As 2025 draws to a close, Texas has proven yet again that balanced, sensible policies that welcome investment while protecting our environment lead to a strong and profitable energy industry. Texas’ industry-friendly regulatory landscape has led to the creation of jobs, generated economic growth, and bolstered our nation's energy security.

Texas continues to lead the nation in both crude production and refining under a balanced, pro-energy framework that encourages investment while maintaining strong environmental standards. As America’s top producer of refined products, Texas is attracting projects and capital fleeing restrictive jurisdictions, creating high-wage jobs, generating billions in economic activity, and bolstering the national supply chain. This approach keeps fuel affordable, buffers against regional shortages, and enhances overall U.S. energy and national security.

Meanwhile, our fellow Americans in California continue to pay high gas prices due to policies that do little to address emissions while weakening our national energy security. The state’s anti-fossil fuel policies are leading to the premature shutdown of critical refining capacity, driving up energy costs for millions, and making the state increasingly reliant on foreign nations for access to critical energy supplies.

Phillips 66 has ceased crude processing at its Los Angeles-area refinery (139,000 barrels per day capacity) and is completing a full closure this month. Valero has announced it will idle its Benicia refinery (170,000 barrels per day) by April 2026. Together, these facilities account for approximately 20 percent of California’s total refining output, a capacity that cannot be easily or cheaply replaced under the state’s current regulatory landscape.

These refinery closures are not the result of market forces or technological obsolescence; they are the direct results of California’s burdensome regulations. Operators face escalating compliance costs, extended permitting delays, and significant penalties. Layered on top are unique fuel-blend mandates, cap-and-trade burdens, and a broader policy framework that actively discourages investment in domestic refining. The result is nothing more than practical: companies are choosing to exit the market rather than pour capital into operations rendered unprofitable by government inaction.

Golden State residents are paying the price, in addition to being the country’s second-largest gasoline consumer after Texas, Californians pay the highest gasoline tax in the nation, nearly 90 cents per gallon. Independent forecasts project gasoline price spikes of 40 cents to over $1 per gallon in the near term, with averages potentially exceeding $6 per gallon under certain scenarios by mid-2026. The state’s isolated fuel market and requirement for specialized blends limit domestic alternatives, forcing greater dependence on costly imports from foreign producers. These higher costs will cascade through the economy, raising expenses for commuting, food transport, delivery of goods, and virtually every sector reliant on affordable fuel. Lower-income households, small businesses, and anyone with long commutes will bear the heaviest burden.

The damage extends far beyond California’s borders too. Arizona sources roughly one-third, or more depending on seasonal factors, of its gasoline from California refineries and pipelines. Meanwhile, Nevada depends on them for nearly 90 percent of its supply, fueling Las Vegas’s tourism, Reno’s commerce, and everyday life across the state. These disruptions will drive regional price increases and frustrate supply reliability, repeating patterns seen in past West Coast shortages. Military installations across California, Arizona, and Nevada also rely on stable regional fuel logistics, and any added strain undermines readiness at a time when energy security is a top priority.

Nationally, the lost capacity represents less than 2 percent of U.S. refining, but the shift toward greater import dependence heightens vulnerability to global shipping disruptions, price volatility, and geopolitical risks as countries like India rely heavily on Chinese and Russian collaboration. Strong domestic refining, like that seen in Texas, strengthens America’s energy independence, while subpar policies, like that seen in California, weaken it.

There is no shortage of resources, technology, or expertise to maintain reliable, affordable energy, only a shortage of political will to support it. Texans should continue to support balanced policy and pro-energy elected officials that keep our state thriving, our fuel affordable, and our nation strong. As we look ahead to 2026, producers in Texas are ready to continue setting an example by delivering affordable, reliable, and responsibly-produced energy to the rest of the world.