Posted on 12/16/2025 11:05:57 AM PST by MtnClimber
Before handing Gavin Newsom the Democratic presidential nomination in 2028, Democrats may want to pause and consider his long record of failure in California. From his mishandling of the January wildfires to his coddling of illegal immigrants, his poor governance has led to a collapse of public confidence and a mass exodus from the Golden State.
But buried beneath the broader criticism is an often overlooked central failure: Newsom’s policy decisions have made California an increasingly hostile state in which to conduct business. And few industries have suffered more under California’s regulatory assault than fossil fuels, where relentless overreach has driven companies out of the state. The latest major corporation to join the stampede is Valero Energy. The company is so determined to flee California’s overregulation that it was willing to absorb a staggering $1.1 billion loss to get out. Valero will shutter operations by April 2026.
Because other energy companies have already left California, Valero’s exit will put even greater upward pressure on gasoline prices in the state, which are already among the highest in the nation.
The video below from widely followed X account @WallStreetApes explains the current situation:
Valero just wrote off $1.1 billion. That is the cost they are taking to walk away from California rather than keep operating their Benicia refinery past April 2026.
When a company takes a billion dollar loss just to leave, you know something is seriously broken.
This facility processes 145,000 barrels of oil per day, representing 8.6% of California’s entire gasoline production. 400 workers have lost their jobs. 200 contractors are out of work.
The city of Benicia loses 17% of its entire budget, and California drivers, they are about to get hammered with the worst gas prices in American history.
University of California Davis economists calculate a 40 cents per gallon increase the moment Phillips 66 closes their Los Angeles refinery this December. Then another 81 cents when Valero shuts down four months later in April. That totals a $1.21 per gallon increase by August 2026, your 15 gallon fill-up jumps from $70 to at least $95.
The Stanford Energy Institute came up with even worse projections. They are showing potential spikes to $8 per gallon during supply disruptions.
UC Berkeley’s Severin Borenstein, who has been tracking California energy markets for decades, warns these closures could create severe gasoline shortages with unprecedented price increases.
There is an added wrinkle — a major one. In an attempt to reduce air pollution and greenhouse gas emissions, the state has mandated the use of special blends of gasoline, which are known as “CARBOBs — California reformulated gasoline blend stock for oxygenate blending. This is not regular gasoline. It is a specialized ultra clean burning fuel mandated by California law.”
These blends cost substantially more to produce than regular gasoline due to their added complexity.
Unlike other states, California’s special fuel blends cannot be imported from major U.S. oil-producing states such as Texas, Oklahoma, or Louisiana when inventory runs low. Instead, supply comes largely from a shrinking number of in-state refineries or from a handful of foreign refineries — primarily in countries like South Korea, India, and Singapore — that have the specialized equipment needed to produce CARBOB fuel.
The long-distance transport, exposure to global supply-chain disruptions, and added logistical costs all drive prices higher — costs that are first borne by corporations and ultimately passed on to California consumers at the pump.
Valero is taking a $1 billion dollar loss just to get out of California by April 2026
The company will not comply with Gavin Newsom mandates and instead is willing to lose a billion dollars to leave
“When a company takes a billion dollar loss just to leave, you know something… pic.twitter.com/9xpPBWd4fu
— Wall Street Apes (@WallStreetApes) December 14, 2025
Leslie Eastman has reported frequently on the flight of energy companies out of California over the past couple of years. She covered Chevron’s departure here and here — as well as Valero’s initial announcement of its decision to shutter its Benicia refinery.
Leslie also wrote about Newsom’s approval of an order to force energy producers to stock pile gasoline, a measure that led Phillips 66 to announce it would end “operations at its Los Angeles-area refinery in the fourth quarter of 2025.”
Needless and ill-considered policies like this are driving energy companies out of California, one regulation at a time.
But the exodus has not been limited to energy companies. Below is a list of other corporations that have left to escape California’s unfriendly business climate in recent years.
We can now add Valero to the growing list of major companies fleeing California, taking well over $1.3 trillion of revenue with them. Great job Newsom!
• AECOM
• Align Technology, Inc.
• Amazing Magnets, LLC
• Amgen Inc.
• Anduril
• Bed Bath & Beyond
• Blaze Pizza…
— BlackApple (@BlackApple) December 14, 2025
These corporate departures are not abstract losses — they are steadily hollowing out California’s tax base. In a state where the top 1 percent of taxpayers generate nearly half of all income tax revenue, the flight of high earners and major employers carries severe fiscal consequences.
Those consequences are now impossible to ignore. Just last month, CalMatters projected an $18 billion deficit for the 2026–27 fiscal year, the fourth major shortfall in as many years. The nonpartisan Legislative Analyst’s Office has warned that California faces “potential structural deficits of $15 billion to $35 billion annually through 2028–29,” a sign not of temporary turbulence, but of deep and persistent mismanagement.
This is the legacy of Gavin Newsom’s governance: a state hemorrhaging businesses, eroding its revenue base, and lurching from one budget crisis to the next. California was once an engine of growth and opportunity. Under Newsom, it has become a cautionary tale.
If this is the model of leadership Democrats intend to export to the nation, voters should ask a simple question: why would anyone entrust the presidency to the man who helped drive the country’s largest state into fiscal and economic decline?
The real problem is that the state government still has a 2030s sometime deadline for banning the sale of new cars using gasoline and diesel fuel. That is timed to happen long before Valero can possibly amortize the investments necessary to comply with all those regulations. So Valero is pulling out now. That makes perfect financial sense.
And the State's past behavior shows there really is no chance that any of this will change.
OTOH, there is a great way for the Trump administration to make the impact of shutdowns of this Valero refinery, and another company's big Southern California refinery later this year, even worse. And it's fully justified.
Travis Air Force Base, the country's biggest military air transport field, gets ALL of its jet fuel from Valero's Benecia refinery being shut down. Naval Base San Diego is the Pacific Fleet's largest and most important base. It gets all of its ship fuel (only carriers and subs are nuclear-powered) from California refineries.
The Air Force and Navy will be in a world of hurt for fuel with both those refineries out of operation. And the 1950 Defense Production Act lets the President establish priorities for deliveries of the production of any private company or facility between military and civilian uses.
So President Trump can order every remaining refinery in California to first produce the total fuel requirements of Travis Air Force Base and Naval Base San Diego before delivering any POL production to civilian uses.
Predictions over the past year have estimated that California gasoline prices will jump to $8 a gallon when these two refineries shut down. Adding an Air Force/Navy priority requirement for their fuel to such an over-heated market will blow that up still more, to (my wild-assed guess) maybe $10-$12 a barrel. In an election year. I can't wait.
Californians sure ruined Colorado.
Californians destroyed the Oregon lumber industry.
Refuse to play the game and leave.
I lived in Colorado for 22 years. I left to get away from the leftist craziness.
Me too. Had a great house in Lyons. Wouldn’t go back
Californians sure ruined Colorado.
And any other state they moved to Texas is a good example too.
California is like seeing people as free range chimps.
The company I work for has had a brick and mortar presence in California for around 40 years and just pulled out last year citing the high cost of doing business in that State. This move is saving us A LOT of money.
I have family who used to live east of the refinery.
At least once a year, someone would sue them for an “emission violation”.
Plus all the CA regulations, leaving CA is probably saving them 5B/year.
There used to be over a dozen auto plants in Kalifornia. Now there is just one, Tesla.
Companies need a consistent, not too expensive energy supply. Consistent energy and a positive business environment.
Kalifornia is neither.
Without Cho BiDung in the Oval Office, the Green New Scam is nearly pfffft. I am sure that the BiDung administration had visited most of the US automakers ‘advising’ them to produce EVs ... or else. Now that the incentives are gone and the EV market nearing saturation, the demand for Green New Crap is vanishing. And since there are no more WDC ‘enforcers’ visiting the US automakers with offers of ‘protection’, Ford is among the first to decide to take the huge financial hit in order to got out of the EV business.
I expect Ford’s ridiculous vehicle prices to surge astronomically the next year or two and then start dropping.
An aside here ... with Big Auto’s business model moving away from making money on sales to making their money on service and repair, design and production quality has dropped like a rock.
When I get ready to buy another vehicle it will be a 201x as just about anything made after 2020 is corporate crap - a money bomb just waiting for the warranty to expire.
I lived south of Lyons in Wondervu. Lived on top of a mountain ridge with views to the west of the continental divide. The first picture on my home page was my view to the west. I would not step foot in the state now.
Stealing already happened in New Mexico. Like CA, Dims control all three branches of government in NM. We had a conservative Pub in NM district 2 covering southern NM including the O&G production areas. Dims gerrymandered the state to put SE NM in the same Congressional district as poor northern NM and the Navajo Indian Reservaton in NW NM. To replace those conservative voters they moved the poor Hispanic population of south Albuquerque into NM-2 in one of worst gerrymandering results in the country.
Yup. It’s too bad. What a beautiful place. I’d wake up around 4 every morning to see the purple light coming off Longs Peak. Cut in a big window in the upstairs bedroom wall just for that. Your pictures are great but they make me sad for what has happened. I don’t even like looking at my pictures.
A side note about California election integrity by Trump...
“California more than any other place is so rigged. It's such a rigged election — If the vote in California was legitimate, which it's not, they have 38 million ballots. Everything is mail-in voting.” --President Trump is now saying “TRUCKLOADS” of evidence will be coming out proving the 2020 election was rigged (12.14.25)
Great. Just when gas in Commiefornia finally fell to below 4 Dollars a gallon. Navin “I was born a poor black child “ Newscum will blame Trump no doubt.
Enjoy, many just leave.
There will be winners and losers with the refiners closing down. EV sales have been averaging about 25% for the last couple of years in California. I suspect those sales levels will at least hold steady if gas prices continue to climb..
Can you imagine what damage Newsom would do as Present?//
You have a good example in Canada.
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