Get The Facts on California’s Drastic & Costly Energy Policies

California’s approach to the energy transition has been politicized and reckless. Premature, policy-driven shutdowns have led to chaos and price volatility in fuel markets, and other mandates have helped drive electricity rates significantly higher. Energy costs are top of mind for working families and businesses struggling under California’s affordability crisis.

Rising Electricity & Gas Prices

Energy Reliability

California oil and gas is produced under the most stringent public health, safety, labor, and environmental standards in the world. Despite continuing demand for oil and gas to fuel transportation and provide grid reliability, the state has moved aggressively to shut down in-state production.

40% 2019 vs 2025

In-state production has fallen by 40% over the past six years.[1]

Due to the state’s high-cost regulatory environment, aging facilities that require major investments, future market uncertainty, and declining profitability, California has lost a significant amount of refining capacity in recent years.[2] By midyear 2026, California’s in-state refining capacity is set to decline more than 30% from 2019 levels. Meanwhile, state data show that gasoline consumption is declining by less than 1% per year.[3]

California will have just 7 refineries capable of making the state’s unique fuel blend – down from 16 just 10 years ago. California regularly does not have enough refining capacity to meet fuel demands, increasing the risk of recurring supply shortfalls and price spikes.[4]

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Rising Gas & Electricity Prices

Misguided policies are resulting in skyrocketing energy costs - devastating working families. California’s gasoline taxes and fees are three times higher than the rest of the U.S., while state mandates are causing electricity rates to soar with no end in sight.

$1.27 $0.37 $5.79 $3.96

Source: AAA, March 23, 2026, CDTFA, California Energy Commission,
and U.S. EIA [5]

THAN THE REST OF U.S. 3X MORE CA PAYS GAS TAXES:
$1.50 $1.00 $0.50 $0.00 EXCISE TAXES OTHER TAXES/FEES CALIFORNIA $0.61 $0.66 $1.27 REST OF NATION $0.29 $0.37

California has the highest taxes and fees on gasoline in the country. In comparison, state and local taxes and fees add $1.27 in costs to a gallon of gasoline in California.[6]

California electricity rates have increased 68 percent over the past six years and are now nearly double the national average.[7]

Electricity
Rates Up 68%

Since 2019

Energy transition mandates are contributing to soaring electricity rates – and the state still has a long way to go.

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CA Dependence on Foreign Oil

Energy policies are forcing Californians to rely more and more on distant energy sources to meet our needs. Relying on imports exposes our state to global supply risks and market volatility and increases global emissions as supplies are delivered by tanker from unstable foreign countries.

Because California is an energy island with no pipelines to import crude oil from the lower 48 states, policies shutting down local production force the state to increasingly rely on foreign oil imports to meet its energy needs.

California now imports more than 75% of the oil we use each day by tanker, sending $25 billion each year overseas [8], largely to foreign producers that do not share our environmental, labor, human rights, and safety standards.[9]

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Sources:

  1. U.S. Energy Information Administration data show California crude oil production during the first 10 months of 2019 averaged 431,900 barrels per day; during the first 10 months of 2025, the average had dropped to 259,400 barrels per day, a 39.9% decline.
  2. The Los Angeles Times, “Phillips 66 is closing Wilmington-area refineries after more than a century, marking the end of an era” 16 October 2024, reported: “Factors that played into the decision included an ‘onerous’ regulatory environment that increases costs, lower demand for gas, and a dwindling supply of California crude oil, forcing the refinery to rely more on expensive shipments from Alaska and foreign countries.” Industry expert David Hackett told the Times that “[Phillips 66] looked at the profitability of the place and compared it with the other businesses that they have, and it didn’t make the cut” noting that “over the last eight years, Phillips 66 has only broken even on its West Coast operations.” In an October 2022 letter to the California Energy Commission, Valero Energy noted that “California policy makers have knowingly adopted policies with the expressed intent of eliminating the refinery sector.” The letter explained in detail how “California is the most challenging market to serve in the United States” given its isolation, environmental requirements, and restrictions against increasing capacity. In October 2024, Valero’s chief executive warned that “all options are on the table” concerning the refiner’s continued presence in California given regulatory pressure on the industry.
  3. According to California Energy Commission, “Transportation Fuels Assessment: Policy Options for a Reliable Supply of Affordable and Safe Transportation Fuels in California” August 2024, the state had an estimated 1,125,000 barrels per day of gasoline production capacity at the end of 2019 (see Figure ES-2). In August 2020, the Marathon Martinez refinery conversion resulted in a loss of 96,600 barrels per day of gasoline production (60% of total refining capacity of 161,000 barrels of crude oil). In 2023 and 2024, the Phillips 66 Rodeo refinery conversion resulted in a loss of 72,000 barrels per day of gasoline production (60% of total refining capacity of 120,000 barrels of crude oil). In October 2024, Phillips 66 announced the 2025 closure of its Wilmington refinery, resulting in a loss of 83,400 barrels per day of gasoline production (60% of total refining capacity of 139,000 barrels of crude oil). In April 2025, Valero announced the 2026 closure of its Benicia refinery, resulting in a loss of 102,000 barrels per day of gasoline production (60% of total refining capacity of 170,000 barrels of crude oil). In total, the state is set to lose 354,000 barrels per day of gasoline production from the closure and/or conversion of these four refineries, which is 31.5% of total 2019 gasoline production capacity. California Department of Tax and Fee Administration data show 13.82 billion gallons of motor vehicle fuel consumed in 2021 and 13.41 billion gallons consumed in 2024 for an average annual decline of 0.75%. According to Joseph B. Silvi (UC Berkeley), James W. Rector (UC Berkeley), and Michael A. Mische (USC), “A STUDY OF SB 237 TO STABILIZE OIL PRODUCTION IN CALIFORNIA” October 2025, oil and gasoline consumption in California declined by less than 1% per year over the 2001 to 2024 period.
  4. See: California Energy Commission, “California’s Oil Refineries” and “California Oil Refinery History”; California Energy Commission, “Transportation Fuels Assessment: Policy Options for a Reliable Supply of Affordable and Safe Transportation Fuels in California” August 2024, states: “While no state is immune to the broader challenges of crude oil price instability, California faces fuel price instability even when the crude oil markets are stable. Gasoline price stability in the state is closely tied to the available refining capacity, which is highly sensitive to planned and unplanned refinery shutdowns … When an unexpected refinery shutdown occurs in California, refiners have limited options to resupply quickly, especially with gasoline.” Before the Phillips 66 Wilmington refinery closure was announced, a Chevron executive told Politico in October 2024: “We are about a half a refinery short in California today. In the past there was always one or two extra refineries. When somebody had trouble, there was capacity in the system to avoid the volatility. Now there’s no extra capacity. If we have a problem, the market moves quickly because we’re out trying to buy, and there’s nobody to buy from. We have to go to Korea, maybe Europe, maybe somewhere else. It’s supply and demand.”
  5. Prices based on AAA Fuel Prices as of March 23, 2026. California taxes and fees based on sources described in Footnote 6. Other state’s taxes and fees based on EIA, “State-by-state fuel taxes” as adjusted upward to reflect (1) Cap-and-Trade and LCFS fees paid in Washington and Oregon; (2) local optional sales taxes; and (3) fuel price increases between January and March 2026 (which affect sales taxes).
  6. Capitol Matrix Consulting calculation. As of March 23, 2026, the California tax and fee components are: $0.61 (state excise tax) + $0.22 (local sales tax) +$0.25 (cap and invest) + $0.17 (LCFS) + $0.02 (underground storage fee) for a total of $1.27 per gallon. For excise and sales taxes, see California Department of Tax and Fee Administration, “Sales Tax Rates for Fuels”; sales tax based on per gallon fuel price of $5.79 (via AAA as of March 23, 2026) and weighted average local tax rate of 3.75% (2.25% plus district taxes averaging 1.5%); for cap and invest and LCFS, see “Aggregated Data Reported” in California Energy Commission “California Oil Refinery Cost Disclosure Act Monthly Report”; for underground storage fee, see California Department of Tax and Fee Administration, “Tax Rates — Special Taxes and Fees.”
  7. As of November 25, 2025, the U.S. Energy Information Administration “Monthly Electric Power Industry Report” shows California’s average residential electricity rate in the first nine months of 2025 was $0.3221/kWh versus $0.1915/kWh in the first nine months of 2019, an increase of 68.2%. Legislative Analyst’s Office, “Assessing California’s Climate Policies – Residential Electricity Rates in California” January 2025 states: “California’s electricity rates are among the highest in the country. On average, residential electricity rates in California are close to double those in the rest of the nation.” 
  8. $25 billion is a Capitol Matrix Consulting estimate calculated using U.S. Energy Information Administration, “Europe Brent Spot Price FOB” average of $69.70 per barrel for the first 11 months of 2025 and the 392 million barrels of imported crude from 2024.
  9. California Energy Commission – Foreign Sources of Crude Oil Imports to California 2025