California is losing one of its nine remaining gasoline refineries by October, impacting regional gasoline and fuel prices. The closure, driven by new refinery regulations and a tightening Low Carbon Fuel standard, could lead to further refinery shutdowns and higher costs for consumers.
As reported by The Center Square:
California is set to lose one of its nine remaining gasoline refineries by October, calling the security of its gasoline supplies into question.
With much of Arizona and Nevada relying on California for gasoline, the closure could have a broad regional impact on prices for gasoline and other products created by the refinery such as diesel and jet fuel.
Phillips 66 announced the closure of its Los Angeles facility, which accounts for 8.57% of the state’s remaining refining capacity, last year after the passage of new refinery regulations.
The governors of Arizona and Nevada, a Democrat and Republican respectively,pleaded with the California Gov. Gavin Newsom to not sign the new legislation, which lets the state require refiners carry more inventory on hand — and spend billions of dollars on storage to do so — and have final say over when refineries are allowed to shut down for safety or maintenance reasons.
“It is evident that increased regulatory burdens on refiners and forced supply shortages will result in higher costs for consumers in all of our states,” wrote Arizona Gov. Katie Hobbs and Nevada Gov. Joe Lombardo in their letter to Newsom. “With both of our states reliant on California pipelines for significant amounts of our fuel, these looming cost increases and supply shortages are of tremendous concern to Arizona and Nevada.”
With Newsom having called the special session of the legislature to pass these regulations, there was little surprise that he signed them into law.
But Hobbs and Lombardo’s fears are already materializing.
After investigators blocked refinery repairs in February following a fire amid maintenance-related activity, gas prices in California, Arizona and Nevada rosemarkedly, demonstrating the states’ reliance on California refineries.
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