07 Apr 3 Bills Address Oil Refinery Closures, Clean Up and Job Losses

The Valero Refinery is seen from Park Road by Industrial Way in Benicia in 2024. (Ray Saint Germain / Bay City News)

By Ruth Dusseault
Bay City News

Even as gas prices rise because of the war in Iran, California’s transition away from fossil fuels is drawing scrutiny from several consumer and environmental groups.

On Tuesday, the groups voiced support for three bills moving through the California Legislature. One would extend a workforce development program for displaced oil and gas workers, such as those affected by the closure of the Valero Benicia Refinery. Two others address cleanup costs tied to decommissioning oil wells.

Assembly Bill 2157 would eliminate the 2027 sunset date for the Displaced Oil and Gas Workers Fund, a pilot program created in 2022. The $36.5 million program is administered by the California Employment Development Department and helps workers transition into new industries with comparable wages.

Introduced by Assemblymember Damon Connolly, D-San Rafael, and Assemblymember Isaac Bryan, D-Los Angeles, the bill also directs the EDD to work with the University of California, Berkeley Center for Labor Research and Education to develop recommendations for making the fund permanent.

“These are skilled workers, operators and tradespeople, technicians who are essential to safely shutdown and remediate facilities as we transition without a real plan,” said Marc Victoria, with the nonprofit the Climate Center. “Too many are left underemployed, struggling, or pushed out of the workforce entirely.”

In 2020 and 2021, the idling of the Marathon Petroleum Corporation in Martinez and the Santa Maria Refinery displaced more than 600 full-time workers and between 250 and 2,500 contract workers, according to a February statement from Connolly’s office. In January, Valero Refining Co. said it would idle its Benicia refinery by April and convert the site into an import terminal for refined gasoline from other markets, a move expected to affect more than 400 workers.

The other two bills are Senate Bill 1259, the Refinery Transparency Act, and Assembly Bill 2461, which would require oil and gas companies to provide financial assurance for the full cost of plugging and remediating wells.

“Oil and gas companies are legally obligated to pay to plug and remediate their wells, which is estimated to cost $21.5 billion statewide,” said Jason Pfeifle, with the Center for Biological Diversity, adding that many companies desert their wells and leave taxpayers with the bill.

Asian Pacific Environmental Network Action spokesperson Katherine Chu said Senate Bill 1259 does not set dates for closures, but it requires all refineries to disclose their estimated cleanup costs and timelines while they’re still operating.

“Without requirements for early planning, these companies can leave the overwhelming burden of figuring it out, and paying for it, to the public and to local communities,” Chu said.

“These are massive systems,” she said. “Although we suspect it may take tens of millions or even hundreds of millions of dollars and decades of time, we have no real insight into how much it will cost or how long it will take to decommission and clean up these large-scale facilities. Sharing a little bit of this information is all that SB 1259 asks for.”

Assembly Bill 2461 would require oil and gas companies to provide proof of funds or insurance-like coverage before or while they operate, so taxpayers are less likely to be left with cleanup costs.

The advocacy groups agreed that petroleum companies can afford to enact the stipulations of the bills, even as gas prices have been impacted by tariffs and the war in Iran.

“Average gas prices in California are nearly $6 a gallon as Trump’s illegal war on Iran drives a global oil shock,” said Woody Little with the clean energy advocacy nonprofit Last Chance Alliance, adding that preliminary data suggests that California refiners are making a killing due to a decrease in supply.

“The margins in March are $1.50 or more per gallon,” said Jamie Court of the nonprofit Consumer Watchdog. “This is what refiners take home in gross margins. Crude cost went up 60 cents because of the war. Refining margins went up a dollar. So, this is a pig-at-the-trough moment for the refiners.”

None of the three bills have reached a final floor vote in the California Assembly. The legislative session ends in August.

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