It’s hard to imagine Richmond without an oil refinery because it has always had one. By the time the city was incorporated in 1905, Standard Oil had already been processing crude for several years, setting off the city’s long connection with heavy industry, from the Ford Assembly Plant to the ship-building yards of World War II.
But today, a growing number of people — from academics to activists to government officials — are saying that a future without a fossil-fuel industry in Richmond and areas beyond is no longer so far-fetched. Some even say it’s already well within view, a matter of when and not if.
Multiple factors support this theory: Climate change is an ever-more urgent global concern; advancements in clean technologies and a growing demand for electric vehicles are changing how energy is produced and consumed on a mass scale; demand for oil is decreasing, in turn; and the number of active refineries in California continues to trend down.
In Richmond, these signals beg important questions: How long will the refinery remain? What is Chevron’s role in a clean energy transition? If a transition away from the fossil fuel industry is imminent, then what should the city and local stakeholders be doing right now to prepare?
‘It would be irresponsible’ for Richmond to not explore economic alternatives
B.K. White worked at the Chevron Richmond refinery for nearly three decades, up until 2023 when he and other employees were fired less than a year after a prolonged labor strike. Now, the former union negotiator and vice president of United Steel Workers Local 5 works at City Hall, as a policy director reporting to Mayor Eduardo Martinez. His main charge is helping the city take steps toward a “just transition” away from a fossil-fuel-dependent local economy.
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“We’re looking at policy coming from Sacramento and we’re looking at the changing world. Municipalities have to look at how to transition from the monies that we get from these dirty industries into something else that fills that void,” White said in a recent interview with Richmondside.
“We saw what happened to places like Detroit when the automotive industry contracted. We’ve seen West Virginia and Kentucky, what happened when the coal industry contracted,” he said. “So it would be irresponsible governance to not explore.”
There’s a lot for White and others at City Hall to consider in getting to a post-Chevron Richmond, not least of which is the refinery’s considerable financial impact on the city. Chevron may be Richmond’s largest single polluter and the largest greenhouse gas emitter of all Bay Area refineries, but it’s also the city’s largest employer — about 3,000 people work at the refinery, including contractors, according to the company — and it’s the largest single taxpayer. In addition, the city has and will continue to receive millions from Chevron from settlements and an array of community benefits projects, on top of property taxes paid to the county.
One such payout came in February of last year, when the Bay Area Air Quality Management District announced a record-setting $20 million settlement with Chevron, money that will be used to pay for projects improving local air quality. Then last August, the city and Chevron reached a historic agreement that will pay Richmond $550 million over the next 10 years in exchange for scrapping a ballot measure that, if approved by voters, would have placed a local tax on oil refining.
Chevron also paid the city $80 million between 2014 and 2024 as a condition for modernizing the refinery. Those monies were used for an array of local greenhouse gas emissions-reduction projects such as urban forestry and rooftop solar panels and community benefits such as student scholarships, job training, and free wi-fi access for residents.
Given the city’s deeply intertwined economic relationship with Chevron, it stands to figure that any future scenario without the refinery would require other industries to take its place.
With this in mind, the Richmond City Council passed a resolution in 2021 to develop a Richmond Green-Blue New Deal and Just Transition, a blueprint for creating “a just, equitable, and sustainable future” that’s non-reliant on fossil-fuels. The plan calls for the creation of 1,000 new green jobs in the city and full decarbonization of the local economy by 2040.
While the plan is ambitious, it remains just that — a plan. But White says it’s a critical first step to ensuring the city has an economic future.
“This is the time for strong leadership and innovative ideas,” White said. “We’ve seen the devastation of cities who have been flat-footed, thinking that industry will be there forever.”
Chevron says it is committed to Richmond long-term, but recent reports raise questions
For its part, despite announcing a move of its corporate headquarters from San Ramon to Texas last August, Chevron has not indicated that it plans on leaving Richmond anytime soon. In October, it mailed a newsletter to Richmond residents outlining its “commitment to the environment and our community,” including its multi-million dollar investments in Richmond as part of the 2014 agreement to modernize its refinery.
“We’ve called Richmond home for 122 years, and we’re looking forward to the 122 years yet to come,” the newsletter said.
The Wall Street Journal painted a different picture in a report last February, however, saying the company has “considered the possibility of ceasing production” in California entirely. According to the Journal, Chevron executive Andy Walz said the future of the company’s California refineries could depend on whether the state increases its regulations of the oil industry.
Gov. Gavin Newsom has pledged that California will achieve carbon neutrality by 2045, which would mean that the state’s total carbon emissions are being offset by its emissions reductions. The state’s ambitious plan calls for a 94% drop in gas consumption and 85% reduction in greenhouse gas emissions over the next 20 years.
Brian Hubinger, corporate affairs manager for Chevron, said he’s unaware of any plans for Chevron to shut down its Richmond refinery, and pointed to the company’s recent billion-dollar investment in the facility to replace equipment from the 1960s.
“We are committed to Richmond. We’re looking to grow on the century-plus that we’ve been here, [that] we’ve been in the fabric of this community,” he said in an interview with Richmondside.
Hubinger said Chevron remains “a significant component of the energy market in Northern California.” But state, regional and local policies will ultimately determine whether companies find investing in energy infrastructure worthwhile, he added.
“We are a business, and we have to continually look at the viability of all of our businesses, whether they’re in California or not,” Hubinger said. “We look as a corporation to invest in the places where we see the best opportunities.”
California’s dwindling oil market
In its early days in Richmond, Standard Oil operated the largest refinery in California. The company built a second West Coast refinery in Los Angeles county in 1911, earning the city where it was built the name “El Segundo,” meaning the second.
In 1984, the Standard Oil Company of California changed its name to Chevron.
Around that time, there were 43 fuel refineries in California. President Ronald Reagan had signed an executive order to increase oil production in 1981 after a period of gasoline shortages in the 1970s. The order ushered in an era of surplus crude in the U.S. that’s now referred to as the “oil glut.” By 1985, California’s oil production peaked at 394 million barrels per month.
Since then, it’s been 40 years of steady decline. The state now produces about 104 million barrels per month — just over a quarter of what it once did — and the number of operating oil refineries in California has dropped to 14, according to June 2024 numbers from the U.S. Energy Information Administration.
Phillips 66, which owns the Rodeo refinery — a site that recently switched to producing plant-based diesel fuels — announced that it will stop operations at its Los Angeles refinery by the end of this year, lowering the number of California refineries to 13. Only eight of those remaining refineries will be manufacturing gasoline by the end of the year, with the others continuing to produce diesel, jet fuel or bio-fuels.
Three of those gasoline producing refineries are in the Bay Area: Chevron Richmond, PBF Martinez and Valero Benicia. Together, they account for a third of California’s refined oil, according to the California Energy Commission. Chevron Richmond is the largest fuel refinery in Northern California, producing just over 15% of the oil in the state.
The downward trend in oil refining and demand prompted Chevron CEO Mike Wirth to tell Bloomberg in 2022 that “there will never be another new refinery built in the United States.”
The same signs led researchers at the UC Berkeley Labor Center to recently conclude that “Contra Costa County and California as a whole must begin to prepare for widespread refinery transition.”
Their January 2025 study, which provides an economic framework for the county’s transition away from fossil fuels, was published in collaboration with a broad coalition of labor and environmental justice organizations called the California Contra Costa Refinery Transition Partnership. A major impetus for the group’s research was the closure of the Marathon Martinez refinery in 2020, which resulted in the layoff of roughly 750 workers.
The report concludes that more refinery closures are likely to occur in the coming decades and identifies three urgent challenges facing Contra Costa County, where oil refining remains the largest industrial sector: a loss of tax revenue for essential services, the disappearance of blue-collar jobs without comparable replacements, and continued public health hazards in the absence of adequate environmental cleanup plans.
Clean energy advocates in the scientific community, such as the Union of Concerned Scientists, have also sounded the alarm about what could happen if oil companies picked up and left the state before communities have had a chance to prepare. A 2024 report by the organization argues that California’s petroleum infrastructure is not set up to operate at reduced and steadily declining scales and that oil companies should not be trusted to protect communities, workers, or consumers.
Meanwhile, a state takeover of refineries is one option being explored to ensure California has the fuel it needs as refineries continue to close, according to the L.A. Times.
Polls conducted by Gallup and others have shown the public increasingly supports reducing reliance on fossil fuels in order to lower greenhouse gas emissions.
Refineries are closing across the United States
The Chevron refinery makes two main products: fuels like gasoline, jet fuel and diesel; and lubricating base oils, like those used in car engines. Hubinger at Chevron Richmond said about 20% of all the gasoline in Northern California comes from the local refinery. Chevron Richmond also supplies about 60% of the jet fuel used in Bay Area airports, including jet fuel that is piped directly from Richmond to SFO.
Hubinger said refineries operate at an all-or-nothing pace, so “rationalizing” — or reorganizing or refinery operations to produce less — isn’t something Chevron is currently considering in Richmond.
“You don’t just turn refineries down. You don’t just turn certain units or products off. You have to make them all, so the lowest performers will typically be the ones that would rationalize or close but we’re not looking to do that,” he said. “We’re looking to invest in our facility. We’re looking to be a part of California and in this community for a long time. The world’s going to need all forms of energy, including the ones we currently make today.”
Should Chevron one day reverse course and shutter its Richmond refinery, other cities offer examples of what could go wrong. Closures elsewhere have typically been abrupt and happened without community input, according to environmental activists who’ve studied refinery closures.
“When you have an industry-driven closure, what we are left with is they basically utilize their assets as long as they possibly can to maximize profits. They shuffle their finances around, declare bankruptcy and then leave the city holding the bag,” said Christine Cordero, co-director of the Asian Pacific Environmental Network, a statewide organization that’s active in Richmond. “We’ve seen what that closure looks like, and that is what we are trying to avoid.”
From 2019 through 2022, seven oil refineries closed in the United States, including the Philadelphia Energy Solutions refinery. Like in Richmond, that refinery was the city’s biggest polluter and people who lived closest to it had the highest rates of asthma.
An explosion and resulting fire in 2019 led to the closing of the refinery, which was the largest on the East Coast at the time. The company said repairs would be too expensive and laid off 1,000 workers. The U.S. Environmental Protection Agency reached a $4.2 million settlement with the company last year, the largest to date under the Clean Air Act.
“My personal view is there will never be another new refinery built in the United States.”
Chevron CEO Mike Wirth, 2022, Source: Bloomberg
The land where the refinery once stood is now being redeveloped into the Bellwether District, an area of mixed industrial and life sciences labs. But those who had to bear the brunt of the refinery’s pollution are still fighting to ensure the project comes with a community benefits agreement.
Another closure occurred in Baltimore, which in 1865 became home to one of the first oil refineries in the nation. A series of oil spills and leaks over the following century proved how dangerous oil refining can be. By the mid-1980s, Exxon began dismantling the facility. The state-led cleanup involved removing more than 3 million gallons of fuel that had seeped into the ground. Now, there are no oil refineries in Maryland.
On St. Croix, the largest of the U.S. Virgin Islands, oil from the nearby Limetree Bay refinery rained down on residents during two separate events in 2021, poisoning water and soil. After the second event, the EPA used its powers under the Clean Air Act to shut the facility down for 60 days, citing dangers to the community. Limetree subsequently lost the refinery in bankruptcy proceedings, and the EPA has required its new owners to obtain the best available pollution control technology and conduct detailed air quality analyses before it can start refining oil again.
As of mid-March, the refinery in St. Croix was still non-operational, according to EPA spokesperson Stephen McBay. “EPA continues to oversee activities at the site to ensure the protection of human health and the environment,” McBay wrote in an email to Richmondside.
Other refinery closures since 2019 include two in Louisiana, one in Wyoming and one in North Dakota. Another is slated to close this year in Houston.
A 2022 report from the Sightline Institute, a nonpartisan, nonprofit research and policy think tank, studied seven recent refinery closures and found that almost all of them happened abruptly, and resulted in losses of more than 3,400 well-paying jobs and $21 million in local tax revenue. Discussions about what would happen with the refineries took place “behind closed doors,” according to the report, resulting in decisions to let the refineries either “idle indefinitely” or convert to processing biofuels. Leaving refineries to idle indefinitely, as opposed to closing them, allows companies to forgo costly environmental cleanups of their sites.
Something similar occurred in Contra Costa County in August 2020, when Marathon Petroleum announced it would indefinitely idle its Martinez refinery and one in Gallup, New Mexico, during COVID lockdowns when gas was in drastically lower demand.
The hundreds of workers who lost their jobs at the Martinez refinery were given 60-day notices and prohibited from transferring to a different Marathon location. The facility has since transitioned to processing biofuels and rehired a small number of the workers it laid off.
The Contra Costa Refinery Transition Partnership described the abrupt closure of the Martinez refinery as a “wake-up call” for the county. In their January report with the UC Berkeley Labor Center, the group predicted fuel production capacity in the Bay Area “is likely” to drop by up to 92% by 2045 and leave the region with one or even no refineries. The year 2045 is when California hopes to achieve carbon neutrality.
In the meantime, county and city leaders are left to look for new sources of revenue that might help fill the void left in the event of future refinery closures. In Richmond, White said the city is committed to making sure any plans are considerate of community members who stand to be the most impacted by an abrupt refinery shutdown — workers, smaller local businesses and people living in areas disproportionately impacted by refinery pollution.
“You make sure that the businesses that come into Richmond are the businesses that you want, the businesses that will provide a livable wage and will respect workers and will increase their standard of living,” White said. “We don’t want exploitative businesses to come in and use our residents for cheap labor.”
