California Loses Refinery Capacity as Newsom's Climate Policies Take Toll

State imports more foreign oil as plants close, costing jobs and raising energy costs

Published on Feb. 20, 2026

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California has lost roughly a quarter of its refinery capacity since Governor Gavin Newsom took office in 2019, as major companies like Phillips 66 and Valero Energy have announced plans to shut down or scale back operations at refineries in the state. The closures are resulting in job losses and higher energy costs for Californians, even as the state imports more foreign oil to make up for the reduced domestic refining capacity.

Why it matters

Newsom has touted California as a leader in climate policy, but the loss of refinery capacity is undermining those efforts by increasing reliance on imported oil, which often has a higher carbon footprint than domestic production. The job losses from refinery closures are also a setback for the state's economy.

The details

Phillips 66 announced it is laying off 277 workers at its Los Angeles refinery as it winds down operations there. Valero Energy plans to shut down a Northern California refinery this spring, which will cost hundreds more jobs. In total, California has lost roughly a quarter of its refinery capacity since Newsom became governor in 2019.

  • Phillips 66 announced job cuts at its Los Angeles refinery in February 2026.
  • Valero Energy plans to shut down a Northern California refinery in spring 2026.

The players

Gavin Newsom

The Governor of California who has touted the state's climate policies.

Phillips 66

An energy company that is winding down operations at its Los Angeles refinery.

Valero Energy

An energy company that plans to shut down a Northern California refinery.

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What they’re saying

“California 'is the best place in America to invest in a clean economy because we set clear goals and we deliver.'”

— Gavin Newsom, Governor of California (Wall Street Journal)

What’s next

The state will likely need to address the job losses and higher energy costs resulting from the refinery closures as it continues to pursue its climate goals.

The takeaway

Newsom's climate policies have had unintended consequences, leading to job losses and higher energy costs for Californians as the state loses refining capacity and becomes more reliant on imported oil.