Next year Californians won’t get their kicks, or their gas, from Phillips 66. Last week, the Houston-based company announced it was shutting down its Los Angeles refinery in the fourth quarter of 2025, affecting about 600 employees and 300 contractors. It produces about 8% of the state’s gas.
Chairman and CEO Mark Lashier said the refinery’s “long-term sustainability” was “uncertain and affected by market dynamics.” Mike Smith, an official with the United Steel Workers union, which represents most of the employees, called it “a devastating loss for workers and the surrounding communities.”
“Thanks to Gavin Newsom’s showboating and incompetence, hundreds of workers will lose their jobs while California drivers will face a massive price hike,” responded Assembly Republican Leader James Gallagher of Yuba City in a statement. “Great work, Gavin.”
The announcement came just days after Gov. Gavin Newsom signed Assembly Bill X2-1, by Assemblymember Gregg Hart, D-Santa Barbara. It’s supposed to make oil refiners keep adequate supplies to prevent price spikes, which commonly occur during maintenance or shifts between the summer and winter gas blends. Newsom claimed he was forcing the industry “to do the right thing” to “prevent these price spikes and save consumers money at the pump.”
However, the new bill didn’t directly spark the Phillips closure, Robert Michaels told us; he’s a professor emeritus at Cal State Fullerton specializing in energy economics. He added the state’s use of gasoline and other fuels has been decreasing in recent years, reducing the need for as much refining as in the past. A shutdown like this involves a long planning process. But it’s undeniable that the state’s hostility to affordable energy didn’t help matters.
Ordinary Californians are only going to pay the price over time and in different ways.
State Sen. Steve Bradford, D-Gardena, told the Los Angeles Times that the closure could contribute to higher prices and that “now we’ll have ships docked at our ports spewing pollution while they’re unloading gasoline from countries that don’t have the same environmental standards that we have.”
These are among the unintended consequences of intentional policy efforts by state politicians to substitute their own personal preferences for what the people of California actually need. Indeed, the latest closure reflects a trend that goes back decades. U.S. Energy Department figures show the state’s refining capacity has dropped from 2.5 million barrels a day in 1984 to 1.62 million today.
The Phillips 66 action came two months after Chevron, the state’s biggest and oldest oil company, announced it was moving its headquarters from San Ramon to Houston. CalMatters reported at the time the move’s political aspects “could not be ignored” because of Newsom’s “vilification” of Big Oil. Newsom also has led a ban on selling new gas-powered cars by 2035, although, Newsom is termed-out of office soon. His bad ideas should go with him.