Days after Newsom signs bill aimed at ‘big oil,’ Phillips 66 says it plans to stop operating refinery

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Phillips 66 on Wednesday announced it plans to cease operations at its Los Angeles-based refinery near the end of 2025.”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,” said Mark Lashier, the chairman and CEO of Phillips 66.The announcement comes days after Gov. Gavin Newsom signed legislation that kickstarts a process for the California Energy Commission to set new rules around backup fuel supply and maintenance for oil refiners. Newsom’s administration pushed the new law in an attempt to prevent gas price spikes, noting prices surge at the pump when refineries undergo maintenance or an outage and are low on supply. The announcement also comes weeks before the California Air Resources Board votes on updates to the state’s Low Carbon Fuel Standards that will have impacts on the oil and gas industry. After this story first published, a spokesman for Phillips 66 told KCRA 3 the decision was not politically motivated nor was it in response to the governor’s recent bill signing. “Phillips 66 is not exiting California, as we want to continue to be a trusted and deliberate partner of the state,” said Al Ortiz with Phillips 66. “This announcement is based on consideration of multiple factors, including future options for the site as part of Phillips 66’s ongoing review of its portfolio of assets. Phillips 66 still owns and operates midstream assets and the Rodeo Renewable Energy Complex, which produces renewable diesel that consumers can find at our branded retail stations across the state. We look forward to finding new ways to serve California markets.” Phillips 66 indicated in its initial announcement that it supports the state’s efforts to expand fuel supply capability. The company promised to work with California to maintain current levels and potentially increase supplies to meet the needs of consumers in the state. The refinery currently employs 600 workers and 300 contractors. The refinery accounts for 8% of California’s crude oil capacity, according to state data. In a statement, a spokesperson for the Western States Petroleum Association said, “Today, we were made aware of the Phillips 66 announcement to cease operations at its Los Angeles-area refinery in the fourth quarter of 2025. We understand that Phillips 66 is not leaving the state and remains committed to meeting California’s commercial and consumer fuel demands.” “We recognize the challenges faced by companies like Phillips 66, which are trying to operate in one of the most highly regulated energy environments in the world. These refinery closures are a direct result of policies that make it increasingly difficult to maintain and expand critical infrastructure,” said Alessandra Magnasco with the California Fuels and Convenience Alliance. “While we understand the need for sustainable progress, we urge policymakers to consider the immediate impacts on consumers, workers, and the stability of California’s fuel supply.” While the future use of the refinery is not yet determined, the number of oil refiners in California has dwindled over the last few decades as the state has worked to cut its reliance on oil and gas to reduce the impacts of climate change. “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 Phillips 66 refinery in the Los Angeles area is one of California’s nine major oil refiners. Before Wednesday’s announcement, lawmakers from both parties had expressed fears of the impacts of another one shutting down. A Chevron executive told KCRA 3 last week that the governor and California legislature are driving the industry out of state and threatened to no longer invest in California if regulations continue to mount. “It’s going all according to @GavinNewsom’s plan who said in 2021 he does not see a future for oil in CA. This means lost high-paying, union jobs & more expensive gasoline,” said Assemblyman Joe Patterson, R-Rocklin, in a post on X. When reached for comment, Gov. Newsom’s office referred KCRA 3 to the California Energy Commission.The commission’s Vice Chair Siva Gunda said in a statement: “Phillips 66 has been a valuable partner in California’s transition toward a clean energy future. The company has committed to minimizing impacts on Californians while they continue to meet fuel demands, maintain reliable supplies, and ensure they take necessary steps to fulfill both commercial and customer needs. 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. We remain dedicated to collaborating with industry leaders to secure an affordable and reliable fuel supply for all consumers as we move forward.”See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter

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