Phillips 66 plans to close its refinery near the Port of Los Angeles in late 2025.
The company’s announcement Wednesday follows Gov. Gavin Newsom’s signature of legislation implementing new oil controls.
The closure affects the company’s main facility in the Wilmington area of Los Angeles and a crude oil processing plant in the nearby incorporated city of Carson. The facilities, which are connected by a nearly 5-mile pipeline, were built more than 100 years ago.
Why is the Phillips 66 refinery closing?
About 600 employees and 300 contractors operate the refinery, said Mark Lashier, Phillips 66 chairman and CEO.
Operations at both sites must stop because of uncertainty over the refinery’s long-term sustainability, Lashier said in a news release.
But he said Phillips 66 will continue to supply fuel for California by using sources inside and outside of its refining network.
Phillips will also use renewable diesel and sustainable aviation fuels from its complex in the San Francisco Bay Area, Lashier said.
The refinery's closure will reduce California's refining capacity by about 8%, according to Politico. The news website said the state barely produces enough of its special-blend gasoline for California's 31 million gas-powered vehicles.
Expert says it's unlikely Assembly Bill X2-1 influenced the Phillips 66 closure
Before the closure was announced, Newsom signed Assembly Bill X2-1, which requires petroleum refiners to maintain a minimum inventory of refined fuel throughout the distribution chain.
Newsom called the legislature into a special session to pass the bill, which the governor and other supporters said will prevent shortages that cause price hikes.
An expert said he doubts the new law had much to do with Phillips 66’s decision to close the refinery.
"You don't shut down a refinery based on two or three weeks of planning," Severin Borenstein, the faculty director of the Energy Institute at UC Berkeley's Haas School of Business, told KABC-TV in Los Angeles.
"This has been in the works for at least a year,” Borenstein said in the KABC-TV story.
Phillips 66 imports gas for California from other states and countries and might see that as more profitable, he said.
The Los Angeles refinery’s closure isn’t likely to affect gas prices, Borenstein added.
Future use of the refinery's sites
To determine the future of the Wilmington and Carson sites, Phillips 66 is working with Catellus Development Corp. and Deca Cos., two real estate development 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 refinery's closure means an opportunity for economic innovation as well as "improved air quality," said Tim McOsker, the Los Angeles City Council member whose district includes Wilmington.
His office will help workers affected by the closure, McOsker said in a CBS Los Angeles story.
Siva Gunda, vice chair of the California Energy Commission, called Phillips 66 a "valuable partner in California's transition toward a clean energy future."
"Their plan to replace the production lost from the refinery closure is an example of the type of creative solutions that are needed as we transition away from fossil fuels," Gunda said in a statement.
The refinery’s Smilin’ Jack
Phillips 66 is known for something besides oil: the Halloween spirit.
A big oval tank at its Los Angeles refinery is painted orange with eyes, nose and mouth to resemble a Halloween jack-o'-lantern. It’s called Smilin’ Jack, and you can see a photo of it at the Los Angeles Public Library’s website: lapl.org/collections-resources.
Gas prices drop a few cents
California's gas prices have dropped slightly since Tuesday, but they remain the highest in the nation.
The state's average Friday was $4.653 a gallon, according to AAA. The national average was $3.191 per gallon.
Dave Mason covers East County for the Ventura County Star. He can be reached [email protected] or 805-437-0232
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