Latest news with #Benicia
CBS News
3 days ago
- Business
- CBS News
Benicia prepares for possible closure of Valero refinery, its largest employer and top taxpayer
The city of Benicia is bracing for a major economic shift as it prepares for the possible closure of the Valero Refining Company, the city's largest employer and primary source of tax revenue. "Valero represents in direct contributions to our economy between $10 and $12 million a year," said Benicia Mayor Steve Young. That amount accounts for roughly 20% of the city's $60 million annual budget. If Valero shutters its operations next year, the financial hit could be even greater, as other businesses that depend on the refinery, such as restaurants, hotels, and service providers, may also be forced to close. "They'll be impacts to restaurants and hotels," Young said. "Charitable contributions — they give a couple of million bucks a year to non-profits, sports teams." With potential cuts to city programs and staff on the horizon, Mayor Young is working to explore alternatives to replace the lost revenue. He's also lobbying to delay the refinery's closure. "What I'm trying to do is buy some time," he explained. "If we can delay this closure for three years and give ourselves a chance to start talking about what comes next and what type of development would be best to try to replace what's happening here and continue to operate and give us some revenue in the meantime, that would be the best of all worlds. But it's sort of out of our hands." Benicia is not alone in its complex relationship with the oil industry. Like other refinery communities such as Richmond and Martinez, Benicia residents have long balanced economic benefits with concerns about environmental and public health risks. Marilyn Bardet, a founding member of the Good Neighbor Steering Committee and the Benicia Community Air Monitoring Program, has spent years holding Valero accountable to environmental regulations. "I believe there will be pain," Bardet acknowledged. "But I believe that out of that situation comes really strong feelings for what is our community about." Bardet believes the refinery's closure could ultimately benefit public health. "Our community will be healthier," she said. "Our children will not have as much asthma. The cancer rates may, over a generation, begin to decrease." Still, many in the community are worried about the economic consequences of losing hundreds of high-paying jobs. Some blame city officials and environmental advocates for pushing Valero out. "[Valero is] a benefit for the area," said supporter William Fisher. "And also, there's going to be quite a bit of job loss involved." Mark Felsoci, a longtime worker at the refinery, said in April that many employees have been able to support their families and send their children to college thanks to their jobs at Valero. "Some people just are going to be out of a job because there's not enough places to fill the gaps," Felsoci said. Mayor Young said he's in conversations with both state officials and Valero in hopes of finding a solution, but he is also preparing the city for what lies ahead. "We're a vibrant and resilient community. And we are going to get through this," he said. "We're not going to be declaring bankruptcy or do anything like that." Valero isn't the only oil company planning to shut down operations in California. Phillips 66 has also announced its intention to close its Los Angeles refinery by the end of this year. Experts warn that refinery closures could contribute to higher gas prices across the state. Governor Gavin Newsom and the California Energy Commission are currently working with both companies to explore compromises that would minimize disruptions for both drivers and local economies. The developments follow increasing regulatory pressure on the oil industry. Last year, the Bay Area Air Quality Management District issued its largest-ever penalty against Valero's Benicia facility — an $82 million fine for repeated toxic chemical releases and other violations.
Forbes
13-05-2025
- Business
- Forbes
Job Market Challenges Revealed By Closing A California Oil Refinery
The Valero refinery in Benicia, California, set to close in 2026. In other recent refinery closures ... More in California, few of the laid-off workers have found jobs at anywhere near their refinery wages. Last month, officials with Valero Energy announced they would be closing the company's 170,000 barrels-per-day oil refinery in Benicia, California—a city of 25,000 residents, east of San Francisco. The plant, spread across 900 acres, employs over 400 workers, and is scheduled to close in April 2026. In the weeks since the announcement, state and regional officials have come forward to assure Benicia officials, local residents and workers that there will be a 'just transition.' The workers will be provided with re-training and re-employment services to achieve 'good jobs, quality jobs.' We'll see. In California we've had experience with refinery closures over the past decade and 'just transition'—a popular phrase of the Biden Administration. In these previous refinery closures, despite generous amounts of government funding for retraining and re-employment, few of the laid-off workers were able to obtain new jobs at anywhere near their previous wages, and a high number remained unemployed, more than a year after closure. The Valero and broader refinery story is timely, given the prominent role of manufacturing jobs in today's economic debates. Retraining and reemployment of laid-off refinery and other manufacturing workers have proved to be far more difficult in practice than in the retraining theories of high profile journalists (Thomas Friedman) as well as economists with the Obama and Biden Administrations. The experiences suggest why policymakers might not be so cavalier going forward about refinery closures and other manufacturing closures. The Valero plant is located in a part of East Contra Costa that for the past few decades has been site of several oil refineries. One of these refineries was the Marathon Oil refinery. In October 2020, the Marathon refinery shut down operations and laid off 345 unionized workers. The Contra Costa Country Workforce Development Board immediately responded with a series of re-employment and re-training services. An individualized employment plan was developed for each worker, incorporating skills and goals, and singling out skills that might be transferable to other occupations. Workers who sought training for new occupations were provided with such training at no cost, and also were provided with assistance in identifying and pursuing job openings. Additionally, the Contra Costa Board was assisted in re-employment activities by the California Federation of Labor Unions, which had its own Rapid Response unit, as well as by the United Steelworkers Local 5. Despite these expansive re-employment efforts, only a minority of the laid off workers were able to find jobs at anywhere near their former salaries. The University of California, Berkeley Labor Center tracked the shutdown and re-employment process, and surveyed laid-off workers. The Labor Center final report, issued in April 2023, noted that 14-16 months after the shutdown, 26% of the laid off workers were still not employed. Of those who had found jobs the job paid on average $12 per hour less than the average job at Marathon: the average hourly wage at Marathon was $50 per hour compared to a post layoff average wage of $38 per hour. Though East Contra Costa has been the hub of refinery activities in Northern California, the number of jobs in the remaining refineries was limited, and had been shrinking in the past decade. Much was made of transitioning workers in the 'green economy", but the number of these jobs in the Bay Area was small, and they paid far less than the Marathon and oil and gas jobs. Health care, business services and information technology were growing sectors in Contra Costa, but often not good fits for or of interest to the Marathon workers. Following the Valero announcement, Joe Garofoli, Senior Political Writer with the San Francisco Chronicle, contacted Benicia city officials as well as workers at the Valero plant. The officials emphasized the main role that Valero played in the city's finances: of the city's $60 million general fund budget, Valero contributed $7 million, and contributed another $2.9 million toward the city's enterprise fund for water and wastewater. Garofoli profiled one long time worker at the plant, Mark Felsoci, 63, who had been a crane operator at the plant for 28 years. He was grateful for the job, which had enabled him to purchase a house in Benicia, achieve stable employment, and unlike many other crane operators not commute to multiple work sites. Felsoci told Garofoli that he had few hopes that he or other workers would find similar jobs. He singled out for criticism the idea that the Valero workers could be retrained for green economy jobs. 'These guys that are putting up these solar panels or working in solar fields, they're probably making half of what refinery workers do. They don't get the benefits…You can transition to anything you want, but it's going to pay way less than what you doing before.' Kern County, the center of oil production in California, illustrates the big gap in number of jobs and wage levels between oil and gas jobs and green economy jobs. Kern, which stretches over 8100 square miles in the south Central Valley, is one of the state leaders in green energy. In 2020, it produced a quarter of the state's total renewable energy in 2020, through its network of solar power generators and its 5000 wind turbines in the Tehachapi wind corridor. But this renewable energy production created only 543 jobs in 2020. This number amounted to less than 4% of the 16,223 direct jobs in oil and gas in 2020 (with nearly double that amount for the oil and gas sector counting suppliers and other jobs connected to oil production). The average wage of the direct jobs in oil and gas was $82,017 in 2019 while the average wage for green economy jobs in Kern was 40% lower , at $57,000. Kern County employment in oil and gas has rebounded in the past few years with the rebound in worldwide oil prices. However, Kern officials know the future of oil and gas employment in the county, as well as statewide, is daunting. Since 2015, the oil and gas industry in California has been faced with California state government and politics aimed at phasing out fossil fuels: a lengthy moratorium on permits for new wells, more stringent air quality requirements, and general higher costs of doing business in the state. In announcing its closing, Valero described it as following 'years of regulatory pressure, significant fines for air quality violations, and a recent lawsuit settlement related to environmental concerns.' Similar government policies were singled out by Phillips 66 officials when in October 2024 they announced the closing of the Phillips 66 refinery in Wilmington, Southern California. That refinery accounted for 8% of the state's oil processing. That shutdown will result in layoffs for 600 direct workers by the end of this year. With the politics of oil and gas in California (the industry has been the main villain in state government for years), it may be that the industry can do nothing to reverse the trend of refinery closures. But at least as this process continues, there should be no illusions on any side about what can be expected for many of the laid-off workers--even with the sophisticated and well-funded re-employment systems in place. There should be no illusions about 'just transition.'
Forbes
13-05-2025
- Business
- Forbes
When An Oil Refinery Closes In California
The Valero refinery in Benicia, California, set to close in 2026. In other recent refinery closures ... More in California, few of the laid-off workers have found jobs at anywhere near their refinery wages. Last month, officials with Valero Energy announced they would be closing the company's 170,000 barrels-per-day oil refinery in Benicia, California—a city of 25,000 residents, east of San Francisco. The plant, spread across 900 acres, employs over 400 workers, and is scheduled to close in April 2026. In the weeks since the announcement, state and regional officials have come forward to assure Benicia officials, local residents and workers that there will be a 'just transition.' The workers will be provided with re-training and re-employment services to achieve 'good jobs, quality jobs.' We'll see. In California we've had experience with refinery closures over the past decade and 'just transition'—a popular phrase of the Biden Administration. In these previous refinery closures, despite generous amounts of government funding for retraining and re-employment, few of the laid-off workers were able to obtain new jobs at anywhere near their previous wages, and a high number remained unemployed, more than a year after closure. The Valero and broader refinery story is timely, given the prominent role of manufacturing jobs in today's economic debates. Retraining and reemployment of laid-off refinery and other manufacturing workers have proved to be far more difficult in practice than in the retraining theories of high profile journalists (Thomas Friedman) as well as economists with the Obama and Biden Administrations. The experiences suggest why policymakers might not be so cavalier going forward about refinery closures and other manufacturing closures. The Valero plant is located in a part of East Contra Costa that for the past few decades has been site of several oil refineries. One of these refineries was the Marathon Oil refinery. In October 2020, the Marathon refinery shut down operations and laid off 345 unionized workers. The Contra Costa Country Workforce Development Board immediately responded with a series of re-employment and re-training services. An individualized employment plan was developed for each worker, incorporating skills and goals, and singling out skills that might be transferable to other occupations. Workers who sought training for new occupations were provided with such training at no cost, and also were provided with assistance in identifying and pursuing job openings. Additionally, the Contra Costa Board was assisted in re-employment activities by the California Federation of Labor Unions, which had its own Rapid Response unit, as well as by the United Steelworkers Local 5. Despite these expansive re-employment efforts, only a minority of the laid off workers were able to find jobs at anywhere near their former salaries. The University of California, Berkeley Labor Center tracked the shutdown and re-employment process, and surveyed laid-off workers. The Labor Center final report, issued in April 2023, noted that 14-16 months after the shutdown, 26% of the laid off workers were still not employed. Of those who had found jobs the job paid on average $12 per hour less than the average job at Marathon: the average hourly wage at Marathon was $50 per hour compared to a post layoff average wage of $38 per hour. Though East Contra Costa has been the hub of refinery activities in Northern California, the number of jobs in the remaining refineries was limited, and had been shrinking in the past decade. Much was made of transitioning workers in the 'green economy", but the number of these jobs in the Bay Area was small, and they paid far less than the Marathon and oil and gas jobs. Health care, business services and information technology were growing sectors in Contra Costa, but often not good fits for or of interest to the Marathon workers. Following the Valero announcement, Joe Garofoli, Senior Political Writer with the San Francisco Chronicle, contacted Benicia city officials as well as workers at the Valero plant. The officials emphasized the main role that Valero played in the city's finances: of the city's $60 million general fund budget, Valero contributed $7 million, and contributed another $2.9 million toward the city's enterprise fund for water and wastewater. Garofoli profiled one long time worker at the plant, Mark Felsoci, 63, who had been a crane operator at the plant for 28 years. He was grateful for the job, which had enabled him to purchase a house in Benicia, achieve stable employment, and unlike many other crane operators not commute to multiple work sites. Felsoci told Garofoli that he had few hopes that he or other workers would find similar jobs. He singled out for criticism the idea that the Valero workers could be retrained for green economy jobs. 'These guys that are putting up these solar panels or working in solar fields, they're probably making half of what refinery workers do. They don't get the benefits…You can transition to anything you want, but it's going to pay way less than what you doing before.' Kern County, the center of oil production in California, illustrates the big gap in number of jobs and wage levels between oil and gas jobs and green economy jobs. Kern, which stretches over 8100 square miles in the south Central Valley, is one of the state leaders in green energy. In 2020, it produced a quarter of the state's total renewable energy in 2020, through its network of solar power generators and its 5000 wind turbines in the Tehachapi wind corridor. But this renewable energy production created only 543 jobs in 2020. This number amounted to less than 4% of the 16,223 direct jobs in oil and gas in 2020 (with nearly double that amount for the oil and gas sector counting suppliers and other jobs connected to oil production). The average wage of the direct jobs in oil and gas was $82,017 in 2019 while the average wage for green economy jobs in Kern was 40% lower , at $57,000. Kern County employment in oil and gas has rebounded in the past few years with the rebound in worldwide oil prices. However, Kern officials know the future of oil and gas employment in the county, as well as statewide, is daunting. Since 2015, the oil and gas industry in California has been faced with California state government and politics aimed at phasing out fossil fuels: a lengthy moratorium on permits for new wells, more stringent air quality requirements, and general higher costs of doing business in the state. In announcing its closing, Valero described it as following 'years of regulatory pressure, significant fines for air quality violations, and a recent lawsuit settlement related to environmental concerns.' Similar government policies were singled out by Phillips 66 officials when in October 2024 they announced the closing of the Phillips 66 refinery in Wilmington, Southern California. That refinery accounted for 8% of the state's oil processing. That shutdown will result in layoffs for 600 direct workers by the end of this year. With the politics of oil and gas in California (the industry has been the main villain in state government for years), it may be that the industry can do nothing to reverse the trend of refinery closures. But at least as this process continues, there should be no illusions on any side about what can be expected for many of the laid-off workers--even with the sophisticated and well-funded re-employment systems in place. There should be no illusions about 'just transition.'
Yahoo
08-05-2025
- Business
- Yahoo
California gas prices could reach $8 a gallon by 2026, new study suggests
Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Generate Key Takeaways The Brief The closure of two California refineries could reduce the state's refining capacity, leading to a gasoline shortfall. Gas prices could increase by 75% by the end of 2026. Prices for a gallon of gas could jump to roughly $8. LOS ANGELES - California could soon face a fuel crisis as two oil refineries are set to shut down. That crisis could also drastically increase gas prices for consumers. According to a new study published by USC's Marshall School of Business, the impact of the refineries closing could drive gas prices up to $8 a gallon by 2026. Why are prices increasing? What we know The Phillips 66 refinery in Los Angeles is set to close in October 2025 and Valero's Benicia refinery is expected to close in April 2026. The study suggests that the closures will lead to an economic crisis and result in a gasoline shortfall. "Reductions in fuel supplies of this magnitude will resonate throughout multiple supply chains affecting production, costs, and prices across many industries such as air travel, food delivery, agricultural production, manufacturing, electrical power generation, distribution, groceries, and healthcare. Additionally, a reduction in gasoline production and related price increases will likely have a dragging effect on the growth of California's GDP, and have a significant impact on the affordability of living in the Golden State, as well as personal and household spending patterns and saving behaviors. The loss of in-state gasoline production will also adversely affect corporate and personal income, sales, and excise tax revenues at a time when California's budget deficit is estimated to be as high as $73 billion, and state and local government debt at $1.6 trillion," the study read. Experts say California is confronting a potential 21% reduction in collective refining capacity from 2023 to April 2026. What's next Experts believe that in order to make up for the shortfall in production, California would likely have to rely on refineries from around the world, including those on the Gulf Coast, South Korea, and China. RELATED: Oil company Phillips 66 to shut down Los Angeles refinery "As a consequence of the two refinery closings, California will be at the mercy of out-of-state and foreign, non-U.S. refiners. Historically, when California needed gasoline to compensate for its in-state production shortages, it turned to Washington State refineries. However, Washington State's current capacity of 648,000 barrels a day is less than 40% of that of California's, and it does not appear that it has sufficient surplus capacity to compensate for the expected reductions," the study said. $8 a gallon? Why it Matters Experts who conducted the study estimate that the average price of regular gasoline in California could potentially increase by as much as 33.6% from the April 23, 2025, price of $4.816 to $6.045 and/or $6.433 a gallon by the end of 2025. More so, they estimate the average price of regular gasoline could also potentially increase by as much as 75% from the April 23, 2025, price of $4.816 to $7.348 and/or $8.435 a gallon by the end of 2026. California's average gas price is typically 40% to 50% higher than the national average. According to AAA, currently, the national average price is $3.15, while California's current average price is $4.79.
Yahoo
07-05-2025
- Business
- Yahoo
Valero Energy to close California refinery, inflicting ‘a major hit on the city' and raising supply concerns
Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Generate Key Takeaways Located roughly 36 miles away from San Francisco is the city of Benicia, California. With a population of about 26,400 people, it's known for its small-town charm. The city also relies heavily on one major business — San Antonio, Texas-based Valero has operated a 170,000-barrel-per-day refinery in Benicia for 25 years. The facility employs over 400 workers. Don't miss But now, those jobs, and the city's general economy, are threatened as Valero has decided to close that location next year because of high operating costs and the strict environmental regulations California is known for. It also raises concerns for the fuel supply in the state. Mario Guiliani, city manager for the city of Benicia, called the news "surprising and distressing" and said the refinery generates millions of dollars in revenue for Benicia. "It would be a major hit on the city," he told ABC7 News. "It is the newest refinery on the West Coast. It produces a significant amount of gasoline for the California market. I cannot foresee a possibility where that refinery just ceases operation altogether." Last year, another energy company, Phillips 66, announced it will close its Los Angeles oil refinery in late 2025 due to questions about its long-term sustainability. As a result of refinery closures, there's a supply crunch anticipated at the end of this summer in California, reported Argus Media. Governor Gavin Newsom has asked the California Energy Commission to 'redouble the state's efforts to work closely with refiners' and by July 1 recommend changes to the state's approach to ensure it has adequate fuel supply. 'I am directing you … to reinforce the State's openness to a collaborative relationship and our firm belief that Californians can be protected from price spikes and refiners can profitably operate in California — a market where demand for gasoline will still exist for years to come,' wrote Newsom in a letter April 21. Rich Walsh, executive vice president at Valero, said the company is having meetings with the CEC to 'minimize the impacts that would result from the loss of the refinery.' Why a major refinery seeks to close its doors The decision for Valero to close its refinery did not come out of the blue. Rather, it "follows years of regulatory pressure, significant fines for air quality violations, and a recent lawsuit settlement related to environmental concerns," the company said in a statement quoted by ABC7. And it's not just the Benicia refinery that's at risk. The company said it's also reviewing its broader operations in California. During Valero's most recent earnings call, CEO Lane Riggs said, "California has been pursuing policies to move away from fossil fuels for really for the past 20 years. And the consequence of that is the regulatory and enforcement environment is the most stringent and difficult of anywhere else in North America." Riggs also said, "Benicia operates in the more difficult part of California with respect to the regulatory and enforcement side of this. And then on top of that, Benicia costs considerably more to maintain." In October, Valero was charged almost $82 million in fines for a history of toxic chemical releases and other violations at its Benicia refinery dating back to 2003, reported ABC7. That was the largest-ever penalty to be issued by the Bay Area Air District. A 2019 inspection found that Valero did not properly report toxic emissions from the facility's hydrogen system — emissions that have been linked to health effects. Read more: Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? A potentially devastating economic blow The closure of the Valero refinery could cost several hundred Benicia workers their jobs — but the ripple effect goes beyond that. Benicia Mayor Steve Young told ABC7 that news of the Valero closure is "deeply impactful for our entire community." Brittany Hodgkinson, the manager of Elviarita's Cantina and Catering in downtown Benicia, told the news network that her business relies on Valero employees for sales. But beyond that, the refinery plays a big role in the community by sponsoring youth sports and school events. "Just hoping that someone comes in and buys the refinery and keeps us going … That's just my biggest hope" she said. Unfortunately, such are the consequences of having a small city or town rely on one major employer for revenue. For instance, in 2019, the city of Luke, Maryland suffered a major blow when its 131-year-old paper mill shut down, taking 675 jobs away with it, per The Washington Post. The closure was said to have an impact on 2,000 others employed by other nearby businesses. Taxes from the mill had funded the bulk of the town's budget. As of now, Valero intends to close its Benicia refinery by April of 2026. Walsh did acknowledge during the company's last earnings call that "there's a genuine interest in California to avoid the closure." But he also said it's a complex issue. "We are having discussions with the state, but our intent right now is to close the refinery," Walsh said. Young, meanwhile, told KQED that he wished the company had provided more of a heads-up on its closure plans. 'We need to get moving on this quickly because 12 months is not a long time given the severity of the economic impact,' said Young, who noted that nearly 20% of Benicia's $60 million budget comes from the refinery. 'I think that's part of my frustration, is how little time we have to try to plan for some kind of an alternative.' What to read next This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
