California Air Resource Board

This Wednesday (September 30, 2015) PBF Energy announced their acquisition of the 155 Mb/d ExxonMobil Torrance, CA refinery that has been out of commission since February 2015 and will not likely return to service until February 2016. This PBF purchase is their second refinery buy this year and their fifth since 2010. The sophisticated Torrance refinery has a lot of upside potential for PBF but may be constrained by California transport fuel regulations. Today we take a closer look at the deal.

Arnold Schwarzenegger said “Hasta la vista, baby” to the governor’s office in Sacramento four years ago, but his 2007 executive order establishing a low-carbon standard for transportation fuels is only now starting to have a real effect on California refineries. Some refiners say the rule aimed at reducing “life-cycle” greenhouse gas emissions from the transportation fuel sector 10% by 2020 is unrealistic and could result in refinery closings and gasoline and diesel shortages. Others say California’s goal is achievable. Today, we consider the Golden State’s low-carbon fuel standard (LCFS) and what it may mean for refiners.