LOS ANGELES (AP) — Phillips 66, the oil company, announced on Wednesday its intention to close a refinery in the Los Angeles area by the end of 2025 due to market-related issues.
This facility represents approximately 8% of California’s refining capacity, as reported by the state’s Energy Commission. The company confirmed it will continue its operations within the state.
“Given the long-term viability of our Los Angeles Refinery is in question and influenced by market conditions, we are collaborating with prominent land development firms to assess the potential future use of our uniquely and strategically located sites near the Port of Los Angeles,” stated CEO Mark Lashier. “Phillips 66 is committed to supporting California and will persist in taking necessary actions to fulfill our commercial requirements and customer expectations.”
The shutdown will affect around 600 employees and 300 contractors who assist in running the refinery, according to a company news release. This refinery includes two facilities established over a century ago.
The announcement follows shortly after Democratic Governor Gavin Newsom signed a law designed to prevent sharp increases in gas prices at the pumps. The law empowers energy regulators to mandate that refineries maintain a certain supply of fuel. The aim is to circumvent sudden price spikes when refineries are offline for maintenance.
Phillips 66 clarified that its decision to close is unrelated to the new legislation, stating it supports the state’s initiatives to ensure sufficient fuel supplies to meet consumer demands.
Additionally, the company operates a refinery located near San Francisco, contributing about 5% to California’s refining capacity, according to the state Energy Commission. The Phillips 66 Santa Maria refinery, situated roughly 62 miles (100 kilometers) northwest of Santa Barbara, ceased operations in 2023 after the company revealed plans to transform its San Francisco-area site into “one of the world’s largest renewable fuels facilities.”
Governor Newsom has urged lawmakers to enact regulations on the oil and gas industries. He convened the state Legislature for a special session in 2022 to pass legislation targeting oil companies for excessive profits. The Democrat frequently highlights California’s role as a climate leader. The state has implemented policies to phase out the sale of new fossil fuel-powered lawn mowers, vehicles, trucks, and trains.
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This story has been corrected to clarify that the Los Angeles-area refinery represents about 8% of California’s refining capacity, rather than producing that percentage of the state’s crude oil. The same correction has been made for the San Francisco-area refinery.
