California policymakers are exploring the possibility of state ownership of oil refineries to secure a reliable supply of gasoline as the number of operational refineries in the state continues to decline. This consideration arises as major oil companies reduce their presence in the refining sector, raising alarms about potential fuel shortages, higher prices, and logistical challenges.
Industry experts warn that the closure of key refineries could significantly disrupt the gasoline supply chain. Notably, the Phillips 66 refinery in Wilmington, California, is set to shut down permanently by the end of this year, leaving only eight major refineries capable of producing gasoline in the state. With Chevron and Valero also contemplating further closures, the urgency of the situation has prompted discussions about various options to stabilize fuel supply, including state intervention.
Despite the drop in gasoline demand due to more efficient engines and the rise of electric vehicles—25% of new car sales in California are electric—policymakers are concerned about the implications of refinery closures. The California Energy Commission has outlined several strategies to address the supply issue, including increasing gasoline imports from Asia and regulating refineries similarly to electric utilities.
Critics, including industry trade groups, argue that state ownership of refineries is fraught with challenges due to the complexity of refinery operations and the expertise required to manage them effectively. Governor Gavin Newsom’s administration has acknowledged the difficulties but remains committed to a gradual transition away from fossil fuels.
As the debate continues, California faces a pivotal moment in its energy policy, balancing the need for fuel supply with the broader goal of reducing reliance on petroleum. The situation highlights the intricate dynamics of energy regulation and market forces in a state known for its progressive environmental policies.
For further updates on this evolving story, stay tuned to Newspot Nigeria.
Source: LA Times
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