California energy regulators granted a major rate increase to a struggling oil pipeline company on Thursday, guaranteeing a windfall for the firm but leaving open questions on whether the funds will be enough to stave off closure.
What happened: The California Public Utilities Commission voted to allow Crimson California Pipeline LP to increase the rate it charges to transport crude oil from Los Angeles Basin oil fields to Los Angeles refineries by 26 percent.
Why it matters: Crimson executives have warned that without significant rate increases on their pipeline systems, they would be forced to shutter their infrastructure carrying oil from Southern California to the Bay Area, putting further pressure on the state’s refining industry.
Context: Crimson, which encompasses several similarly named companies and is partially owned by CorEnergy, is California’s largest crude oil pipeline operator, CorEnergy CEO Robert Waldron wrote in a September letter to Gov. Gavin Newsom (D). The company operates a Southern California pipeline system as well as the San Pablo Bay pipeline, the only pipeline that carries Kern County crude oil to the PBF Martinez and Valero Benicia refineries in the Bay Area.