All I Want for Christmas Is Some Blue State Sanity

My wife asked for my Christmas list this year. For once, I had some suggestions: new slippers, a new belt (reversible black and brown, so I only need one), and a bottle of Irish Cream for my coffee Christmas morning. I’m a man of few wants and needs. If you were to ask me for a shoot-for-the-moon unrealistic desire, however, I would probably tell you that I want either a winged horse or for blue states to stop self-destructing.

Having watched the news over the last few weeks, it has become apparent that the winged horse seems more likely. That’s not good for the people in liberal-dominated states or for the country.

Though one could choose from many of the states being run into the ground by Democrats, California’s ongoing train wreck is one of the most spectacular. The Golden State, the land of natural beauty, natural resources, entertainment, commerce, and dreams, is about to find out that the Little Old Lady From Pasadena’s ability to get around is about to get very complicated.

The news from California is that the oil company Valero is taking a $1.1 billion loss to leave and shut down its Benicia refinery before April 2026 rather than continue to submit to Governor Gavin Newsom’s regulatory and environmental mandates. Along with the loss of Phillips 66’s Los Angeles refinery, which is set to close this month, Valero’s departure means driving in California is about to become prohibitively expensive and perhaps a national security risk.

According to a Moneywise article on the loss of the refineries, journalist Victoria Vesovski reports that the Benicia refinery alone has been processing about 170,000 barrels of oil per day for over a quarter century. Between it and the Los Angeles refinery planning to close, this would amount to the loss of almost 20 percent of California’s refinery capacity. The article notes that, according to AAA, California gas prices are averaging $4.34 per gallon as of this month—about $1.40 more than the national average. 

The popular X account Wall Street Apes posted analysis of what will happen to those prices after the closures: “University of California, Davis economists calculate a 40-cents per gallon increase the moment Phillips 66 closes their Los Angeles refinery this December. Then another 81 cents when Valero shuts down four months later in April. That totals a $1.21 per gallon increase by August 2026, your 15-gallon fill-up jumps from $70 to at least $95.”

According to Wall Street Apes, the Stanford Energy Institute predicts gas prices could go up to $8 per gallon during disruptions. The Moneywise article cites petroleum expert Mike Ariza, who suggests that it might be $10 or even $12 per gallon. Many people like groovy 70s music and clothing. I doubt they will like a repeat of that decade’s extreme prices and gas shortages.    

What makes California’s predicament so bad is that, as Legal Insurrection’s Elizabeth Stauffer explains, “In an attempt to reduce air pollution and greenhouse gas emissions, the state has mandated the use of special blends of gasoline, which are known as ‘CARBOBs — California reformulated gasoline blend stock for oxygenate blending.’” You can’t simply get these blends from other American oil states. “Instead,” Stauffer explains, “supply comes largely from a shrinking number of in-state refineries or from a handful of foreign refineries — primarily in countries like South Korea, India, and Singapore — that have the specialized equipment needed to produce CARBOB fuel.”

Valero’s and Phillips 66’s departures will not just dent Californian bank accounts. Oregon and Washington gas prices will likely go up as well. An Energy News Beat article notes that Oregon is a “fuel island,” with daily demand of around 100,000 barrels, which it gets mostly from California and Washington. “Governor Kotek has publicly panicked over the cascading effects, warning of potential supply shortages and price spikes that could cripple Portland’s economy.” If Washington refineries, under pressure from similar mandates, start contracting, Oregon too will start having to import gas, leading to the same worries of $8 per gallon and above prices during disruptions.

Nor will these changes merely affect personal and business pocketbooks. As Moneywise’s Vesovski explains, they may negatively impact national security. California refineries help supply “the largest institutional consumer of petroleum” – the U.S. military. With 30 bases in California alone, and others in Nevada and Arizona, all depending on California refineries, the loss of the two in question means that our military will be made more dependent on foreign actors. Vesovski quotes California Representative Stan Ellis, who told a local ABC affiliate: “If China or Russia decides to pull the plug on India getting crude for us, guess what? It’s catastrophic.” He added, “We’re talking about military preparedness being affected, and we’re talking about gas lines.” 

The Newsom administration denies there is any threat to national security, claiming that new California legislative action this past year, as Vesovski reports, will result in “authorizing up to 2,000 new oil drilling permits annually.”

That is indeed wonderful, but how long will it take to really get drilling in California’s crazed regulatory environment? Even left-wing outlets such as the Guardian are reporting on the fact that, almost a year after California’s horrific Pacific Palisades fire, there are still no actual rebuilt homes.

More importantly, isn’t the relevant energy problem refining capacity? Even if they drill, baby, drill, where will it be refined? The Newsom response doesn’t answer the question.

“Go Granny Go,” but, for heaven’s sake, don’t go too far without securing a personal loan for gas. I pray California and other blue states will turn things around. In the meantime, I’m asking that the Little Old Lady From Pasadena get a winged horse for Christmas, too. She’ll need it.

David P. Deavel teaches at the University of St. Thomas in Houston. A past Lincoln Fellow at the Claremont Institute, he is a Senior Contributor at The Imaginative Conservative. Follow him on X (Twitter) @davidpdeavel.