Valero plans to shut down Benicia refinery by next year

Energy giant Valero appears to be planning to shut down its oil refinery in the Bay Area after 25 years.

The company said in a news release Wednesday morning that the California-based Valero Refining Company notified the California Energy Commission of its intention to cease refining operations at its Benicia refinery by the end of April 2026.

Valero added that it continues to evaluate strategic alternatives for its remaining operations in California.

"We understand the impact that this may have on our employees, business partners, and community, and will continue to work with them through this period," said Lane Riggs, chairman, CEO and president of Valero.

The energy giant is responsible for about $10 million in Benicia revenue each year, which is about 10% of the city's general fund budget.

"We are going to have to adjust accordingly," Benicia Mayor Steve Young said. "We may have to reduce our spending and our expenditures if we are going to lose that much revenue."

The facility employs around 400 people.

The mayor said the city had no prior warning of the looming closure, but said there have been signs Valero's time in the city was coming to an end.

"I've had discussion with them over the last year where they have indicated that corporate is not happy with what is going on in California," Young said.

The mayor said he plans to be transparent with any budget impacts with the community and hold public discussions on the issue.

When asked why the refinery was closing, the company referred NBC Bay Area to a news release announcing the closure.

The release noted Valero is working to address impacts to employees and the community, but does not include any clear reason for the closure.

However, in prior published published reports the company has cited California's high costs and strict environmental regulations as reasons for shuttering the Benicia plant.

"If they keep up with everything pollution wise, I'd rather see them stay," Benicia resident Paul Gamez said. "If one is going to go down, it's going to start happening all over the place."

Not everyone is sad to see the closure.

"It is gross," Benicia resident Cynthia Thrush said. "I've been breathing it for many years and I'm sure it's not healthy, but I don't know. I hope they restructure somehow."

In October, the Valero Refining Company was fined $82 million for significant air pollution violations at the Benicia refinery in what was the largest penalty ever assessed by the Bay Area Air District.

The Valero Refining Company also operates a refinery in the Wilmington area of Los Angeles.