Phillips 66 reveals plan to close massive oil refinery near Los Angeles just days after Gov. Newsom imposes new mandates

By 
 October 18, 2024

Democratic California Gov. Gavin Newsom is a top ally of Vice President Kamala Harris, but he just took action that could prove detrimental to her chances of winning the presidency in November.

On Monday, Newsom signed into law a bill that will more tightly regulate oil and gas refineries in the state, and just days later, Phillips 66 Co. announced that it plans to soon shut down its massive oil refinery facility near Los Angeles, according to One America News.

However, while that large facility will be shuttered by the end of next year, the company plans to obtain its supply of gasoline in the state from other sources and to continue operating a smaller refinery elsewhere in the state, largely because of prior investments made to meet other state regulations and focus on the production of "renewable" diesel and aviation fuels.

Large refinery to be shut down next year

In a Wednesday statement, Phillips 66 Chairman and CEO Mark Lashier said, "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."

"Phillips 66 remains committed to serving California and will continue to take the necessary steps to meet our commercial and customer demands," he continued.

The Oil & Gas Journal reported that Lashier further referenced the jobs that will be lost by the impending closure of the refinery and added that the company will make efforts "to help and support [individuals impacted by the closure] through this transition."

The facility in question occupies land on two separate sites near the L.A. Post -- a 235-acre facility in Carson that processes crude oil connected by a pipeline to a 424-acre facility in Wilmington that further refines the oil into gasoline and other products -- and those two collectively produce nearly 140,000 barrels per day and employ around 600 full-time workers and another 300 contract workers.

Lashier also revealed that the company is in talks with two real estate development firms about alternate uses for the combined 650 acres in the L.A. area, and 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."

The Journal further noted that Phillips 66 has no plans to shut down its Rodeo Renewable Energy Complex near San Francisco, which is a formerly conventional refinery that was recently converted -- due to prior state mandates -- to focus exclusively on the production of "renewable diesel" and "sustainable aviation fuel," of which it processes about 50,000 barrels per day.

Newsom, California Democrats blame oil and gas industry for "price spikes"

OAN reported that the surprising announcement from Phillips 66 about the closure of its L.A. Port refinery, which accounts for around 8% of the state's oil refining capacity, came just two days after Gov. Newsom announced his signing of a bill that will impose more strict mandates on oil and gas companies ostensibly to hold them accountable for occasional fluctuations in gas prices.

On Monday, the governor signed into law ABX2-1, which will require oil refineries to maintain minimum inventories of processed fuel and mandate contingency plans to keep supplies on hand during maintenance periods when the refineries are temporarily shut down.

"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," he added. "I’m grateful to our partners in the Senate and Assembly for acting quickly to push this forward and help deliver relief for Californians."

In other words, the state will force oil and gas companies to bear sole responsibility for the myriad reasons that gas prices occasionally fluctuate -- some of which are entirely out of the control of those companies -- and burden them with additional costly mandates and requirements that will drive up the costs of doing business and diminish their end profits.

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