😱 California’s Gas Crisis: How Ignoring Bipartisan Warnings Led to Soaring Prices Across the Southwest! 😱

What happens when a governor dismisses a bipartisan warning and an entire region suffers the consequences?

I’m Elizabeth Davis, and welcome to the Elizabeth Davis channel.

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This story is crucial—it impacts millions across three states, and it’s essential that everyone understands what’s happening in the American Southwest right now.

On September 10, 2024, something unusual occurred.

Two governors from opposing political parties joined forces with a single urgent message directed at California.

Arizona’s Democratic Governor Katie Hobbs and Nevada’s Republican Governor Joe Lombardo co-signed an emergency letter to Sacramento, expressing their grave concerns about California’s new refinery regulations.

Their message was clear: these new regulations were poised to trigger fuel shortages and massive price increases across the entire Southwest.

This wasn’t mere political posturing; it was a genuine alarm about the survival of their states.

Arizona and Nevada are not just neighboring states; they rely heavily on California’s fuel infrastructure, with Arizona sourcing 60% of its gasoline from California refineries and Nevada depending on California for 70%.

The pipelines run eastward from California, and there are no alternative supply routes available.

When California’s refinery system falters, Arizona and Nevada have no options—they simply pay more.

The governors understood this reality, but California Governor Gavin Newsom did not share their concern.

On the same day he received their letter, Newsom took to Twitter to push back against their warnings, arguing that California’s refineries were to blame for the supply issues.

According to him, these companies had deliberately chosen not to replace supply while their facilities went offline, which drove up prices.

He framed his proposed regulations as consumer protection, claiming they would save Californians hundreds of millions of dollars by preventing price spikes.

As reporters pressed him for answers, his tone became sharper, expressing visible frustration at the idea that oil companies could take advantage of taxpayers.

He positioned himself as the defender of everyday Californians against corporate greed, seemingly oblivious to the warnings from his neighboring governors.

Just six days later, on September 16, 2024, Newsom sent a formal response to both governors, accusing Hobbs and Lombardo of merely echoing talking points from the oil industry.

Think about that for a moment: a Democratic governor trying to protect her citizens from fuel shortages was labeled a puppet of big oil by another Democratic governor.

The bipartisan warning was dismissed as corporate propaganda, and Newsom was determined to move forward with his plan, regardless of the concerns raised by neighboring states.

On October 14, 2024, Newsom signed the new refinery regulations into law during a public ceremony, framing it as a victory against big oil and a stand against price gouging.

These regulations mandated that refineries maintain minimum fuel stock levels at all times and granted California authorities the power to establish acceptable profit margins for refining operations.

In other words, the state would now determine how much profit was too much profit.

However, just three days later, the first domino fell.

On October 17, Philips 66 announced the shutdown of its Los Angeles refinery, which produced 139,000 barrels of gasoline per day—roughly 8% of California’s total refining capacity.

Philips 66 stated that market dynamics made continued operation economically unfeasible, essentially confirming that California’s new rules rendered running a refinery impossible.

Then, in April 2025, Valero Energy dropped another bombshell, announcing the closure of its Benicia refinery, effective April 2026.

This facility produced 145,000 barrels per day, representing another significant chunk of California’s supply.

Valero’s chief executive made it clear that California’s aggressive fossil fuel reduction policies had created the most stringent and challenging regulatory environment in North America.

Together, Philips 66 and Valero accounted for 20% of California’s total refining capacity, meaning that one-fifth of the state’s gasoline production was disappearing within an 18-month period.

When Philips 66 made its announcement, Newsom’s office went silent for weeks.

Eventually, they issued a statement accusing the company of abandoning Californians and trying to evade regulations, but they never addressed whether the regulations themselves contributed to the decision.

State Senator Brian Jones recognized the impending crisis and sent a letter to Governor Newsom on May 6, 2025, warning that gas prices could hit $843 per gallon if refinery closures continued.

The USC Marshall School of Business even released a study predicting price increases as high as 75%.

Jones offered to collaborate with the governor to find solutions before the crisis worsened, but Newsom never responded—not a single acknowledgment.

By June 2025, the California Energy Commission, which reports directly to the governor, began raising red flags, warning that California needed to stabilize its refining operations immediately.

The problem was undeniable: refineries were leaving, and the state’s fuel supply was in jeopardy.

Finally, Newsom called for a collective effort to address the market disruption, but when reporters asked if he would reconsider the regulations that caused the problem, he dodged the question entirely.

In July 2025, the situation reached a desperate point.

California officials began secret negotiations to find a buyer for Valero’s Benicia refinery.

The same state that had driven Valero out with impossible regulations was now scrambling to keep them operational.

Reports indicated that California might offer hundreds of millions of dollars in subsidies to keep the refinery running, using taxpayer money to rescue a business that state regulations had made unprofitable.

Let that sink in: California passed regulations that made refining economically impossible, leading to closures, and then it sought massive subsidies to keep those same refineries open.

By August 2025, the California Energy Commission quietly delayed enforcement of profit cap penalties until 2030.

The very regulation Newsom had championed to protect consumers from price gouging was postponed for five years, indicating that it couldn’t work in the real world.

So, what happened to the fight against big oil greed?

Arizona and Nevada had warned California about all of this, referencing California’s own energy commission report that indicated these regulations could lead to fuel shortages.

Even Newsom’s experts had identified the risk, yet he signed the law anyway.

The infrastructure reality is straightforward: Arizona and Nevada cannot simply buy gas from elsewhere.

The pipelines run eastward from California, and there are no alternative supply lines.

When California’s refineries shut down, the entire Southwest feels the repercussions.

In February 2025, a fire at the Martinez refinery took 10% of California’s gasoline capacity offline almost overnight, causing immediate price spikes.

Arizona saw prices jump 50 cents in a single day, while Nevada’s prices increased by 40 cents.

This was precisely what the governors had warned would happen.

Newsom blamed the refinery for inadequate maintenance rather than acknowledging that his regulations left no room for disruptions.

The new rules required refineries to build massive storage tanks, with Chevron estimating that each tank would cost $35 million and take a decade to construct.

If you’re operating on tight margins in a state planning to ban gas-powered cars by 2035, why would you invest hundreds of millions in new infrastructure?

It simply doesn’t make sense from a business standpoint.

Throughout this turmoil, Newsom continued to assert that refineries were making excessive profits, but California’s own energy commission found no evidence of price gouging.

The Federal Trade Commission investigated and found nothing, and independent economists reached the same conclusion.

Despite the lack of evidence, Newsom needed a villain, so refineries became the target.

Meanwhile, California was in full panic mode, trying to prevent refineries from leaving, even after hitting Valero with an $82 million fine for air quality violations in December 2024—the largest environmental fine ever issued in California.

Now, California was considering offering hundreds of millions to keep Valero from closing, the same refinery it had just penalized for pollution.

Environmental groups that had previously supported the original regulations were furious.

Ten environmental organizations released a joint statement condemning the potential bailout as a plan that sacrificed communities for industrial profit.

The irony was impossible to ignore: environmentalists who had fought against refineries were now watching the state pay those same refineries to remain operational.

Gas prices kept climbing, with California’s average hitting $4.60 per gallon, and some Los Angeles stations charging over $6.

San Francisco saw prices reach $7 at certain locations.

The USC study predicted prices could hit $843 by the end of 2026, an estimate that might actually be conservative.

Arizona watched its prices leap from $3.25 to $4.75 since the refinery closures began, while Nevada’s prices surged from $3.40 to $4.90.

Both states were now paying 50% more for gasoline because California effectively drove out its own refineries.

And it’s only going to get worse.

California even started importing gasoline from Asia, with tanker ships burning bunker fuel crossing the Pacific Ocean to bring gasoline to a state that claims to be fighting climate change.

Shipping gas from South Korea is objectively worse for the environment than refining it domestically, yet California can claim lower in-state emissions even as global emissions increase.

In September 2025, Philips 66 began its phased shutdown, gradually reducing capacity, and with each phase that goes offline, pressure mounts on the remaining refineries.

As prices rise, more refineries consider leaving, creating a downward spiral.

On October 10, 2025, Fortune magazine ran a headline that said it all: “California’s Impossible Dream of Ending Fossil Fuels Isn’t Working.”

Even mainstream media could not ignore the disaster unfolding.

The article pointed out that California had drastically overestimated its ability to phase out liquid fuels while millions still drive gas-powered cars.

Then came the real twist.

On December 15, 2025, reports revealed that Governor Newsom was now considering allowing expanded oil drilling to keep refineries supplied with crude.

This is the same governor who promised to ban oil drilling by 2045.

Now he was issuing new drilling permits while criticizing other states on social media and quietly reversing his own policies.

The California Energy Commission admitted that current gasoline refining capacity is insufficient to meet demand, especially during maintenance periods.

They acknowledged that imports cannot replace local production, yet they implemented regulations that eliminated 20% of capacity.

By December 2025, gas prices were approaching $8 in California, while Arizona and Nevada were paying over $5.

Refineries are fleeing, taxpayers may end up bailing out the ones that remain, and tanker ships are importing gas from Asia.

Everything Arizona and Nevada warned about has either happened or is happening right now.

Through it all, Governor Newsom refuses to take responsibility.

He continues to claim that refineries are gouging consumers and insists his regulations are saving money.

Anyone who questions his policies gets labeled a defender of big oil.

Two governors—one Democrat and one Republican—warned California about this outcome, only to be dismissed as liars and corporate shills.

Now their states are paying the price, with gas prices soaring to $5 per gallon because California chose to ignore their warnings.

That bipartisan warning was ignored, and now we are witnessing the predictable consequences unfold with no one willing to accept blame.

California was warned.

It ignored those warnings, attacked the messengers, and now three states are suffering the fallout.

Gas prices are heading toward $8, and the governor responsible is pointing fingers at everyone except himself.

The refineries didn’t cause this crisis—the regulations did.

And the evidence was clear from the start.

California’s own energy commission predicted shortages.

Arizona and Nevada sounded the alarm.

Industry experts explained why the economics wouldn’t work.

Independent economists found no evidence of price gouging.

None of it mattered.

Ideology trumped reality, and now millions of people across three states are dealing with the fallout.

This isn’t about left versus right; Katie Hobbs is a Democrat, and she tried to warn California, only to be dismissed.

This isn’t about protecting oil companies; it’s about basic infrastructure reality and economic cause and effect.

When you make it economically impossible to operate refineries, refineries close.

When refineries close in a region with no alternative supply, prices spike.

When prices spike, neighboring states that depend on your infrastructure suffer.

It’s not complicated.

The tragedy here isn’t just the policy failure; it’s the refusal to acknowledge the failure, even as the consequences become undeniable.

California is now doing everything it said it wouldn’t do: subsidizing refineries, delaying profit caps, issuing drilling permits, and importing fossil fuels from across the ocean—all while maintaining that the original policy was correct.

Arizona and Nevada are collateral damage in California’s political experiment.

Their residents are paying 50% more for gas because a neighboring state decided ideology mattered more than infrastructure reality.

And there’s no end in sight.

As long as California refuses to acknowledge what went wrong, the crisis will continue to escalate.

More refineries will close, prices will climb higher, bailouts will grow larger, and finger-pointing will intensify.

This is what happens when warnings are ignored and accountability disappears.