A new policy study warns that California is on the brink of a significant gasoline supply disruption, with refinery closures and pipeline failures threatening fuel availability and driving prices even higher for motorists. In Blueprint to Address California’s Gasoline Insecurity, Michael A. Mische, James W. Rector, and Joseph B. Silvi argue that state energy policy has shifted too far away from in-state oil production, leaving the state highly dependent on foreign imports and vulnerable infrastructure. Mische wrote an earlier report in 2025 finding that falling in-state gasoline production could push prices to more than $8 per gallon by the end of 2026.
The Blueprint’s executive summary highlights the key drivers behind the crisis: declining in-state crude oil production, the planned shutdown of northern California’s last major crude pipeline, and the closure of key refineries. Together, these factors contribute to a fragile fuel supply system that could push California’s gasoline prices well above the national average in 2026.
According to the authors, California currently imports more than 65 % of its crude from overseas, shifting reliance away from domestic sources and exposing the state to geopolitical and transportation risks. Refinery numbers have plummeted from more than 40 in the 1980s to just a handful today, a decline the authors attribute to high regulatory costs and policy decisions discouraging local production.
A critical infrastructure concern centers on the San Pablo Bay pipeline, the sole northbound crude line feeding Northern California refineries. Under current conditions, its operator has signaled an imminent shutdown—possibly as soon as the end of 2025—due to unsustainably low throughput and rising operating losses. Without it, the state would need to shift to tanker trucks or maritime shipments, adding up to 50 ¢ to $1 a gallon in fuel transportation costs.
The authors argue that recent legislative efforts, such as SB 237, which allows limited new drilling, and AB 30, which enables expanded gasoline blends, are insufficient to stabilize supplies or prices, and may offer only marginal benefits.
The report calls for several urgent policy actions to avert worsening supply insecurity. This includes reopening and expanding in-state production infrastructure such as the Las Flores Canyon pipeline and offshore fields to boost crude supplies. It also includes state financial support to maintain refinery operations and federal engagement to preserve critical petroleum infrastructure.
The authors say failure to act could accelerate refinery closures, deepen international fuel dependence, raise consumer costs, and jeopardize state and national energy security.