Residents and city officials in Benicia are asking questions and voicing serious concern about the upcoming Benicia Refinery closure and disbursement of fine funds.  Valero Benicia is slated for closure in April of 2026. City officials are getting little information about the future of the site except that, for the present, refined gasoline will be imported to and distributed from some of the refinery tanks.

However, Benicia officials are optimistic after the Bay Area Air District (BAAD) voted January 28 to make it easier for the city to access its share of the $82 million in fines recently assessed to the refinery. Under new revised BAAD guidelines, Benicia can by itself apply for $40 million without involving non-profit organizations, as the original guidelines had proposed. City officials say they need tine money to help stem the approximately $10 million annual operating budget shortfall that will come with the steep drop in tax revenues from Valero’s closing.

Details of Valero Refinery Fine Distribution

The Air District assessed Valero $82 million for continued air pollution over a recent 15-year period, and BAAD is disbursing about $60 million to affected communities. Benicia city officials said the application guidelines as originally proposed—including non-profit collaboration required to access the $40 million portion earmarked for Benica—would have hampered and delayed the application process. According to the new guidelines, Benicia and some nearby communities still will need to partner with non-profit organizations to access the remaining $20 million, and some of that $20 million will go solely to non-profits.

All applications still have to meet BAAD guidelines requiring that the money be spent generally for health and environmental uses and will have to be approved by the Air District. It remains unclear whether uses such as parks would qualify. Speaking at a recent Progressive Democrats of Benicia meeting, Mayor Steve Young said health and environmental improvements could take many forms, including:

• Electric police vehicles
• More charging stations
• Incentives for residents to swap gas furnaces and water heaters for healthier electric appliances  

He also mentioned the possibility of a city electric utility as the nearby city of Pittsburg has, but noted that all of this is very preliminary.

BAAD officials have stated that if the following cities and areas partner with non-profits, they may be eligible for a portion of the remaining $20 million. These cities include Martinez, Vallejo, Benicia, Pittsburg, Concord, and Crockett, as well as unincorporated areas such as Vine Hill, Mountain View, Pacheco, and Clyde. Non-profits located in these regions can apply as well.

Benicia Displeased with ‘Tank Farm’ Status

The mayor also confirmed that Benicia will likely become a “tank farm” with Valero continuing to import, store and distribute already-refined gasoline at the facility. State and Valero officials reached agreement to do this amid concern by Governor Gavin Newsom and others that gasoline prices could rise steeply when Valero closes.

The refinery currently supplies about 10 percent of the gasoline California uses, according to Valero figures. Young said it does not appear that the city has much if any choice about the tank farm, which would produce a small fraction of the current refinery’s tax revenues for the city.

Safety,  Economic Questions Unanswered

Mayor Young noted that serious unanswered questions include:

• The duration of the gasoline imports
• The fact that refined gasoline is more flammable and dangerous to store in tanks than the crude oil they are currently used for
• How and when parts of the refinery apparatus will be dismantled
• The financial and environmental issues resulting from possible inability to use the site for other purposes if the import depot remains long-term

The Good News: There’s Time to Get Involved!

We urge Benicia residents to get involved and make their voices heard when Benicia officials seek community input about how the Air District fines could be spent. Start talking now to local officials about your environmental wish lists. And watch for updates in the 350 Contra Costa newsletter and blog.