Developing a Framework for California’s Petroleum Market Transition

California's petroleum supply infrastructure is undergoing a rapid and consequential transformation. The recent closure of two major in-state oil refineries (Phillips 66 Wilmington and Valero Benicia) and the conversion of two others to renewable fuel production (Phillips 66 Rodeo and Marathon Martinez) has significantly reduced the state's refining capacity, driving a growing dependence on imported fuels. This shift has heightened policymaker concern over fuel price volatility, the loss of high-paying union jobs, erosion of local tax bases, and broader threats to energy security. These challenges may fall unevenly across California's population, with potential fuel cost increases, job losses, and pollution burdens borne most acutely by low-income households and communities of color — many of whom live adjacent to the refinery infrastructures in transition.

This project supports the Division of Petroleum Market Oversight (DPMO) at the California Energy Commission, which is responsible for providing guidance and recommendations to state policymakers regarding the transportation fuels market and fuels prices. It aims to produce an evidence-based conceptual framework for understanding and navigating this supply transition. The analysis is organized around four guiding questions examining fuel supply vulnerability and price stability, lifecycle greenhouse gas emissions of imported versus domestically refined fuels, employment and wage outcomes for refinery workers, and fiscal and public health impacts on host municipalities and fenceline communities. 

Anticipated deliverables include a comprehensive final report and supporting materials designed to be useful to DPMO, sister agencies, legislators, and nonprofits engaged in California's energy transition. By synthesizing quantitative and qualitative evidence across market, environmental, labor, and community dimensions, this project will provide the analytical foundation needed to identify equitable and effective policy responses to California's evolving petroleum market.