Senate Passes Legislation to Increase Transparency for Oil Refinery Closures

SB 1259 directs the state to develop guidelines for estimating the costs of refinery closures, and refiners to deliver reports on what’s expected 

SACRAMENTO – The Senate on Wednesday passed legislation by Sen. Catherine S. Blakespear, D-Encinitas, to give communities and state agencies a realistic picture of how refinery sites will be cleaned up, if and when they close. 

SB 1259 would direct the State Water Board to develop an overview of the methods, costs and timelines to clean up the soil and groundwater upon refinery decommissioning and remediation. The bill would then require oil refiners to submit reports to the state identifying the costs and obligations expected, should they close.

Over the past few decades, the U.S. petroleum refining sector has seen significant changes. While fuel demand has only modestly begun to decline, the country has seen refineries consolidate for decades, providing nearly the same refining capacity with roughly half the number of larger, more efficient refineries. 

California had more than 40 refineries operating in the mid-1980’s, but that number has dwindled to seven. Each closure created significant impacts on those who worked in, lived around, and depended on the refinery. This trend continues with the recent and planned closures of refineries in Los Angeles and Benicia.  

As the world moves away from fossil fuels, California is charting a path through the “mid-transition” phase where petroleum is necessary but scaling down, and where clean alternatives are also necessary but still scaling up. A recent report by the California Energy Commission (CEC) has highlighted the necessity of a holistic transportation fuel transition strategy for getting through this challenging period. 

The report said that “Understanding existing regulatory authorities, site assessments, cleanup cost and duration estimates, and applicable financial commitments would help support processes to realize the opportunities for the future of land affected by the transition.” 

SB 1259 provides this needed understanding. The CEC report also noted that other sectors of the energy industry already have similar requirements. 

"Coal mining, oil and gas extraction, nuclear, and — in some states — solar and wind power, have various degrees of requirements for establishing remediation plans and upfront financial commitments,” the report said. “If refineries in California are not subject to proactive, specific, and consistent requirements, it could leave public agencies attempting to ensure full and timely remediation for those sites on a case-by-case basis and challenge host communities’ ability to envision and implement their post-closure future."

In presenting the bill, Sen. Blakespear said having a plan for the eventual closure and cleanup of oil refineries is like having a will. No one likes to think about dying, she said, but they should have a plan for it. 

“We want refineries to remain open as long as they are needed, but when it’s time for them to close, we must be ready,” Sen. Blakespear said. “SB 1259 ensures we have the information we need to plan appropriately so we can be prepared and limit the negative impact to communities, workers, local governments and the state as a whole.”

The Senate Environmental Quality Committee, which is chaired by Sen. Blakespear, held an informational hearing in February exploring the issues created by refinery closures that included testimony from CEC Vice Chair Siva Gunda. As the state continues to transition away from fossil fuel in coming years, Gunda encourages developing concurrent strategies to support near-term fuel supply, system-wide reliability and a holistic transition. He said having more information about how that will work, and the impact of refinery closures, is crucial.

SB 1259 helps communities, and the state, prepare and plan for these coming closures, instead of scrambling to respond only after finding out a closure is coming. By directing the State Water Board to establish standards and then requiring oil companies to disclose their financial obligations for decommissioning and remediation, the bill is one important piece in managing California’s transition to a carbon-free energy future. 

The legislation is sponsored by the Asian Pacific Environmental Network (APEN), California Environmental Justice Alliance and Communities for a Better Environment. APEN and Communities for a Better Environment recently published a report titled “Before the Last Drop: Lessons from the Phillips 66 Los Angeles Refinery Closure.” 

SB 1259, which passed on a 21-10 vote, goes next to the Assembly for consideration. The bill is supported by more than 50 organizations, including California Environmental Voters, Coalition for Clean Air, Consumer Attorneys of California, Natural Resources Defense Council, Sierra Club California and Union of Concerned Scientists.

Sen. Blakespear represents Senate District 38, which covers northern San Diego County and southern Orange County. To learn more about the district and Sen. Blakespear, visit her Senate website.