The Valero Refinery in Benicia is set to cease operations by 2026, a significant change for the local community.
Valero Energy Corporation plans to shut down its Benicia Refinery by April 2026, causing concern among the local community and the nearly 400 employees. This decision follows a recorded $1.1 billion pre-tax impairment charge affecting both Benicia and Wilmington refineries. City officials are aware of potential changes and have pledged to work closely with Valero, navigating through the economic implications while maintaining transparency. The refinery has significantly contributed to California’s oil capacity since 2000 but has faced scrutiny over air quality violations.
In a whirlwind of recent developments, the city of Benicia is bracing itself for some significant changes as Valero Energy Corporation’s subsidiary, Valero Refining Company-California, has submitted a notice to the California Energy Commission. This notice reveals intentions to idle, restructure, or even cease operations at the Benicia Refinery by the end of April 2026.
Valero is actively exploring strategic alternatives for its operations in California as it looks toward the future. This news undoubtedly sends ripples of concern through the local community, alongside the approximately 400 employees who have made the Benicia Refinery their workplace for years. Lane Riggs, who leads the company as Chairman, CEO, and President, has acknowledged the potential impact these operations changes might have on employees, business partners, and the wider community.
Adding to the complexity of the situation, Valero recorded a pre-tax impairment charge of a whopping $1.1 billion for both the Benicia and Wilmington refineries. This charge will be treated as a special item and will be excluded from the first quarter of 2025 adjusted earnings. Of that total, about $337 million is earmarked for expected asset retirement obligations as of March 31, 2025.
Valero has been a pillar in the Benicia community since it acquired the refinery in 2000 from Humble Oil (now part of Exxon). The facility has the capacity to process an impressive 170,000 barrels of crude oil per day, accounting for around 8.94% of California’s overall crude oil capacity. However, despite its significance, Valero has faced previous scrutiny over air quality violations, which have led to hefty fines, including an historic $84 million punishment for toxic emissions.
City management has expressed their understanding of the situation, indicating that while the announcement isn’t entirely shocking, it does represent a challenging time for the area. Local officials have noted that they had prior knowledge of potential organizational changes and say they will work closely with Valero to understand how these developments might affect the local economy and the community at large.
As discussions continue between city officials and Valero management, city leaders are calling for patience as they seek more clarity on operational changes and potential economic impacts. Recently, the Benicia City Council passed an Industrial Safety Ordinance, which city officials affirm is not directly linked to Valero’s operational decisions.
As the community navigates through this transitional period, Mayor Steve Young has emphasized a commitment to transparency and collaboration. While Valero is known for its work in producing low-carbon liquid fuels and operating 15 refineries across the U.S., Canada, and the U.K., the focus now is on what this refinery’s potential closure will mean for Benicia.
In the face of these uncertain times, the local community remains vigilant, anticipating updates from company leadership while preparing to support the workforce that has long contributed to the city’s economy. The next few years will undoubtedly be critical for the refinery, its employees, and the larger Benicia community as they work together to face the changes ahead.
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