California's Inconvenient Truths
California's Energy and Fiscal Crisis
Policy Analysis & Investigative Report — June 2026
How Sacramento drove itself into a systems catastrophe that analysts warned about for years — and why a British-born former Fox News host is now leading the race to replace Gavin Newsom.
I. A Crisis Decades in the Making
In August 2022, the California Air Resources Board unanimously adopted the Advanced Clean Cars II (ACCII) regulation — one of the most ambitious vehicle emissions mandates in world history. Beginning with model year 2026, 35 percent of new passenger cars sold in California would have to be zero-emission vehicles, escalating to 68 percent by 2030 and reaching 100 percent by 2035. The measure, backed by Governor Gavin Newsom as a cornerstone of his climate agenda, was celebrated by environmental advocates as a global template for decarbonizing transportation.
What it actually was, critics argued from the outset, was a single-variable intervention in a tightly coupled, multi-domain system — one that would predictably destabilize the grid, the state's transportation funding mechanism, the liquid fuel supply chain, and the economic survival of millions of working-class Californians who cannot afford electric vehicles and have no realistic transit alternatives. Those critics were not wrong.
By June 2026, the consequences are arriving on schedule: California has lost nearly 20 percent of its refining capacity in 18 months; gasoline prices have surged to among the highest levels in state history; the state faces a structural transportation funding gap of $31.3 billion over the next decade; a vehicle mileage tax is actively being piloted as the inevitable replacement for a gas-tax revenue stream that the EV mandate is destroying; and a Republican candidate is leading a California gubernatorial primary largely on the strength of his argument that Sacramento's energy policies have become an economic attack on its own citizens.
The systems thinkers who warned about this were not predicting the future. They were reading the documentation that CARB's own staff had produced.
II. The Architecture of the Mandate
The ACCII regulation sits atop a 50-year legal framework rooted in Section 209 of the federal Clean Air Act, which normally preempts states from setting their own vehicle emissions standards. California received a unique waiver authority in the original 1970 legislation because it had pre-existing air quality regulations predating the federal program — a recognition that Los Angeles's smog crisis was then among the worst in the world. Any state may subsequently adopt California's standards in lieu of federal ones, a provision that 11 other states and Washington D.C. had used to adopt ACCII's requirements, collectively covering nearly 40 percent of the U.S. new-car market.
CARB adopted ACCII in August 2022. The Biden administration's EPA granted California the required waiver in late 2023. The regulation requires automakers to meet escalating zero-emission vehicle (ZEV) sales percentages or purchase compliance credits from manufacturers that exceed their targets. Importantly, ACCII does not mandate any specific technology: battery-electric, plug-in hybrid, and hydrogen fuel cell vehicles all qualify, though the practical market is dominated by battery-electric vehicles.
- Model Year 2026: 35% of new passenger car sales must be ZEV
- Model Year 2028: 51% ZEV
- Model Year 2030: 68% ZEV
- Model Year 2035: 100% ZEV (effective ban on new ICE vehicle sales)
The mandate was accompanied by no binding preconditions. Grid capacity, charging infrastructure density, consumer affordability, refinery transition planning, and transportation funding replacement were all treated as implementation details — challenges to be managed downstream rather than go/no-go conditions baked into the regulatory framework. Policy analysts and engineers who argued for conditional trigger language — requiring that grid capacity, infrastructure, and affordability benchmarks be met before each escalation step took effect — were told, in effect, that flexibility creates compliance off-ramps. Hard deadlines, CARB argued, drive investment.
The investment that actually followed was a cascade of refinery closures.
III. The Refinery Collapse
The connection between the EV mandate and California's disappearing refinery capacity is not a conservative talking point. It is documented in the filings of the companies involved, in analyses by the U.S. Energy Information Administration, and in the California Energy Commission's own market assessments.
Phillips 66 operated a 147,000-barrel-per-day refinery in Wilmington, Los Angeles — the largest in Southern California. In August 2024, two days after Governor Newsom signed legislation expanding the state's regulatory authority over refinery operations, Phillips 66 announced the facility would close by the end of 2025. The company cited regulatory pressure, declining long-term gasoline demand driven by the state's EV policies, the cost burden of California's unique reformulated fuel blend requirements, and the cap-and-trade program's escalating costs. The refinery produced its final barrel of conventional fuel in October 2025.
Valero Energy, which had operated its 145,000-barrel-per-day Benicia refinery north of San Francisco since the 1990s, announced in April 2025 that it would close the facility by April 2026 — writing down $1.1 billion in the process. Valero cited years of regulatory escalation, including an $82 million fine for air pollution violations that was reportedly more than 360 times the legal limit, along with the long-term investment uncertainty created by the state's explicit goal of eliminating gasoline consumption. The Benicia refinery ceased operations on January 31, 2026.
The combined effect: California has lost approximately 20 percent of its in-state refining capacity within 18 months. Analysts at the Breakthrough fuel intelligence firm estimate this represents 17.5 percent of total capacity. The EIA has characterized the supply shortfall as likely to have an "outsized" impact on the region because California cannot easily source refined product from other parts of the country — the West Coast is geographically isolated from Gulf Coast refining hubs, with no significant pipeline connections. Imports from Asia and the Gulf Coast via tanker are the only significant alternative sources, and they carry meaningful premium freight costs.
- 2020: Marathon Martinez refinery — closed
- 2024: Phillips 66 Rodeo refinery — converted to renewable diesel (conventional capacity eliminated)
- Oct. 2025: Phillips 66 Wilmington (Los Angeles) — 147,000 bpd conventional capacity offline
- Jan. 31, 2026: Valero Benicia — 145,000 bpd offline; $1.1B write-down
- Remaining operational: Seven refineries; combined capacity approximately 80% of 2022 levels
- At risk: PBF Torrance facility under ongoing regulatory pressure
The price impact has been immediate and severe. California gas prices surged 40 cents in approximately two weeks in early 2026 as the Benicia closure's effects worked through the supply chain, with AAA recording a statewide average of $4.58 per gallon — against a national average of $2.92. University of California, Davis economists projected a combined $1.21 per gallon increase from the two closures combined. Petroleum market analyst Patrick De Haan, reacting to the Valero announcement in April 2025, wrote simply: "WOW ... It's clear that the political environment in California has been hostile to refiners, and the state badly needs to revise its mentality or face a declining number of refineries and higher prices." Expert analysts have cited scenarios in which California gasoline could reach $8 to $12 per gallon if further refinery closures occur or if a supply disruption coincides with the current structural deficit.
— Rep. Vince Fong (R-Bakersfield), December 2025
Governor Newsom, confronted with the consequences of the regulatory environment his administration built, described the closures as "market disruption" and promised an "all hands" response — while offering no concessions on the underlying regulatory framework. The California Energy Commission reportedly attempted to broker a sale of the Benicia facility that would keep it operating under new ownership, but those efforts ultimately did not prevent the closure.
IV. The EV Sales Reality — Mandate Meets Market
The ACCII regulation's 2026 target of 35 percent ZEV sales was built on projections of continued rapid EV market growth that did not materialize. After three consecutive years of strong expansion — EV share of new California car sales grew from approximately 8 percent in 2019 to 25 percent in 2023 — growth flatlined. California Energy Commission data shows 25.3 percent of new registrations were zero-emission in 2024, essentially unchanged from 2023, dropping slightly to 24 percent in Q1 2025.
The mandate's first hard test — 35 percent of 2026 model-year sales — would require an 11-percentage-point increase over two years from a base that has shown zero growth for three years. The subsequent requirement of 100 percent by 2035 would require another 65-percentage-point increase over the following nine years. The automaker trade group Alliance for Automotive Innovation told Congress the targets were "never achievable," while dealers in Southern California's Inland Empire and Orange County reported declining rather than growing EV interest.
The anti-Tesla protest dynamic added an unintended dimension: ZEV sales overall declined slightly in Q1 2025 as California liberals boycotted Tesla to protest Elon Musk's involvement in the Trump administration, with Tesla new registrations dropping 21.5 percent year-over-year. Tesla's dominance of the California EV market meant that consumer political protest against one company was simultaneously undermining the environmental mandate that progressive Californians nominally support.
The structural barriers are well-documented and largely independent of political preference. The median unsubsidized battery-electric vehicle carries a significant price premium over comparable internal combustion vehicles. For apartment dwellers — a growing share of the California population as housing costs push renters into multi-family construction — home charging is not an option. Public fast-charging infrastructure remains concentrated in urban cores and along Interstate 5 and Highway 101, with significant gaps in the Inland Empire, Central Valley, and rural communities. For a farmworker in Tulare County or a tradesperson running a service truck in Murrieta, an EV represents an unworkable solution regardless of environmental conviction.
V. The Grid Problem Nobody Solved
The EV mandate was adopted against the backdrop of a California electrical grid that already experiences stress during peak demand periods. The California ISO's reliability assessments have repeatedly identified summer heat events as grid emergency risks requiring rotating outages or emergency power imports from neighboring states. Adding the overnight charging load of 15 million electric vehicles — the state's 2035 fleet target — represents an enormous incremental demand that has not been matched by corresponding generation, transmission, or storage buildout commitments.
State Senator Scott Wilk, Vice Chair of the Senate Transportation Committee, put the issue plainly in a letter urging California's U.S. senators to support the mandate's repeal: "I am concerned that California is not truly prepared to have 15 million electric vehicles on the road by 2035. We face major obstacles. If everyone plugs in and charges their EVs, we will experience rolling blackouts because of inadequate energy capacity. The state is already struggling to maintain a dependable electric grid during heatwaves and peak usage periods."
The grid-EV coupling is not merely a capacity problem. California's aggressive renewable buildout has created a grid with significant mid-day solar surplus and evening demand peaks — the so-called "duck curve" — which creates pressure to charge vehicles mid-day rather than overnight. But the majority of EV owners charge at home, at night, precisely when grid demand is rising from the loss of solar generation and increasing residential load. Effective large-scale EV integration requires smart charging infrastructure, time-of-use rates designed to shift load, and potentially vehicle-to-grid capabilities — none of which were built as preconditions of the mandate.
VI. The Transportation Funding Doom Loop
If the EV mandate's effects on refinery viability and grid reliability represent the first order of unintended consequences, its effects on California's transportation funding represent the second — and in some respects the more structurally significant — crisis.
California's gasoline excise tax, currently 57.9 cents per gallon, generated approximately $7.8 billion in fiscal year 2023-24, funding state and local road maintenance, highway operations, and transit programs. The tax is assessed per gallon consumed. Electric vehicles, which consume no gasoline, contribute nothing to this funding stream. Highly fuel-efficient hybrids contribute proportionally less.
AB 1421, introduced in the 2025-26 legislative session and containing the Legislature's own formal findings, states the problem with stark precision: the Legislative Analyst's Office projects transportation revenues will decline by as much as $2 billion annually by 2030 and up to $4 billion annually by 2035. The California Transportation Commission projects the state will collect $31.3 billion less in fuel excise tax revenue over the next decade due to increased fuel efficiency and EV proliferation. A Mineta Transportation Institute study estimates revenue reduction of between $4.8 billion and $12.1 billion by 2040.
California has been managing this erosion through repeated gas tax increases on the shrinking pool of remaining gasoline car owners — a politically regressive strategy that transfers cost to lower-income drivers who cannot afford EVs while subsidizing the roads used by wealthier EV owners. The state's gas tax has risen from 47.4 cents three years ago to the current 59.6 cents, making it the highest in the nation. Analysts at Vega Economics project that maintaining current road funding purely through gas tax increases would require the rate to reach $1.15 per gallon by 2035 — a level considered politically impossible.
The planned replacement is a vehicle miles traveled (VMT) charge — a per-mile fee assessed on all drivers regardless of fuel type. California has been developing this mechanism since 2014, when Senate Bill 1077 established the Road Usage Charge Technical Advisory Committee. SB 339 (Wiener, 2021) extended the program and directed Caltrans to conduct a real-money collection pilot. That pilot ran from August 2024 through January 2025, charging participants 2.5 cents per mile for light-duty vehicles with credits for gas taxes paid during the period. The final report to the Legislature is due by December 31, 2026. AB 1421, introduced in 2025, would extend the advisory apparatus until 2035 — institutionalizing the program through the decade when gas tax revenues collapse.
- 2023-24 gasoline excise tax revenue: $7.8 billion
- Projected annual revenue loss by 2030: $2 billion
- Projected annual revenue loss by 2035: $4–$5 billion
- Projected 10-year cumulative shortfall: $31.3 billion
- Mineta Transportation Institute projection to 2040: $4.8B–$12.1B annually
- Gas tax rate needed to maintain revenue by 2035 (current mandate trajectory): $1.15/gallon
- SB 339 pilot VMT rate tested: $0.025/mile
- ASCE-estimated California 10-year infrastructure funding shortfall: $70 billion
The equity implications of the VMT tax are pointed. The policy is framed by its supporters as a fairness correction — making wealthy EV owners pay for roads they currently use for free. But the largest VMT charges will fall on workers who commute long distances because housing costs have pushed them to the exurban periphery. A construction worker driving from Perris to Los Angeles, a nurse commuting from Hesperia to a hospital in Ontario, or a farmworker in the Central Valley faces both the highest mileage bills and the least ability to absorb them or restructure their lives around them.
VII. The Wider Fiscal System — Pensions, Prop 98, and the Revenue Trap
The EV-transportation funding crisis does not exist in isolation. It is one subsystem in a larger California fiscal architecture that has accumulated structural commitments faster than its revenue base can support them.
The California Public Employees' Retirement System (CalPERS) reported an unfunded actuarial liability of $168 billion as of June 30, 2024, with a funded ratio of approximately 71 percent. The California State Teachers' Retirement System (CalSTRS) carries an additional $39 billion in unfunded liabilities. California's total state and local pension debt, at over $265 billion, is the largest of any state in the nation — more than $6,000 in pension debt for every state resident. Over the past 20 years, CalPERS achieved an average return of 6.8 percent and CalSTRS 7.6 percent, both significantly below the S&P 500 average of 10.4 percent for the same period. The pension obligations are constitutionally protected — they cannot be reduced for existing employees or retirees.
Proposition 98, the 1988 constitutional amendment, locks approximately 40 percent of the state General Fund into K-12 and community college funding before discretionary appropriations begin. The formula uses three alternative "tests" comparing state General Fund revenues, per-capita personal income growth, and K-12 average daily attendance. In most years since 2018-19, Test 1 has been operative — meaning the education funding floor is pegged to state revenues rather than enrollment. This creates a counterintuitive result: as enrollment declines from a peak of approximately 6.3 million students in the early 2000s to a current 5.8 million (with projections to 5.2 million by 2034-35), the aggregate Prop 98 guarantee can still grow if General Fund revenues grow — raising per-pupil spending even as the system educates fewer students and districts face enrollment-driven fixed-cost crises.
California's revenue structure amplifies these pressures. Income taxes account for approximately three-quarters of General Fund revenues, and the top 1 percent of taxpayers — roughly 150,000 people in a state of 40 million — generate nearly half of all income tax collections. Capital gains realizations, which fluctuate dramatically with stock market performance, are a dominant driver of year-to-year revenue volatility. The 2022-23 budget crisis, in which income tax revenue declined 27 percent, was driven not by outmigration but by the stock market's response to Federal Reserve rate increases suppressing capital gains events. The 2026-27 budget's projected $22 billion windfall for schools and community colleges reflects AI-sector equity wealth being realized — a single-variable windfall that could reverse as quickly as it arrived.
The combined effect is a state with extraordinary wealth generation capacity that has simultaneously locked itself into constitutional, contractual, and political spending commitments that leave very little flexibility to invest in the physical infrastructure — roads, water systems, housing — that would improve quality of life for the median Californian who does not work in tech and does not own stock options.
VIII. The Legal Battle — State of California v. United States
Congress moved against the ACCII mandate in May 2025, deploying the Congressional Review Act (CRA) to revoke the Biden EPA's waiver authorizations. The House passed three joint resolutions: H.J. Res. 88, revoking the ACCII passenger vehicle waiver; H.J. Res. 87, revoking the Advanced Clean Trucks waiver; and H.J. Res. 89, revoking California's nitrogen oxide engine emission standards. The Senate, in a late-night session on May 22, 2025, voted to approve the resolutions. President Trump signed all three on June 12, 2025.
The procedural path was unprecedented and legally contested. Both the Government Accountability Office and the Senate Parliamentarian advised that the California EPA waivers are not "rules" within the meaning of the CRA and therefore cannot be repealed by that mechanism — the CRA was designed to reverse recently finalized federal agency regulations, not revoke permissions granted to states. Senate Republicans voted to override the Parliamentarian's ruling, a move Democrats characterized as establishing a dangerous precedent that future majorities could exploit. Senator Elissa Slotkin (D-Michigan), representing a state heavily dependent on auto manufacturing, was the sole Democratic senator to vote for the passenger car waiver repeal, citing her state's automotive workforce.
On June 12, 2025 — the same day Trump signed the CRA resolutions — California and ten co-plaintiff states (Colorado, Delaware, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington) filed suit seeking declaratory and injunctive relief. The complaint alleges that use of the CRA to revoke state-level EPA waiver authorizations is legally unprecedented, contrary to 50 years of Clean Air Act precedent, and beyond Congress's authority. California and the states filed an amended complaint in October 2025. The case is pending before Judge Haywood S. Gilliam, Jr. The legal stakes extend well beyond California: a government victory would bar the EPA from issuing "substantially similar" waivers absent new congressional authorization; a California victory would reaffirm state authority to set stricter vehicle standards under the Clean Air Act. The case is widely expected to reach the Supreme Court.
The litigation has introduced profound regulatory uncertainty for automakers, who must make multi-year manufacturing commitments without knowing which emissions regime will govern their California sales. Some major automakers — particularly those that have invested heavily in EV platforms — have paradoxically supported California's position, arguing that regulatory whiplash makes long-term planning impossible and that they prefer consistent rules even if demanding ones. Others, particularly representing the truck manufacturing sector, supported the federal challenge.
IX. The 2026 Governor's Race — A Referendum on the System
California's June 2, 2026 primary election, held the day before this analysis was compiled, produced results that would have been unthinkable in the state five years ago: a Trump-endorsed Republican led a crowded primary field in the most Democratic large state in the nation, on a platform centered on reversing the energy and regulatory policies that have produced the crisis described above.
Steve Hilton, a British-born former adviser to UK Prime Minister David Cameron and subsequent Fox News host, led with approximately 28 percent of the primary vote. Democrat Xavier Becerra, the former California Attorney General and Biden administration Health and Human Services Secretary, held second place at approximately 25 percent. Billionaire environmental advocate Tom Steyer trailed at 20 percent. Becerra was projected to advance to the November general election; the contest for the second spot between Hilton and Steyer remained too close to call as of early June 7.
Hilton's platform on energy and transportation is the most direct policy response to the systems failures described in this analysis to emerge from any major California political figure. At a debate earlier this spring, he stated: "My plan is to repeal the low-carbon fuel standard, to change the way cap-and-trade taxes are levied, to change the refinery regulations, to open up oil and gas production in California. All of that together, instead of what we've got now, which is $5 gas heading to $6 or even higher, my plan is for $3 gas in California, and I can do that through changes to the regulatory environment without legislation."
His campaign website goes further, explicitly naming the refinery closure cascade: "California Democrats have prioritized 'climate' ideology over affordability, driving out oil refineries, shutting down cleaner in-state oil production, and piling on extreme, unnecessary regulations. Phillips 66 in Los Angeles is shutting down, as is Valero's Benicia refinery... Over 25% of California's refining capacity could be lost within the next two years, a collapse that would require a massive and sudden increase in finished gasoline imports and send prices soaring."
His April 2026 letter to California's oil and gas executives — sent to Chevron, Marathon Petroleum, Valero, and the California Independent Petroleum Association — urged them to "not give up on California," promising a comprehensive policy overhaul including suspension of the Low Carbon Fuel Standard, cap-and-trade reform, and relaxed refinery regulations.
Becerra, running as the establishment Democratic candidate, has acknowledged affordability concerns while refusing to abandon the mandate's direction. At a January 2026 environmental forum, he said California "needs to have enough charging stations so drivers don't have to worry can they get to their destination" and that the transition needs to be "affordable for families" — language that reveals the political pressure without committing to structural change. He has framed his governorship as a continuation of Newsom's climate legacy with improved execution.
The political math for November is challenging for Hilton. Democrats hold approximately a 20-point voter registration advantage statewide. But the affordability crisis has demonstrably cracked the Democratic coalition's working-class base — exactly the suburban and exurban voters in the Inland Empire, Central Valley, and North County San Diego whose vehicle dependency makes the mandate an economic threat rather than an environmental aspiration. Whether that crack is wide enough to elect a Republican governor in California for the first time since Arnold Schwarzenegger's departure in 2011 will be determined in November.
X. The Systems Failure — What Was Known and When
Perhaps the most damning aspect of the California energy and fiscal crisis is not that it was unpredicted — it is that the predictions were made, documented, and systematically set aside in favor of political convenience.
The SB 339 legislative findings of 2021 — authored by the same Sacramento policy apparatus that drove the ACCII mandate — explicitly stated that the Mineta Transportation Institute projected transportation revenue reductions of "as much as $1 billion annually as early as 2025, and by as much as $2 billion annually as early as 2030." The fuel tax erosion was quantified before ACCII was finalized. AB 1421's 2025 findings enumerate the same data with updated precision. The California Transportation Commission had projected the $31.3 billion decade-long shortfall. These numbers lived in official state documents while the mandate was designed without binding preconditions to address them.
The grid readiness gap was similarly documented. The California Energy Commission's own load forecasts showed the demand implications of mass EV adoption. The duck curve problem was well understood by CAISO. The refinery closure risk was visible to anyone reading the industry's cost analyses and the regulatory trajectory.
The pattern reflects what systems theorists identify as a failure of institutional boundary conditions. CARB modeled the subsystem it owned — vehicle tailpipe emissions — with rigor and care. It treated the coupled systems it did not own — the grid, the fuel supply chain, the transportation funding mechanism, the household budget of a Central Valley farmworker — as externalities. In a complex tightly coupled system, that is precisely where the failures accumulate. The subsystem optimized in isolation generates second and third-order effects that overwhelm the optimization.
Al Gore coined "inconvenient truth" to describe the political and economic discomfort of accepting climate science. The phrase has acquired recursive irony in Sacramento: the inconvenient truths about the EV mandate's fiscal and supply-chain consequences were documented in state analyses, raised by engineers and transportation planners in regulatory proceedings, and set aside because acknowledging them would have required either conditioning the mandate — weakening the political coalition behind it — or honestly confronting the costs that working-class Californians who could not afford to participate in the green transition would bear.
Those costs are now being borne. The invoice is written in $4.58 gasoline, $265 billion in pension liabilities, a $31 billion transportation funding hole, and a gubernatorial race in which the dominant issue is whether Sacramento's regulatory class has made California unaffordable for the people it governs.
XI. Conclusion — What Sound Policy Would Have Looked Like
The California EV mandate was not necessarily a wrong goal. Decarbonizing transportation is a legitimate and urgent policy objective, and California's unique Clean Air Act authority gives it a tool that no other state possesses. The question was never whether to pursue that objective — it was whether to pursue it in a way that accounted for the full coupled system rather than one optimized variable.
A conditionally structured mandate — one whose escalation steps were explicitly linked to grid capacity thresholds, public charging infrastructure density benchmarks, median ZEV price benchmarks relative to comparable ICE vehicles, and enacted replacement transportation funding mechanisms — would have accomplished several things simultaneously. It would have preserved the environmental objective while creating binding investment incentives for utilities, charging network operators, and automakers. It would have prevented the transportation funding hole from growing silently while legislators looked the other way. It would have protected working-class Californians from a mandate that outpaced the market's ability to serve them. And it would have preempted the legal and political crisis that has now destabilized the entire regulatory framework.
That framework was available. It was articulated, submitted into regulatory proceedings, and rejected — not because it was technically flawed, but because it was politically inconvenient. The hard mandate generated better press releases and stronger coalition support than the conditional one. The consequences of that choice are now California's to live with.
Whether the November election produces a governor willing to restructure the system from within — or whether Sacramento continues to defend the mandate while the infrastructure it was meant to serve continues to erode — is the central question of California governance for the next decade. The systems will not wait for the politics to catch up. They never do.
Key Timeline
| Date | Event |
|---|---|
| Aug. 2022 | CARB adopts Advanced Clean Cars II (ACCII) regulation, mandating 100% ZEV new-car sales by 2035 |
| Sept. 2021 | SB 339 (Wiener) signed, directing Caltrans to implement Road Usage Charge collection pilot |
| Late 2023 | Biden EPA grants ACCII waiver to California under Clean Air Act Section 209(b) |
| Aug. 2024 | SB 339 Road Charge Collection Pilot begins; participants pay real money at 2.5¢/mile |
| Sept. 2024 | Phillips 66 announces closure of 147,000-bpd Los Angeles refinery |
| Apr. 2025 | Valero announces closure of 145,000-bpd Benicia refinery; $1.1B write-down |
| May 1, 2025 | U.S. House passes H.J. Res. 87, 88, 89 revoking California's EPA vehicle waivers |
| May 22, 2025 | U.S. Senate votes to approve waiver revocation resolutions, overriding Parliamentarian |
| June 12, 2025 | President Trump signs three CRA resolutions revoking California EV mandate waivers |
| June 12, 2025 | California and 10 states file State of California v. United States, No. 4:25-cv-04966-HSG (N.D. Cal.) |
| Oct. 2025 | Phillips 66 Los Angeles refinery produces final barrel of conventional fuel |
| Jan. 31, 2026 | Valero Benicia refinery ceases operations; California has lost ~20% of refining capacity |
| Feb. 2026 | Hilton 2026-27 budget projects $22B additional Prop 98 funding; per-pupil spending to reach record $20,427 |
| Feb. 2026 | AB 1421 introduced, extending Road Usage Charge Advisory Committee to 2035 |
| Apr. 2026 | California loses 74,961 K-12 students in single year — 8th consecutive enrollment decline |
| June 2, 2026 | California governor primary: Hilton (R) leads with ~28%; Becerra (D) second ~25%; Steyer (D) third ~20% |
| Dec. 31, 2026 | SB 339 Road Charge Collection Pilot final report due to Legislature |
| Nov. 3, 2026 | California general election: Hilton vs. Becerra for governor |
Sources and Citations
- California Air Resources Board. Advanced Clean Cars II Regulation. Adopted August 2022. https://ww2.arb.ca.gov/our-work/programs/advanced-clean-cars-program/advanced-clean-cars-ii
- California Air Resources Board. Current Litigation — Challenge of Federal Administration Actions to Defend U.S. EPA Waivers for the Advanced Clean Cars II Regulation. https://ww2.arb.ca.gov/current-litigation
- State of California, et al. v. United States, et al. United States District Court, Northern District of California, Case No. 4:25-cv-04966-HSG. Filed June 12, 2025.
- Nelson Mullins. "Proceed With Caution: California Emissions Case Slowly Moving Forward." November 11, 2025. https://www.nelsonmullins.com/insights/blogs/driving-forward-developments-in-transportation-law-and-innovation/all/proceed-with-caution-california-emissions-case-slowly-moving-forward
- Spencer Fane. "Battle Over California's Vehicle Air Emission Waivers Now in U.S. District Court." September 23, 2025. https://www.spencerfane.com/insight/battle-over-californias-vehicle-air-emission-waivers-now-in-u-s-district-court/
- Jones Day. "Active Battle Over the California Clean Air Act Waiver Continues." August 2025. https://www.jonesday.com/en/insights/2025/08/active-battle-over-the-california-clean-air-act-waiver-continues
- NPR. "Upending Norms, the Senate Votes to Undo California's EV Rules." May 22, 2025. https://www.npr.org/2025/05/22/nx-s1-5387729/senate-california-ev-air-pollution-waiver-revoked
- CalMatters. "US Senate Blocks California's Electric Car Mandate in Historic Vote." May 22, 2025. https://calmatters.org/environment/2025/05/california-electric-car-mandate-senate-revoke-waiver/
- AB 1421, California Legislature 2025-26 Regular Session. Vehicles: Road Usage Charge Technical Advisory Committee. https://legiscan.com/CA/text/AB1421/id/3137105/California-2025-AB1421-Introduced.html
- SB 339 (Wiener), Chapter 308, Statutes of 2021. Vehicles: Road Usage Charge Pilot Program. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB339
- Caltrans / California Road Charge Program. Road Charge Collection Pilot — SB 339. Pilot period August 2024 – January 2025. https://caroadcharge.com/projects/road-charge-collection-pilot/
- California State Transportation Agency. SB 339 Road Charge Collection Pilot Interim Report. July 1, 2024. https://catc.ca.gov/-/media/ctc-media/documents/ctc-committees/road-charge/2024-05/tab-08-attachment-a-sb-339-interim-report-update.pdf
- OPIS Insight. "California Refinery Transitions." September 10, 2025. https://www.opis.com/blog/california-refinery-transitions/
- Breakthrough Fuel Intelligence. "How Closing Oil Refineries in California Will Impact Prices." October 28, 2025. https://www.breakthroughfuel.com/blog/how-to-navigate-the-impact-of-closing-oil-refineries-in-california/
- Grist. "California Is Sunsetting Oil Refineries Without a Plan for What's Next." August 15, 2025. https://grist.org/energy/california-is-sunsetting-oil-refineries-without-a-plan-for-whats-next/
- Yahoo Finance / Energy News Today. "California Refinery Closures Seen as US Security Risk as Valero Exits in 2026 and Gas Prices Reach $12/Gallon." December 17, 2025. https://finance.yahoo.com/news/california-refinery-closures-seen-us-234500380.html
- Compton Chamber of Commerce / Industry Analysis. "California's Shrinking Refinery Base and the Coming Summer $8.45 Price Shock." February 10, 2026. https://www.comptonchamberofcommerce.org/post/californias-coming-summer-price-shock
- Vega Economics. "The Billion-Dollar Fiscal Cliff Behind California's 2035 EV Mandate." August 23, 2024. https://vegaeconomics.com/the-billion-dollar-fiscal-cliff-behind-californias-2035-ev-mandate
- Pew Charitable Trusts. "More EVs, Less Gas Tax Revenue Create State Transportation Budget Issues." December 5, 2025. https://www.pew.org/en/research-and-analysis/articles/2025/01/14/more-evs-less-gas-tax-revenue-create-state-transportation-budget-issues
- California Department of Finance. Public K-12 Graded Enrollment Projections, 2025 Series. October 2025. https://dof.ca.gov/forecasting/demographics/public-k-12-graded-enrollment/
- Legislative Analyst's Office. The 2026-27 Budget: Proposition 98 Guarantee and K-12 Spending Plan. February 4, 2026. https://lao.ca.gov/Publications/Report/5110
- Legislative Analyst's Office. The 2025-26 California Spending Plan: Proposition 98 and K-12 Education. November 10, 2025. https://lao.ca.gov/Publications/Report/5087
- EdSource. "Newsom's Last Budget as Governor Would Give Schools and Community Colleges an Unexpected $22 Billion." January 9, 2026. https://edsource.org/2026/newsoms-last-budget-as-governor-would-give-schools-and-community-colleges-an-unexpected-22-billion/748676
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- LegalClarity. "CalPERS Alone Had an Estimated Unfunded Actuarial Liability of $168 Billion as of June 30, 2024." December 14, 2025. https://legalclarity.org/what-are-californias-unfunded-liabilities/
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- California Budget & Policy Center. "What Is Proposition 98 and How Does the State Budget Shortfall Affect It?" April 19, 2024. https://calbudgetcenter.org/resources/what-is-proposition-98-and-how-does-the-state-budget-shortfall-affect-it/
- Center for Jobs. "High Earner Migration and Its Impact on State Revenue." June 28, 2024. https://centerforjobs.org/ca/special-reports/high-earner-taxodus-continued-in-2022
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