Phillips 66 announced on Wednesday that it plans to shut down its refinery located in the Los Angeles area by the end of 2025 due to uncertainties about future market conditions. This decision follows closely after California Governor Gavin Newsom’s signing of a new regulatory law targeting the oil sector earlier this week.
“With the long-term sustainability of our Los Angeles Refinery uncertain and affected by market dynamics, we are working with leading land development firms to evaluate the future use of our unique and strategically located properties near the Port of Los Angeles,” Mark Lashier, chairman and CEO of Phillips 66, said in a statement. “Phillips 66 remains committed to serving California and will continue to take the necessary steps to meet our commercial and customer demands.”
Notably, Lashier did not reference the new legislation from Newsom. The refinery in question contributes to approximately 8% of California’s overall refining capacity, as reported by the California Energy Commission.
To explore potential new uses for its 650-acre properties in Wilmington and Carson, Phillips 66 has partnered with land development firms Catellus Development Corporation and Deca Companies. “These sites offer an opportunity to create a transformational project that can support the environment, generate economic development, create jobs and improve the region’s critical infrastructure,” Lashier said.
The facility currently employs around 600 workers along with 300 contractors. “We understand this decision has an impact on our employees, contractors and the broader community,” Lashier said. “We will work to help and support them through this transition.”
On Monday, at the California State Capitol, Newsom enacted legislation aimed at “helping prevent gas price spikes and save consumers money at the pump.” This law enables the state to mandate that oil refiners retain a minimum fuel inventory and allows the California Energy Commission to enforce planning for resupply during maintenance outages of refineries.
Newsom’s office mentioned that this measure is designed to “prevent price spikes that cost Californians upwards of $2 billion last year, giving the state more tools to require that petroleum refiners backfill supplies and plan ahead for maintenance.”
“Price spikes have cost Californians billions of dollars over the years, and we’re not waiting around for the industry to do the right thing — we’re taking action to prevent these price spikes and save consumers money at the pump,” Newsom said in a statement. “Now, the state has the tools to make sure they backfill supplies and plan ahead for maintenance so there aren’t shortages that drive up prices. I’m grateful to our partners in the Senate and Assembly for acting quickly to push this forward and help deliver relief for Californians.”
California Assembly Speaker Robert Rivas, also a Democrat, characterized the legislation as a “critical accomplishment” for reducing living costs and emphasized that “big oil companies are now responsible for stabilizing prices at the pump.”
Despite the impending closure of the Los Angeles refinery, Phillips 66 affirmed that it will continue its operations in California. The company committed to collaborating with the state to “supply fuel markets and meet ongoing consumer demand.” Phillips 66 further stated that it “will supply gasoline from sources inside and outside its refining network as well as renewable diesel and sustainable aviation fuels from its Rodeo Renewable Energy Complex in the San Francisco Bay area.”
