What happens when a governor ignores a bipartisan warning and an entire region pays the price? I’m Elizabeth Davis and welcome to the Elizabeth Davis channel.

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This story matters and it affects millions of people across three states.

On September 10th, 2024, something unusual happened.

Two governors from opposite sides of the political aisle came together with a single urgent message for California.

Arizona’s Democratic Governor Katie Hobbes and Nevada’s Republican Governor Joe Lombardo co-signed an emergency letter to Sacramento.

Their message was direct and their concern was real.

California’s new refinery regulations were about to trigger fuel shortages and massive price increases across the entire Southwest.

This wasn’t political posturing.

This was two states sounding an alarm about their own survival.

Arizona and Nevada aren’t just neighbors to California.

They’re dependent on California’s fuel infrastructure.

Arizona gets 60% of its gasoline from California refineries.

Nevada relies on California for 70% of its supply.

The pipelines run from California eastward, and there simply aren’t alternative supply routes.

When California’s refinery system breaks down, Arizona and Nevada don’t have options.

They just pay more.

The governors understood this reality, and they understood what California’s new regulations would mean.

But Gavin Newsome didn’t see it that way.

He responded the very same day on Twitter, pushing back hard against the concerns.

Nuome argued that California’s refineries were the real problem.

According to him, these companies deliberately chose not to replace supply while their facilities went offline, and that choice drove up prices.

His proposed regulations, he claimed, would save consumers hundreds of millions of dollars every year by preventing those price spikes.

Newsome framed his policy as consumer protection, a way to stop price gouging and hold big oil accountable.

As reporters continued pressing him for answers, his tone grew sharper.

He expressed visible frustration, suggesting that allowing oil companies to take advantage of taxpayers while playing a long game of deception would be foolish.

He positioned himself as the defender of everyday Californians against corporate greed.

Then just 6 days later on September 16th, Newsome sent a formal response letter to both governors.

In that letter, he accused Katie Hobbs and Joe Lombardo of simply echoing talking points from the oil industry.

Think about that for a moment.

A Democratic governor trying to protect her citizens from fuel shortages gets labeled as a puppet of big oil by another Democratic governor.

The bipartisan warning was dismissed as corporate propaganda.

Nuome wasn’t interested in their concerns.

He was moving forward with his plan regardless of what neighboring states had to say.

On October 14th, 2024, Newsome made it official.

He signed the new refinery regulations into law during a public ceremony.

The very regulations that Arizona and Nevada had warned would destabilize the gas supply were now legally binding.

Newsome framed the signing as a victory against big oil and a stand against price gouging.

The new law mandated that refineries maintain minimum fuel stock levels at all times.

It also gave California state authorities the power to establish acceptable profit margins for refining operations.

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

Just 3 days later, the first domino fell.

On October 17th, Philips 66 announced they were shutting down their Los Angeles refinery.

This wasn’t a small facility.

It produced 139,000 barrels of gasoline per day.

That’s roughly 8% of California’s total refining capacity gone overnight.

Philips 66 stated that market dynamics had made continued operation economically unfeasible.

In plain language, California’s new rules made running a refinery impossible.

Then in April 2025, Valero Energy dropped another bombshell.

They announced the closure of their Benicia refinery, effective April 2026.

That facility produced 145,000 barrels per day, another massive chunk of California’s supply.

Valero’s chief executive didn’t mince words.

He pointed out that California had been pursuing aggressive fossil fuel reduction policies for two decades and that the regulatory and enforcement environment in California was now the most stringent and challenging in all of North America.

Together, Philip 66 and Valero represented 20% of California’s total refining capacity.

1/5if of the state’s gasoline production was disappearing within an 18-month window.

When Philip 66 made their announcement, Newsome’s office went silent for weeks.

Eventually, they issued a statement accusing the company of abandoning Californians and trying to dodge regulations.

Interestingly, they never addressed whether the regulations themselves played any role in the decision.

They simply blamed the company for leaving.

State Senator Brian Jones saw the writing on the wall.

On May 6th, 2025, he sent a letter to Governor Nuome warning that gas prices could hit $843 per gallon if refinery closures continued.

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

Jones offered to work with the governor to find solutions before the crisis worsened.

Newsome never responded.

Not a single acknowledgement.

By June 2025, even the California Energy Commission, which reports directly to the governor, started raising red flags.

They issued warnings that California needed to stabilize refining operations immediately.

The problem was undeniable.

Refineries were leaving and the state’s fuel supply was in jeopardy.

That’s when Newsome finally 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.

He held a press conference promising to handle the crisis without ever acknowledging his role in creating it.

In July 2025, the situation became desperate.

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

The same state that drove Valero out with impossible regulations was now scrambling to keep them operating.

Reports surfaced suggesting that California might offer hundreds of millions of dollars in subsidies to keep the refinery running.

Taxpayer money would be used to rescue a business that state regulations had made unprofitable.

Let that sink in.

California passes regulations that make refining economically impossible.

The refineries announced closures and then California offers massive subsidies to keep them open.

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

The very regulation Newsome championed to protect consumers from price gouging got postponed for 5 years.

Vice Chair Siva Gunda assured the public this would ensure a smooth transition, but the message was clear.

The regulation couldn’t actually 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.

In their September 2024 letter, they referenced California’s own energy commission report, which clearly stated that these regulations could create fuel shortages.

Even Nuome’s own experts had identified the risk, but he signed the law anyway.

The infrastructure reality is simple.

Arizona and Nevada can’t just buy gas from somewhere else.

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

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

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

Gas prices spiked immediately.

Arizona saw prices jump 50 cents in a single day.

Nevada’s prices shot up 40 cents.

This was exactly what the governors had warned would happen.

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

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

If you’re operating on tight margins in a state that plans to ban gas-powered cars by 2035, why would you invest hundreds of millions in new infrastructure? It makes no business sense.

Throughout all of this, Newsome continued claiming 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.

Independent economists reached the same conclusion.

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

Meanwhile, California was in full panic mode, trying to stop refineries from leaving, even after hitting Valero with an $82 million fine for air quality violations in December 2024.

It was the largest environmental fine ever issued in California.

Now, California was considering offering hundreds of millions to keep Valero from closing.

The same refinery they just penalized for pollution, they were now begging to stay.

Environmental groups that had supported the original regulations were furious.

10 environmental organizations released a joint statement slamming the potential bailout as a plan that sacrifices 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.

Meanwhile, gas prices kept climbing.

California’s average hit $4.60 per gallon with 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.

And that estimate might actually be conservative.

Arizona watched its prices leap from $3.25 to $4.75 since the refinery closures began.

Nevada went 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 going to get worse.

California even started importing gasoline from Asia.

Tanker ships burning bunker fuel now cross 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.

But California can claim lower instate emissions even as global emissions increase.

In September 2025, Philips 66 began its phase shutdown.

They’re gradually reducing capacity and with each phase that goes offline, pressure mounts on the remaining refineries.

As prices rise, more refineries consider leaving.

It’s a downward spiral.

On October 10th, 2025, Fortune magazine ran a headline that said it all.

California’s impossible dream of ending fossil fuels isn’t working.

Even mainstream media couldn’t ignore the disaster unfolding.

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

Then came the real twist.

On December 15, 2025, reports revealed that Governor Nuomoe 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’s 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.

Tanker ships are importing gas from Asia, and more drilling permits are being issued.

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

And through it all, Governor Nuome refuses to take responsibility.

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

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

Two governors, one Democrat and one Republican, warned California about this outcome.

They were dismissed as liars and corporate shills.

Now their states are paying $5 per gallon because California refused to listen.

That bipartisan warning was ignored and now we’re watching the predictable consequences unfold with nobody willing to accept blame.

California was warned.

It ignored the warnings.

It attacked the messengers.

Now three states are paying the price.

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 there from the beginning.

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 Hobbes is a Democrat.

She tried to warn California and she was dismissed.

This isn’t about protecting oil companies.

This is 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, 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, the bailouts will get bigger, and the fingerpointing will intensify.

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

Before you go, I need you to do something.

Subscribe to the Elizabeth Davis channel if you haven’t already.

Drop a comment below and tell me what you think about this situation.

Should California reverse these regulations? Are Arizona and Nevada right to be angry? Share this video so more people understand what’s really happening.

This story isn’t over.

Three states are caught in an unfolding crisis, and the decisions made in the next few months will determine whether it gets better or much, much worse.

The question is whether anyone in power is willing to admit the truth before it’s too