(Crankers) Business will be tough in the state of California if and when gas prices skyrocket to $8 per gallon, or more. This comes after two big oil refineries shut down.
Everyone from state legislators to people in various businesses are highly concerned about this.
The Valero’s Benicia location and Phillips 66 plant located near Los Angeles are set to close down by 2026. The lost jobs and halted production could have a major impact on the community and the state entirely.
Moneywise reported that both shutdowns will cease producing approximately 300,000 barrels-per‑day of refining capacity, representing about 20% of the product used across the entire country.
Why are the refineries in California shutting down?
Moneywise continued reported that Valero is blaming regulatory pressures and fines, citing an $82 million penalty dating back to last year. Phillips 66 also mentioned California having strict environmental regulations that got in the way. However, some believe those measures are needed, but many want to know where the balance is between regulations and production.
This appears to be a battle of strict regulations vs mass production and finding the middle ground that keeps everyone safe, gas prices cheap, and production at high quality will be a major challenge.