Phillips 66 to close California refinery days after Newsom signed oil law

SACRAMENTO, California — Phillips 66 announced Wednesday that it will close its Los Angeles oil refinery next year, citing “long-term uncertainty” two days after Gov. Gavin Newsom signed a law clearing the way for new regulations on the state’s refiners.

The closure would knock out about 8 percent of refining capacity in a state that barely produces enough of its special-blend gasoline to meet demand from its 31 million gas-powered vehicles.

“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, the company’s chairman and CEO, said in a statement.

Newsom on Monday signed legislation aimed at preventing gasoline price spikes by giving the state authority to require refiners to store more gas and share resupply and maintenance plans with the state.

Phillips 66 spokesperson Al Ortiz said in an email that the announcement was not in response to Newsom’s signing the law. He said the company would work with California to maintain and maybe even increase gas supplies, but didn’t say where the new fuel would come from. Ortiz added that the company is not exiting California, noting its remaining San Francisco refinery and other facilities.

But the oil industry has been warning that the long-term effects of Newsom’s aggressive regulatory push could drive refiners out of the state. Industry lobbyists repeated those warnings in legislative hearings over Monday’s law, which they vehemently opposed. The governors of Arizona and Nevada raised their own concerns in letters to Newsom last month.

Newsom held a press conference after signing the new law in which he accused Big Oil of “gouging” and “screwing” Californians by charging high prices and lobbying lawmakers. The law , which he called the first of its kind in the nation, comes as his administration weighs another major restriction — a potential profit cap for refiners in the state.

His administration deferred comment Wednesday to the California Energy Commission. CEC Vice Chair Siva Gunda said in a statement that Phillips 66 has been a “valuable partner in California’s transition” and that the company’s “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,” Gunda said in the statement.

Newsom pursued the gas price regulations after prices spiked the last two Septembers to an average of more than $6 per gallon in the state. He has aggressively called out — and sued — Big Oil for the companies’ role in climate change and has advanced nation-leading clean energy mandates including a ban on the sale of new gas-powered cars by 2035. Behind the developments is a broader effort to wean the state off fossil fuels without major disruptions amid its transitions to renewables.

Phillips 66 owns the 650-acre Los Angeles refinery — the state's seventh-largest — plus the one in San Francisco. California’s refinery market is dominated by five oil majors that produce nearly all of its special blend of low-polluting gas at just nine refineries. The California Energy Commission has found that the remaining refinery capacity only slightly exceeds the state’s fuel consumption.

The company’s announcement said it plans to shut down the refinery, which employs about 600 people, in the fourth quarter of 2025. The company said in the statement that “expanding supply capabilities will be critical” in the state and said it will “supply gasoline from sources inside and outside its refining network as well as renewable diesel and sustainable aviation fuels” from its San Francisco refinery.