Oil company Phillips 66 has announced its decision to close down a refinery located in the Los Angeles area by the end of 2025. This refinery currently contributes around 8% of California’s crude oil production, according to the state’s Energy Commission. Even with this closure, the company plans to maintain its presence in the state.
CEO Mark Lashier stated that due to uncertainties regarding the long-term sustainability of their Los Angeles Refinery, impacted by market dynamics, they are collaborating with leading land development firms to explore future uses for their strategically positioned properties near the Port of Los Angeles. Lashier emphasised, “Phillips 66 remains committed to serving California and will continue to take the necessary steps to meet our commercial and customer demands.”
The closure of the refinery is expected to affect 600 employees and 300 contractors involved in its operations, as per the company’s press release. This decision comes shortly after Democratic Governor Gavin Newsom signed a new law aimed at preventing sudden spikes in gas prices. The law empowers energy regulators to mandate refineries to maintain a certain fuel level to avoid price surges when refineries undergo maintenance.
Phillips 66 has expressed support for the state’s initiative to ensure fuel availability meets consumer needs. The company also operates a refinery in the vicinity of San Francisco, responsible for about 5% of California’s crude oil output. Additionally, the Phillips 66 Santa Maria refinery, located approximately 62 miles northwest of Santa Barbara, ceased operations in 2023. Plans were announced to convert its San Francisco-area site into one of the world’s largest renewable fuels facilities.
Governor Newsom has been urging legislators to enact oil and gas regulations. He convened a special session in 2022 to push through laws targeting oil companies for excessive profits. Newsom frequently highlights California’s role as a leader in climate action, with recent policies phasing out the sale of new fossil fuel-powered vehicles and equipment.
This decision by Phillips 66 to close its Los Angeles-area refinery underscores the shifting dynamics in the energy sector and reflects broader efforts towards sustainable practices and environmental stewardship.