California’s oil and gas industry is being told, in increasingly blunt terms, that the status quo is over. Governor Gavin Newsom is pairing a high profile warning to refiners and producers with a dense web of new rules, climate mandates, and market interventions that will reshape how fuel is made, priced, and disclosed in the state. The message is simple: brace for a future in which fossil fuels are more tightly regulated, more transparent, and steadily less central to California’s economy.
At the same time, the governor is trying to keep drivers from paying the price for that transition at the pump. His administration is experimenting with new fuel blends, inventory requirements, and refinery oversight to keep gasoline affordable even as refineries close and climate standards tighten. The result is a high stakes test of whether a major oil consuming state can aggressively decarbonize without triggering chronic fuel shocks.
Newsom’s warning shot and the politics of high gas prices
The Governor of California, Gavin Newsom, has moved from technocratic rulemaking to a more confrontational posture, issuing a public warning to the state’s oil and gas companies that he will not allow prices to “spiral out of control” or profits to come at the expense of consumers. In a recent appearance, he framed the industry as a powerful but shrinking player in a state that is determined to cut emissions and protect drivers, signaling that regulators will scrutinize refinery behavior, pricing strategies, and supply decisions more aggressively than in the past, a stance underscored by his latest warning to industry.
That hard line comes after a bruising period in which California Has Highest Gas Price in the US became a recurring political headline and a liability for Newsom’s national ambitions. Earlier in his term, he tried to balance pressure on refiners with outreach, courting executives even as he signed new oversight laws, a dual track approach that reflected both the state’s climate goals and the reality that drivers still rely on gasoline. Two days after Newsom signed a bill on fuel inventories in Oct 2024, Phil, a senior industry voice, publicly questioned whether Sacramento understood the operational constraints refiners face, a sign of the mistrust that still colors these talks and that was captured in reporting on how Newsom navigates gas prices.
Refinery closures, supply risks, and pressure from both parties
Behind the rhetoric is a structural squeeze on California’s fuel system. With the closing of another major refinery in April 2026 California will be down to 11 refineries from a high of 40, a dramatic contraction that leaves the market more vulnerable to outages, maintenance problems, or accidents. Similarly, Phillips 66 ceased operations at its Wilmington facility in the fourth quarter of 2025, removing another key source of in state supply and heightening concerns about jobs, local tax bases, and the risk that more fuel will have to be imported from abroad, a trend detailed in accounts of how With the industry retrenching…