LOS ANGELES — On Wednesday, Phillips 66 declared its intention to close a refinery in the Los Angeles region by the end of 2025, citing concerns related to market dynamics.
This refinery is responsible for approximately 8% of California’s crude oil production, as reported by the state’s Energy Commission. The company emphasized that it will continue its operations within California.
“In light of the uncertain long-term sustainability of our Los Angeles Refinery, influenced by market conditions, we are collaborating with top land development firms to explore possible future uses for our strategically important properties situated near the Port of Los Angeles,” stated CEO Mark Lashier in an official communication. “Phillips 66 remains dedicated to California and will undertake necessary measures to fulfill our commercial needs and customer requirements.”
The closure is expected to affect around 600 employees and 300 contractors who assist in the refinery’s operations, as indicated in the company’s press release.
This announcement follows closely after Governor Gavin Newsom, a Democrat, enacted a new law designed to stabilize gas prices at filling stations. This legislation empowers energy regulators to enforce requirements on refineries to hold specific quantities of fuel in reserve. The aim is to prevent sudden spikes in gas prices when refineries undergo maintenance outages.
Phillips 66 expressed support for the state’s initiatives concerning fuel reserves to cater to consumer needs. Furthermore, the company also runs a facility near San Francisco, which contributes approximately 5% of the state’s crude oil supply, per the Energy Commission’s data. Earlier in 2023, Phillips 66 ceased operations at its Santa Maria refinery, located around 62 miles (100 kilometers) northwest of Santa Barbara, as it announced plans for transforming its San Francisco-area site into one of the world’s largest renewable fuels production facilities.
Governor Newsom has been vocal about his efforts to urge lawmakers to implement stricter regulations on the oil and gas industry. He called a special session of the state Legislature in 2022 to enact laws that would hold oil companies accountable for excessive profits. The Governor frequently emphasizes California’s leadership in climate initiatives. Recent state policies aim to phase out the sale of new fossil fuel-powered lawn mowers, vehicles, large trucks, and trains.