California is, as my British friend would say, a right old mess. There is one primary reason for this: The California Democratic Party, which has engineered things in the once-Golden State to assure itself a legislative supermajority for the duration, whatever that duration might be. Now, I have friends and colleagues who live and work in California and who are working tirelessly to turn things around. I wish them every success; I've lived and worked in California myself, and understand the appeal, in the scenery, in the salubrious climate, in the outdoor opportunities, in the wide variety of landscapes.
With that said, I also remember all too clearly how expensive California is. In my last stint there (2017), I was involved in a startup, working and staying in Silicon Valley, and the only thing that made $5/gallon gasoline tolerable was that I found lodgings a five-minute walk from where I was working. And those gas prices, indeed, the high cost of energy in California in every form, can be laid directly at the feet of California Democrats.
It's about to get worse. The oil companies that are still running refineries in California are pulling out, and there's nobody interested in taking these refineries over.
What did California officials think was going to happen when they decided it was a dazzlingly brilliant idea to hound the oil industry out of the state? That magic would take over and there would be no consequences for their rash decisions?
Apparently, they weren’t thinking at all, because, according to reports, the California Energy Commission (CEC) is looking for a buyer who will take over one of the refineries that’s being abandoned by a company that’s had enough of being beaten up by Sacramento. Their confidence in their crusade to green out the state seems to have been replaced by panic.
To paraphrase the great Groucho Marx, they have values, and when those wreck things, they have others.
One such is the Valero Energy Benicia refinery, near San Francisco - unfriendly ground indeed for an oil refinery. Valero is bailing, and the CEC is trying to find someone to take over. Nobody seems interested, and can we blame them? This is an unprecedented move by the state, and it's failing. This should, of course, come as a surprise to no one.
The rare attempt by a state government to broker the sale of privately-owned infrastructure reflects its growing concerns over protecting fuel supplies in the most populous U.S. state and keeping a lid on prices, where California's nearly 28 million drivers already pay among the highest prices for gasoline in the country.
RedState's own Jennifer Van Laar has done sterling work over the last few years, documenting California Democrats' and, in particular, Governor Gavin Newsom's efforts to destroy California's energy sector:
In 2024, Jennifer documented the impeccably coiffed governor's attempts to jack California gas prices into the stratosphere by placing even more regulations on refineries and the companies that run them. She wrote:
Grasping for relevance, California Gov. Gavin Newsom is in the midst of a bit of a temper tantrum this week with the legislature - threatening to convene a special session if they don't pass his proposal to further regulate California's oil and gas industry. Industry analysts say that the proposal, which would force refineries to "maintain a minimum fuel reserve to avoid supply shortages," would lead to increased prices for drivers in California, Arizona, and Nevada.
This asinine proposal is from Newsom's California Energy Commission (CEC), which was formed in 2023 after a Newsom called a special session in 2022 demanding that legislators "do something" to prevent alleged price gouging by Big Oil. Commission members are political appointees, but the staffers are not. And, according to political consultant Rob Stutzman, the CEC's own staffers believe this proposal will make prices higher, not lower.
Now, as a result of this asinine proposal, the refineries are closing down. This was inevitable. The companies that run them are, in effect, telling California, "Enough is enough. We're leaving." It's like something out of an Ayn Rand novel, where elected nitwits and bureaucrats - looters - have made it impossible for the productive to be productive.
The Valero refinery isn't the only one closing down:Later this year, Phillip’s 66 is closing its refinery complex, which has sites in Wilmington and nearby Carson. It will be the fourth California refinery to close since 2020. The announcement was made mere days after Gov. Gavin Newsom signed Assembly Bill X2-1, granting the state the power “to require oil refiners to maintain a minimum inventory of fuel to avoid supply shortages.” The law also limits “higher profits for the industry,” and authorizes the bureaucracy to force “refiners to plan for resupply during refiner maintenance outages.”
This is all Economics 101. If you tax and regulate something, you get less of it. And California Democrats, even among American Democrats in general, seem unable to learn these lessons. It's either that, or they are deliberately trying to destroy the economy of our most populous state.
Read More: FACT CHECK: California's Regulations and Gas Taxes Cause High Gas Prices, Not Greedy Oil Companies
There's only one way out of this doom spiral for California, and California's Democrats are unwilling and unable to face it. What must be done is a massive deregulation of California's energy sector, making it desirable or even possible for the oil companies to do business in the formerly Golden State. Get rid of the plethora of a la carte gasoline blends. Get rid of the idiotic minimum inventory rules. Worse of all, stop worrying about how much the oil companies are making in profits, and start worrying about how much Californians are paying for gasoline for their cars and natural gas for heating their homes, not to mention everything downstream of the energy sector, which is, of course, everything.
That won't happen as long as California's Democrats run things. It's not in their DNA to deregulate, it's not in their DNA to take any actions that would make California what it was when, say, Ronald Reagan was governor. That's what has to happen. That's what California voters will, sooner or later, have to figure out.
