California is running out of refineries – and running out of time

With no pipelines crossing the Sierra Nevada, California is an energy island, separated from the crude oil supplies and refinery infrastructure of the other continental states. As a result, the state's transportation fuel needs-for airports, cars, trucks, and ships serving three of America's busiest ports-must be met by in-state refineries.

With the recent closures of the Valero and Phillips refineries that processed crude oil and the 2023 conversions of Marathon in Martinez and Phillips 66 in Rodeo that are no longer running crude oil, just renewable diesel, California's remaining six refineries that process crude oil do not have the capacity to produce all that California demands of 58 million gallons of transportation fuel DAILY:

• 11 million gallons/day for Jet fuel for the States' 16 primary major military air bases and installations, and 9 international airports.
• 10 million gallons/day for Diesel for the States' trucking and construction industries.
• 37 million gallons/day for Gasoline for the States' more than 36 million vehicles.

In addition, approximately 5.2 million metric tons of bunker fuel are an annual demand for the ships in three of the busiest Ports in America, located in California.

• Port of Los Angeles had more than 1,800 vessel arrivals in 2024, which includes cruise and merchant ships.
• Port of Long Beach handled over 9.6 million container units in 2024, indicating a very high volume of ship activity, plus cruise ships.
• Port of Oakland, which also handles significant cargo volumes, contributes to the total number of cruise and merchant ships needing fuel.

California policies have reduced the state to six operational crude-oil refineries, forcing it to import 14 to 15 million of the 37 million gallons of gasoline it consumes each day, primarily from Asian countries.

Because of the reduction in transportation fuels being imported to California from Asian refineries, President Trump made the call to waive the Jones Act. This allowed foreign flagged tankers to take fuel receipts from states in the Gulf of America along with the East coast and deliver them via the Panama Canal, to California ports. Normal rules require domestic shipping vessels to be American built, owned, and crewed.

• A Jones Act waiver is a temporary legal exemption that allows foreign-flagged ships to carry cargo between U.S. ports, i.e., from the Gulf Coast through the Panama Canal, to the West Coast ports in California. Under the Jones Act waiver in the last 3 ½ months foreign flagged tankers have transported more gasoline to California than what has been shipped to the state in the last 15 years combined.
• The Petroleum Administration for Defense Districts PADD 5 (West Coast) jet fuel inventories normally track between 9 – 11 million barrels on hand. By April 2026 inventories were at 2.6 million and dropping. This was the lowest inventory for that time in more than 23 Years. Then on April 2, 2026, South Korea, California's largest supplier of jet fuel, announced that they were suspending jet fuel exports. With this announcement and the fact that PADD 5 inventories were getting near historic lows, Southwest Airlines took unprecedented historic action. Southwest chartered a tanker flagged under the Marshall Islands to transport 306,389 barrels of jet fuel from the Valero Pasadena dock in Houston to berths in Los Angeles and Long Beach. In addition to Southwest Airlines' unprecedented action, in the last 3 ½ months foreign flagged tankers have transported more jet fuel from PADD 1 and PADD 3 to California than the state has received in the last 36 YEARS COMBINED.
• On August 10, 2026, President Donald Trump approved a 90-day extension of the Jones Act waiver that will allow foreign-flagged vessels to transport critical transportation fuels demanded in California and agricultural commodities between U.S. ports in the Gulf Coast and West Coast from August 17 through mid-November 2026.

California is the 4^th largest economy because it has always had sufficient refinery capacity to manufacture the humongous in-state demands for transportation fuels. It is important to note that long term federal waivers will not solve the supply chain of transportation fuels demanded by the 4th largest economy in the world.

The root cause of refineries hemorrhaging out of the state is California state policies. National policy "band aids" cannot provide the long-term solution to a California sponsored hemorrhaging of the in-state refineries needed to manufacture the transportation fuel demands within the state.

With those recent refinery closures of the Phillips in Wilmington and Valero in Benicia and previous conversions of Marathon in Martinez and Phillips 66 in Rodeo that are no longer processing crude oil, just renewable diesel, California must now rely on the importation of transportation fuels that cannot be made in the State, 40% for gasoline demand and 35% for jet fuel and diesel demand.