Importing CARBOB is a bad strategy for California

Here are five reasons why:

Reason 1

Cost:

State experts warn that relying on CARBOB imports can be "very expensive," noting "there is a cost associated with shipping the fuel."[1]

Reason 1

JOBS & LOCAL IMPACTS:

Refineries provide thousands of good-paying jobs and critical support for local governments. Benicia's mayor has called converting the Valero refinery to an import terminal "a lose, lose, lose scenario" with far fewer jobs and a pullback in public services due to lower tax revenues.[2]

Reason 1

INADEQUATE INFRASTRUCTURE:

California is an energy island with no pipeline connections to other U.S. refining centers. That means fuel imports must arrive by tanker, but the state doesn't have the port capacity, pipelines, storage, or other facilities necessary to meet demand that way. Infrastructure bottlenecks increase the risk of shortages and price spikes that working families can't afford.[3]

Reason 1

GLOBAL SUPPLY RISKS:

Only a handful of refineries worldwide are able to make California's cleaner-burning fuel, and shipments from foreign suppliers can take up to six weeks to reach California. Relying on foreign fuel imports exposes the state to unnecessary risks from tariffs, trade wars, embargoes, armed conflict, and shipping disruptions. Without substantial in-state production, California could be one international crisis away from lines at the pump.[4]

Reason 1

LOSS OF CONTROL:

Importing gasoline means California cedes power to international commodity traders with no accountability to our state. We'd be bidding for fuel in a market that doesn't share our values. California is already importing CARBOB and gasoline components from countries that purchase oil from Russia.[5]

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Sources:

  1. California Energy Commission, “Transportation Fuels Assessment: Policy Options for a Reliable Supply of Affordable and Safe Transportation Fuels in California” August 2024 states: “The cost of policies for importing finished fuel tends to be high, as there is a cost associated with shipping the fuel.” Beginning on page 68, the CEC considered multiple import strategies, often noting high costs as a risk. For example, a negative point for “Import Strategy: Resupply Compensation” states: “Refiners or blenders who can produce CARBOB fuel are limited … Could be very expensive if freight and price risk are ‘covered’ for the importer by the designated authority or program.” A negative point for “Import Strategy: Short-Term Imports” states: “Potential high cost to the state.”
  2. Benicia mayor Steve Young stated in August 2025 testimony to a joint Assembly hearing: “The [refinery] closure … seems certain will result in losses to the city directly of about $10 to $12 million a year. And we are not a big city where we can easily absorb that kind of a hit.” Young also stated: “Because we have a deep-water port and existing storage tanks, it seems inevitable that we’re going to be targeted as one of those places where we become a terminal. And that from our perspective is a lose, lose, lose scenario. There is no jobs that come with this. There are no taxes that come with this.”
  3. In its August 2024 Transportation Fuels Assessment, the California Energy Commission stated: “California is essentially a fuel island. There are no pipeline inflows of refined fuel into the state, and cargo ships delivering CARBOB take three to six weeks to arrive from distant facilities capable of producing CARBOB.” SFGATE, “Bay Area refinery closure could be ‘huge blow’ for Calif. drivers” 21 April 2025 reported: “‘Between the two of them [Phillips 66 Wilmington and Valero Benicia], they produce almost 20% of California’s gasoline, which is a huge blow,’ Borenstein said. ‘That means you have to bring in gasoline from all over the world, and that means you have to have port facilities, and you have to have pipelines, you have to have places to store it, and California is not prepared on those fronts.’ At this point, Borenstein said it’s difficult to predict which refineries outside California are interested in producing the state’s mandated gasoline. But if California ‘does it right,’ he said there will be a less noticeable impact on prices, with an increase of less than $1 per gallon. ‘It’s hard to know,’ he said. ‘If we don’t get prepared, then I’m more confident that it will be many dollars per gallon, just because you can’t take 20% of the supply away without having a very significant impact on the price.’” See also: Turner, Mason & Company Comments on SB X1-2, “Transportation Energy Supply Chain Infrastructure and Investment Study (TESCII)” September 2024.
  4. According to California Energy Commission, “Transportation Fuels Assessment: Policy Options for a Reliable Supply of Affordable and Safe Transportation Fuels in California” August 2024: “Refiners or blenders who can produce CARBOB fuel are limited.” The Assessment also states: “Gasoline and blendstock ship cargos take three to six weeks to arrive from overseas, presenting significant challenges for unplanned events that constrict supply.” Attacks on tankers in the Persian Gulf and the Red Sea provide examples of geopolitical risks inherent in any crude or refined product import strategy. In addition, Iran has repeatedly threatened to block the Strait of Hormuz (as it did during the 1980s) through which a fifth of the world’s oil trade flows every day. Iran seized a cargo ship in the Strait as recently as November 2025.
  5. In their white paper “COMMODITIES DEMYSTIFIED: A guide to trading and the global supply chain” (March 2018), global commodities trader Trafigura states: “Commodity traders are not interested in the absolute level of commodity prices, high or low, but in the geographic or technical price differentials of commodities that make moving them around the world and transforming them profitable.” In December 2025, ABC 10 reported on concerns that California’s refinery closures could present national security issues, noting that the state increasingly imports fuel products from India, which sources crude oil from Russia.