Strange Bedfellows

California is in an energy transition, moving from dirty to cleaner fuel sources, and things have been moving fast—fast enough that things have become a little discombobulated. We now see clean fuel advocates scrambling to support measures that will keep California's refineries operating long enough to support a gentler transition than would happen if the shuttering of two major refineries (representing about 15 percent of California's gasoline supply [1]) go through as planned. 

"Green Gas Pumps II," Barbara L. Hanson, CC BY 2.0.

Gasoline consumption is steadily falling in California, a trend driven by more efficient engines and the increase in hybrid and electric vehicles, but not fast enough to match the decline in supply that would come with these refinery closures. One California lawmaker, Cottie Petrie-Norris (a Democrat in the California Assembly representing District 73) flagged in a hearing this past May, "the state is largely without a system-wide transition plan. A piecemeal approach to the transition is not the answer. We need a real plan."[2]

The two refineries in question are Phillips 66’s Wilmington refinery in Los Angeles, scheduled to close by the end of 2025, and Valero’s Benicia refinery in the San Francisco Bay Area, scheduled to close by mid-2026. The Phillips 66's closure is already a foregone conclusion, but the Valero closure is still up in the air. If that closure goes through, not only will there be job and tax revenue losses for the local economy, the state's gas supply will be running much closer to the edge of the demand curve: the state will run the risk of gas price spikes if anything else disrupts the gasoline supply. If there's one thing that is deadly for environmental policy in the state, it's gas price spikes, so state lawmakers are trying to find ways to smooth the path ahead. The state is currently undertaking two measures in the hopes of delaying the closure of California refineries: streamlining oil drilling permits and putting a hold on profit caps for refineries. A letter from the California Energy Commission's (CEC's) Vice Chair Siva Gunda back in June describes proposed changes to streamline permitting, a delay in a profit cap, and other smoothing measures. [3] On August 29, 2025, the CEC voted to delay enforcement of a cap on refinery profits (maximum gross gasoline refinery margin or GGRM) until 2030. [4] The permitting streamlining measures were adopted in September as part of Senate Bill (SB) 237, Part 5. [5]

Where does that leave advocates for a clean fuel transition? After their long opposition to the state propping up the failing fossil fuel industry, they are finding themselves supporting these measures to potentially keep the refineries open longer. Gunda's June letter refers to the CEC's consultation "with industry, labor, fenceline communities, and the cross-agency Petroleum Strategy Task Force" to develop the CEC's recommendations. The working group that the CEC convened included environmental organizations, environmental justice groups, and low-carbon fuel advocates. They were reportedly united in seeing a clear benefit to keeping the Valero refinery open, and potentially staving off other closures, until gasoline consumption has declined further. Besides the political cost to those pushing environmental policy, the most marginalized communities would be the hardest hit by a sudden spike in gas prices.

To help me understand this instance of strange bedfellows—the uncomfortable alliance between refineries and those trying to wean the state off fossil fuels—on October 3, 2025, I had a conversation with Colin Murphy, the Co-Director of the Energy Futures Research Program at the UC Davis Institute of Transportation Studies. I asked him to explain how we came to be in this crisis. 

First, he explained, California is an "energy island:" we are short on pipelines and port infrastructure to import crude oil and gasoline. Increasing imports means investment in infrastructure, and companies are understandably shy to do that when the direction of gasoline consumption is so clearly in decline. And nothing is going to disrupt that decline, it's just a matter of how fast it will decline. Right now, the rate of decline is not as fast the projected decline in supply from refinery closures and growth of import capacity. Thus the need to prop up in-state oil production and fuel refinement. 

What are the fears of the clean fuels advocates? The policies the state are adopting now to delay refinery closures are intended to allow the state to meet consumer need, but there is the danger that they might artificially inflate production and ultimately drive gas prices down to the point that they unnecessarily slow the transition off fossil fuels. However, with a powerful fuel industry and non-competitive market (the fuel refineries can exit at any time and go to a less-regulated state), there is no alternative but to try to soften regulation to keep the state's existing refineries open.

Some are saying the state's Low Carbon Fuel Standard (LCFS) is to blame for refineries closing, but while the LCFS undoubtedly has helped drive the trend in decreasing gasoline consumption, Mr. Murphy explained that he has predominantly heard refiners complaining about the bottleneck with permitting for new oil wells (recently rerouted from local control to the state's Geologic Energy Management Division, CalGEM), the threat of a profit cap (the GGRM), and a new reserve requirement which would have required more tanks to be built. Overall, the investment required to stay in production and compliant doesn't pencil out.

Meanwhile, Grist reports that one consulting firm (Wood Mackenzie) estimates that "nearly a quarter of all oil refineries worldwide are set to go dormant by 2035." [6] Let's all hope we are ready for the global gas crunch when it comes.

Sources:

1. Michael Barnard, "California Refineries Close as Gasoline Demand Slips into Permanent Decline" (CleanTechnica, Sept. 14, 2025)

2. Hearing transcript, Assembly Standing Committee on Utilities and Energy, Annual Oversight Hearing on the Transportation Fuels Sector (CalMatters Digital Democracy, May 28, 2025)

3. Letter to Governor Newsom from California Energy Commission Vice Chair Siva Gunda regarding recommendations on "changes to state policy to ensure adequate transportation fuels supply"  [click to download] (California Energy Commission, June 27, 2025) 

4. Proposed: "Resolution Regarding Implementation Timeline of SB X1-2 Maximum Gross Gasoline Refining Margin" [click to download] (California Energy Commission, Aug. 29, 2025) 

5. Senate Bill 237 (2025)."Oil spill prevention: gasoline specifications: suspension: California Environmental Quality Act: exemptions: County of Kern: transportation fuels assessment: coastal resources" (approved by the Governor Sept. 19, 2025)

6. Tik Root, "California is sunsetting oil refineries without a plan for what’s next" (Grist, Aug. 15, 2025)

More good articles to read on this topic that focus on what drives up California's gasoline prices:

- Severin Borenstein (Energy Institute at Haas School of Business, UC Berkeley), "California’s Refinery Closure Drama" (Energy Institute Blog, Aug. 18, 2025)

- Lauren Teixeira, "How California Regulated Itself Into an Energy Crisis" (The Breakthrough Institute, June 11, 2025)

Right Tree, Right Place

Trees are often pointed to as a panacea for climate change, the most cost-effective environmental engineering we can do to cool the planet. The t-shirt slogan/ ancient Chinese proverb is inescapable: "The best time to plant a tree was 20 years ago. The second best time is now." However, my time following grasslands scientists on Twitter, back when it was a useful tool for networking and research, made me look more skeptically at trees. See my blog post from 2019 with more links about the relative importance of grasslands and kelp forests as carbon sinks. I still chuckle at the quip by one scientist: "Trees are dorks who put loads of their carbon aboveground." 

Mount Diablo sunset, photo credit: me

Besides being prone to burning and unhelpfully releasing lots of carbon dioxide into the atmosphere, trees can be a problem because you can't just plant any tree anywhere, and people don't always take the time to think ahead. A July 2025 Guardian UK article "How a £1.5bn ‘wildlife-boosting’ bypass became an environmental disaster" describes just such an instance, where a biodiversity corridor along an English highway instead turned into a dead zone, where nearly all the tree saplings died: "they had planted the wrong species in the wrong place." National Highways, the supervising agency, had to admit nature was left worse-off after the project, with the death of nearly all of the 860,000 trees they planted.

Meanwhile, I spent most of the last five years working on wildfire mitigation in California, where the slogan "right tree, right place" is repeated by all the players (government, utilities). In particular, the utilities want you to think ahead before planting a tree: sometimes they get left holding the bag when someone's poorly placed or poorly maintained tree comes into contact with bare wire and there's an ignition. All three major investor-owned electrical utilities in California have repositories of information on how to select the right tree and place it at a safe distance from electrical infrastructure.

 

Seen in a friend's garden, photo credit: me

Here are some tree planting planning resources the utilities point to:

• CalPoly's SelecTree Tool (which includes a filter for California native plants and "has fall color")
• The Arbor Day Foundation's Tree Wizard Tool

And then there are the utility-specific pages:

• PG&E "Planting Safely" (scroll down to Safe Planting Resources)
• SCE "Power Lines and Trees" (and the two-page 2019 brochure "Right Tree, Right Place") 
• SDG&E "Plant the right tree in the right place"

Some other resources you might want to reference:

• The California Native Plant Society's Calscape Search Page - to locate native trees and shrubs to suit your needs
• The National Cooperative Soil Survey's Web Soil Survey - to learn about your soil's characteristics

On a related note, researchers published a study in Nature Communications last year (2024) looking at where global warming from reducing surface reflectivity (albedo) from increasing tree canopy can partially or even completely counteract the cooling benefit of increased carbon storage in trees. It turns out "[i]n most locations, these changes in albedo offset or even negate the carbon removal benefits" (Hasler et al. 2024 "Accounting for albedo change to identify climate-positive tree cover restoration").

The researchers produced a spatial data set for land managers to help them determine how much the decreased reflectivity from additional tree cover might impact the carbon removal benefit of a reforestation project. Without taking the reflectivity reduction impact into account, land managers might be overestimating the carbon removal benefit of reforestation projects "anywhere from 20 to 81%" (as described in the Nature Conservancy summary of the study "New maps help decision-makers factor albedo into tree-planting strategies").

If you don't have an easy way to use a spatial data set, you can estimate a reforestation project's impact using the Nature Conservancy's Naturebase mapping tool, which "integrates albedo into both its reforestation and avoided forest conversion estimates."

My backyard Bradford Pear tree, photo credit: me

Remember - trees are dorks! They burn and they absorb sunlight which both warm the planet. Plant them strategically!