Phillips 66 will initiate layoffs at its Los Angeles refinery in December 2025, affecting 900 workers. Learn how this closure impacts California’s fuel supply, labor market, and future land development.
Table of Contents
- Overview of the Closure
- Timeline and Workforce Impact
- Reasons Behind the Shutdown
- Implications for California’s Fuel Supply
- Future Plans for the Refinery Site
- Broader Industry Trends
- FAQs
Overview of the Closure
Phillips 66 has announced plans to cease operations at its Los Angeles-area refinery by the end of 2025. The refinery, which processes approximately 139,000 barrels per day, has been a significant contributor to California’s fuel supply. The decision to shut down the facility is attributed to market dynamics and the long-term sustainability challenges of the site. (Enerdata, Urbanize LA)
Timeline and Workforce Impact
- October 2024: Phillips 66 announced its intention to wind down operations at the Los Angeles refinery.
- October 2025: Operations are expected to cease.
- December 2025: Layoffs will begin, affecting approximately 600 employees and 300 contractors. (AP News)
The company has stated that it will work to support affected employees and contractors during the transition. (investor.phillips66.com)
Reasons Behind the Shutdown
Several factors have influenced Phillips 66’s decision:(AP News)
- Market Dynamics: The refinery has been less profitable compared to other company facilities.
- Regulatory Environment: California’s stringent environmental regulations have made operations more challenging.
- Strategic Shift: Phillips 66 is focusing on renewable energy, having converted its Rodeo refinery near San Francisco into a renewable fuels facility. (Reuters, energyintel.com, Enerdata)
Implications for California’s Fuel Supply
The closure of the Los Angeles refinery will remove approximately 8% of California’s refining capacity. This reduction could lead to:(AP News)
- Increased Fuel Prices: A tighter supply may drive up gasoline and diesel prices.
- Supply Chain Adjustments: California may need to import more fuel or rely on other in-state refineries.
- Regulatory Responses: The state may implement measures to mitigate price spikes and ensure fuel availability.(Reuters, AP News)
Future Plans for the Refinery Site
Phillips 66 is collaborating with land development firms to evaluate future uses for the 650-acre refinery site, which spans Carson and Wilmington near the Port of Los Angeles. Potential redevelopment could include commercial or industrial projects that align with regional economic goals.(Urbanize LA)
Broader Industry Trends
The closure of Phillips 66’s Los Angeles refinery is part of a larger trend in the oil refining industry:
- Refinery Closures: Other refineries, such as Valero’s Benicia facility, have also announced shutdowns.
- Shift to Renewables: Companies are increasingly investing in renewable energy sources and converting existing facilities.
- Regulatory Pressures: Environmental policies are influencing operational decisions across the industry.(Reuters)
FAQs
Q1: Why is Phillips 66 closing its Los Angeles refinery?
A: The decision is due to market dynamics, including lower profitability and regulatory challenges, making long-term operations unsustainable. (Reuters)
Q2: How will the closure affect fuel prices in California?
A: The reduction in refining capacity may lead to higher fuel prices due to tighter supply, though the exact impact will depend on various market factors.(Diario AS)
Q3: What support is available for affected workers?
A: Phillips 66 has pledged to support employees and contractors during the transition, though specific programs have not been detailed. (Reuters)
Q4: What are the plans for the refinery site post-closure?
A: The company is working with developers to explore future uses for the site, potentially transforming it into commercial or industrial spaces. (Urbanize LA)