Preheat the oven to 325˚. Combine the chili powder with 2 teaspoons salt and 1 teaspoon pepper in a small bowl and rub all over the pork.
Heat the vegetable oil in a large Dutch oven over medium-high heat. Add the pork and cook, turning, until browned on all sides, 4 to 7 minutes. Remove to a plate. Pour off all but about 1/2 tablespoon oil from the pot. Reduce the heat to medium and add the onion and garlic. Cook, stirring occasionally, until softened, about 3 minutes. Add 1 1/2 cups water and scrape up any browned bits from the bottom of the pot. Add the bay leaves, then return the pork to the pot. Bring to a simmer, then cover and transfer to the oven.
Roast until the pork is very tender, 2 to 2 hours and 30 minutes. Discard the bay leaves and shred the pork in the pot with 2 forks, discarding any large chunks of fat. Stir to combine with the onion, garlic and any liquid. Season with salt and pepper.