In a significant move that will affect the local job market and California’s oil supply, Phillips 66 announced plans to close its Los Angeles-area oil refinery by the end of 2025. This decision is driven by market concerns and comes as the company reassesses its operations in the state.
Impact on Employment and Refining Capacity
The refinery, which has been a staple of California’s energy landscape, employs around 900 people—600 direct employees and 300 contractors. The closure will eliminate these jobs, raising concerns about the economic impact on the community. The refinery is responsible for approximately 8% of California’s total refining capacity, a significant figure in a state that is one of the largest consumers of oil in the country.
Company Statement
Phillips 66 CEO Mark Lashier stated, “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.” He assured that the company remains committed to serving California and will take necessary steps to meet commercial demands.
Timing and Context
This announcement follows a recent law signed by Democratic Governor Gavin Newsom, aimed at preventing sudden gas price spikes. The law requires refineries to maintain a minimum level of fuel reserves to mitigate price fluctuations during maintenance shutdowns. However, Phillips 66 clarified that their decision to close the refinery was not influenced by this new regulation.
Previous Shutdowns
This is not the first time Phillips 66 has made significant changes to its operations in California. Earlier this year, the company shut down its Santa Maria refinery, located about 62 miles northwest of Santa Barbara, to convert the facility into one of the world’s largest renewable fuels plants. Additionally, Phillips 66 operates another refinery near San Francisco, which accounts for about 5% of California’s refining capacity.
Governor Newsom’s Push for Regulation
Governor Newsom has been actively pushing for stricter regulations on oil and gas companies. He called a special legislative session in 2022 to address concerns over excessive profits by oil companies. California has also implemented progressive policies aimed at reducing fossil fuel dependency, including plans to phase out the sale of new fossil fuel-powered vehicles and equipment.
The Broader Picture
The closure of the Phillips 66 refinery is part of a larger trend in California’s energy sector, as the state seeks to transition to more sustainable energy sources. While this shift is crucial for combating climate change, it poses challenges for communities that rely on traditional energy jobs.
Conclusion: A Changing Energy Landscape
As Phillips 66 prepares to shut down its Los Angeles refinery, the focus will shift to how the company and the state navigate the economic and energy implications of this decision. The loss of jobs and refining capacity will have immediate effects, but it also highlights California’s commitment to a greener future.
For employees and contractors, the next few years will bring uncertainty, but there may also be opportunities in emerging sectors focused on renewable energy. As the state continues to lead the way in climate policy, it will be essential to balance economic needs with environmental goals.
I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.