California Oil and Gas Report

California needs better alignment between its energy policy and its economic goals so that the lives of everyday Californians actually improve. Here is a concise recommendation:

Energy Security Policy: Stabilize and clean up California’s transportation fuels market. Promoting responsibly regulated in‑state production to meet in‑state demand can help:

• Improve local air quality and environmental oversight
• Support more stable and competitive fuel prices
• Reduce global lifecycle emissions per barrel during the transition
• Create and protect high‑quality jobs for California workers
• Strengthen the ethical and human‑rights profile of the fuels we consume

We need to focus on practical, transition‑period policies that keep fuel reliable and affordable while California continues to increase its energy stack.

California’s climate agenda continues to steam ahead, in particular SB 253, SB 261, and the new CARB climate‑transparency rules.

On February 26, 2026, CARB approved regulations to implement the Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Act (SB 261). SB 253  requires U.S.-based entities doing business in California with over $1 billion in annual revenue to report Scope 1 and Scope 2 GHG emissions annually, starting with a deadline of August 10, 2026. Companies must begin reporting indirect Scope 3 emissions (supply chain, employee commuting, etc.) in 2027. SB 261 requires U.S.-based entities with over $500 million in annual revenue to prepare a biennial report on climate-related financial risks and mitigation strategies. The regulations will impact thousands of public and private companies who do business in California. They will be facing hundreds of thousands of dollars per reporting cycle (consultants, auditors, data systems) to comply.

These laws don’t just hit “big corporations.” They force large companies doing business in California to build costly, complex reporting systems and then push those demands down their supply chains—onto local manufacturers, farms, logistics firms, and service providers who lack in‑house ESG teams and spare capital. Compliance dollars that could fund jobs, wage growth, and investment instead get redirected to consultants, auditors, and legal defense. Over time, firms rationally respond by limiting their California footprint, shifting purchasing out of state, or shelving new projects here.

Scope 3 reporting is particularly troubling. Scope 3 has nothing to do with the emissions produced by a company. Instead, it refers to emissions attributable to suppliers, customers, and other third parties. This will force large companies to push data‑collection and verification demands down onto suppliers, including local small and medium‑sized businesses, increasing their operating costs. California’s agriculture industry will be particularly affected by the reporting requirements.

Even if you support ambitious climate goals, it should concern you that the marginal “win” from yet another layer of reporting is speculative, while the costs to competitiveness and opportunity in California are very real.

Valero’s 170,000 barrel-per-day Benicia refinery, representing ~10% of California’s gasoline, will phase out production by April 2026, creating severe local job insecurity for 400+ workers and threatening $11 million annual tax revenue for the City of Benicia. The closure stems from high regulatory costs, impacting California’s fuel supply and raising potential price volatility.

The closure adds further risk to California’s beleaguered fuel supply chain. The shutdown is expected to reduce in-state production, potentially increasing prices at the pump. The closure will increase California’s reliance on imported gasoline and diesel, and it may heighten vulnerability to supply disruptions or refinery outages elsewhere on the West Coast.

Local workers are facing a harsh reality of immediate job losses and financial insecurity. Refinery jobs are generally high‑wage, unionized, blue‑collar positions, with workers receiving approximately $100,000 per year with overtime and benefits. The promised “just transition” for these families and communities has not materialized.

For Benicia’s residents, and all Californians, there are significant questions regarding affordability and energy security that need answers from state policy makers.