Oil giant Phillips 66 said on Oct. 16 that it plans to shut down its refinery in the Los Angeles area of California in the fourth quarter of 2025.
About 900 people are involved in operating the oil refinery, including approximately 600 employees and hundreds of contractors, according to the company.
Lashier cited uncertainty regarding “long-term sustainability” and said the refinery was “affected by market dynamics.”
“We want to continue to be a trusted and deliberate partner with the state,” the spokesperson said. “This announcement is based on the consideration of multiple factors, including future options for the site as part of Phillips 66’s ongoing review of its portfolio of assets.”
During legislative hearings in September—which began after Gov. Gavin Newsom called a special session on Aug. 31 to address spiking oil prices—lawmakers and administration officials discussed the prospect of refiners leaving the state.
Siva Gunda, vice chair of the energy commission, said that losing a refinery could negatively affect the market.
“If you are asking what the risk would be if a large refinery were to close, there is risk,” Gunda said. “There’s absolutely reduction in supply, and we'll have demand.”
It is unclear how the loss of production from the Los Angeles refinery will affect supply and or what the impact will be on prices at the pump.
The company vowed to work with the state to continue supplying markets and to meet demand using resources from the company’s other refinery complex near San Francisco, as well as through its refining network.
“We are ... not exiting California,” the spokesperson told The Epoch Times. “Phillips 66 still owns and operates midstream assets and ... 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.”
Though less gas will be refined in the Golden State, the firm plans to use a combination of strategies to continue operating in California.
“Right now, we’re focused on running the Los Angeles Refinery safely and reliably while it operates,” the spokesperson said. “Once we cease operations, we will work with California to supply the market with transportation fuels including ... gasoline imports and renewable fuels.”
Phillips 66 has engaged 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 statement said.
“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,” Lashier said. “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.”
One organization representing the industry said gas prices will ultimately rise due to reduced supply.
Oil industry insiders said the timing of the announcement suggests that concerns about regulations and the cost of doing business could, in part, be responsible for the lower profit margins that led to the decision to close the refinery.
His colleague suggested the news could precipitate more closures given the state’s regulatory environment.
The governor’s office did not respond to requests for comment before publication.