They’re going to want to be there and support the businesses that have had the courage and the heart to reopen.”
Walmart is rapidly expanding its network of electric vehicle chargers designed for customers to use while they shop.
The network could help fill gaps in EV infrastructure in states with greater need for chargers. Walmart, which has more than 5,000 locations in the U.S. and hundreds in California, says more than 90% of Americans live within 10 miles of one of its stores.
The chargers also offer an incentive for customers to choose Walmart — Walmart Plus members will receive a 10% discount off an average price of $0.46 per kilowatt-hour of energy at the company’s chargers.
Walmart chargers are already available at more than 75 locations in 17 states, with Texas boasting the most charging stations, followed by Florida and Arizona.
Matthew Nelson, Walmart’s director of energy policy, said last week on LinkedIn that the network will soon reach 29 states, including California.
“We are delivering on the promise of affordable, reliable and convenient charging,” Nelson said in his post.
According to Walmart’s website, six charging stations are coming to California soon, though the company did not offer a specific timeline.
The chargers will be installed at stores in Antelope, Brea, Fresno, Stockton, Suisun City and Vallejo.
Most charging sites in California will include eight to 16 fast-charging stalls, said Walmart spokesperson Kelsey Bohl.
The company first announced plans in April 2023 to install its own EV chargers at Walmart and Sam’s Club stores, with a goal of installing thousands of chargers by 2030. Partnering with ABB E-Mobility and Alpitronic, it added 25 new charging sites this past May and six more in June.
“Walmart is building a leading retail-integrated EV fast-charging network, focused on delivering an affordable, reliable and convenient charging experience where customers already shop,” Bohl said in an emailed statement. “Customers can charge while they shop, access stations through the Walmart app they already use, and benefit from affordable pricing.”
The charging stations already available include 612 individual charging stalls using 400-kilowatt chargers. Each stall has a dual charging cord with both Combined Charging System and North American Charging Standard connectors. The standard connectors, designed by Tesla, are smaller and lighter than the combined systems.
The primary way to pay for the chargers is through the Walmart app, but the company is also experimenting with built-in credit card readers to allow those without the app to use the stations.
Customers can check charger availability on the Walmart app. The company said the chargers will be available 24 hours a day.
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
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