Phillips 66 has announced that it plans to shut down a Los Angeles-area refinery by the end of 2025 due to market concerns. The refinery accounts for about 8% of California’s refining capacity and has been in operation for over a century. The company stated that it will continue to operate in the state and is working with land development firms to evaluate future use of the property near the Port of Los Angeles. The closure will impact 600 employees and 300 contractors who help operate the refinery.
The decision to close the refinery comes after Democratic Gov. Gavin Newsom signed a law aimed at preventing gas prices from spiking at the pump. The law authorizes energy regulators to require refineries to maintain a certain level of fuel on hand to avoid sudden increases in gas prices when refineries go offline for maintenance. Phillips 66 has expressed support for the state’s efforts to keep certain levels of fuel on hand to meet consumer needs. The company also operates a refinery near San Francisco, which accounts for about 5% of California’s refining capacity.
In addition to the Los Angeles-area refinery closure, Phillips 66 Santa Maria, a refinery located about 62 miles northwest of Santa Barbara, shut down in 2023. The company had announced plans to convert its San Francisco-area site into one of the world’s largest renewable fuels facilities. Newsom has applied pressure on lawmakers to pass oil and gas regulations and has called the state Legislature into a special session in 2022 to pass legislation aimed at cracking down on oil companies for making too much money. California has passed policies to phase out the sale of new fossil fuel-powered lawn mowers, cars, big rigs, and trains as part of its efforts to become a climate leader.
Phillips 66 CEO Mark Lashier stated that the long-term sustainability of the Los Angeles Refinery was uncertain and affected by market dynamics. Despite the refinery closure, the company remains committed to serving California and will continue to take necessary steps to meet commercial and customer demands. The closure of the Los Angeles-area refinery is expected to have an impact on the employees and contractors who work at the facility. The company is working with leading land development firms to evaluate future use of the property near the Port of Los Angeles.
California, under the leadership of Gov. Newsom, has been focused on passing regulations and policies aimed at reducing the state’s reliance on fossil fuels and combating climate change. The state has implemented measures to transition to renewable energy sources and reduce greenhouse gas emissions. While Phillips 66’s decision to shut down the Los Angeles-area refinery is significant, the company will continue to operate in the state and support California’s efforts to meet consumer fuel needs. The closure of the refinery underscores the changing landscape of the oil and gas industry and the shift towards renewable energy alternatives.
