California oil refinery announces closure after Newsom signs more regulations

The oil company Phillips 66 announced Wednesday that it is closing its Los Angeles-area refinery by the end of 2025, pointing to concerns about the future market. 

The announcement comes days after California Gov. Gavin Newsom signed a new law on Monday that will set new regulations on the oil industry in the Golden State. 

“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,” Mark Lashier, chairman and CEO of Phillips 66, said in a statement. “Phillips 66 remains committed to serving California and will continue to take the necessary steps to meet our commercial and customer demands.”

Lashier did not mention the new law signed by Newsom. 

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The company’s Los Angeles-area refinery accounts for about 8% of the state’s refining capacity, according to the California Energy Commission.

Phillips 66 has tapped two real estate development firms, Catellus Development Corporation and Deca Companies, to evaluate the future use of the 650-acre sites in Wilmington, California, and Carson, California, the company said in a press release.

“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 oil company estimates that approximately 600 employees and 300 contractors currently operate the Los Angeles-area refinery. 

“We understand this decision has an impact on our employees, contractors and the broader community,” Lashier said. “We will work to help and support them through this transition.”

At the California State Capitol on Monday, Newsom signed legislation his office said will “help prevent gas price spikes and save consumers money at the pump.” 

The law allows the state to require oil refiners to maintain a minimum inventory of fuel and authorizes the California Energy Commission to require refiners to plan for resupply during refiner maintenance outages. 

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Newsom’s office stated that the measure will “prevent price spikes that cost Californians upwards of $2 billion last year, giving the state more tools to require that petroleum refiners backfill supplies and plan ahead for maintenance.” 

“Price spikes have cost Californians billions of dollars over the years, and we’re not waiting around for the industry to do the right thing — we’re taking action to prevent these price spikes and save consumers money at the pump,” Newsom said in a statement. “Now, the state has the tools to make sure they backfill supplies and plan ahead for maintenance so there aren’t shortages that drive up prices. I’m grateful to our partners in the Senate and Assembly for acting quickly to push this forward and help deliver relief for Californians.”

California Assembly Speaker Robert Rivas, a fellow Democrat, said the measure is a “critical accomplishment” in lowering the cost of living and “big oil companies are now responsible for stabilizing prices at the pump.”

Though its Los Angeles-area refinery will shut down, Phillips 66 said it is not ceasing operations in the state of California entirely. The oil company promised to work with the state to “supply fuel markets and meet ongoing consumer demand.” 

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Phillips 66 said it “will supply gasoline from sources inside and outside its refining network as well as renewable diesel and sustainable aviation fuels from its Rodeo Renewable Energy Complex in the San Francisco Bay area.”

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