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Phillips 66, a major player in the energy sector, has made a significant announcement regarding the future of its Los Angeles refinery. As part of a broader strategy, the company is shifting its focus and restructuring operations, including a major move that will impact fuel production in California.

This change comes at a time when the state is implementing new energy measures aimed at stabilizing gas prices and ensuring a steady supply of fuel. The full implications of the refinery’s closure and the company’s transition to renewable energy are still unfolding.

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Phillips 66 to close another century-old refinery in California

Founded in 1923, the Los Angeles Refinery comprises two facilities connected by a pipeline, located five miles apart in Carson and Wilmington, approximately 15 miles southeast of LAX. The two sites currently employ around 600 workers and 300 contractors, processing crude oil into transportation fuels, including gasoline, diesel, and aviation fuel.

However, the refinery's operations are winding down. Phillips 66 announced in the fall that both sites would close by the end of 2025. The company intends to collaborate with the state to ensure fuel supply and meet consumer demand.
The LA refinery processes 165 million barrels of crude oil per day, producing 85 thousand barrels per day of gasoline and 65 thousand barrels per day of diesel and jet fuel.

Considering the refinery’s future, Phillips 66 has determined that keeping it operational is no longer sustainable.

“We understand this decision impacts our employees, contractors, and the local community,” said Mark Lashier, Phillips 66's chairman and CEO. “We will assist and support them throughout this transition.”

The company is shifting its focus towards renewables and aims to develop drop-in liquid fuels made from biomass or waste, renewable hydrogen, and alternative high-octane fuel blends. In 2023, Phillips 66 closed its Rodeo refinery in the San Francisco Bay Area to convert the site into a Renewable Energy Complex.

The fate of the Los Angeles refinery site remains uncertain, though reports suggest the company is negotiating with real estate developers.
“With the long-term viability of our Los Angeles Refinery uncertain and impacted by market dynamics, we’re working with prominent land developers to assess potential future uses for our strategically located property near the Port of Los Angeles,” Lashier said in a statement. “Phillips 66 remains dedicated to serving California and will continue taking steps to meet commercial and customer needs.”

Gavin Newsom signs energy legislation

Just days before Phillips 66's announcement, California Governor Gavin Newsom signed the ABX2-1 energy bill into law. This legislation is designed to prevent gas price hikes and save consumers money at the pump.

The bill mandates refiners to maintain minimum gasoline inventories and prepare plans to avoid shortages during maintenance outages. Given California's geographic isolation from U.S. Gulf Coast and Midwest refining centers, the state must either produce all its fuels locally or import them from Asia.