Phillips 66’s decision to close its Los Angeles area refinery has touched off a wave of speculation over what will become of the 650 acres in Wilmington and Carson, an industrial backbone near the Port of Los Angeles.
The company hired two development firms to envision what could be built on a sprawling complex dating to the early 1900s.
What’s certain is that it will take time to unwind a labyrinth of pipes, tanks and an assortment of machinery that processes crude oil into gasoline, kerosene and jet fuel.
What isn’t so certain is what comes next. Concepts being kicked around by locals range from luxury homes and retail strip centers to data centers and other industrial uses.
Tim McOsker, the District 15 councilmember who represents Wilmington and several other South Bay communities, said that while the refinery closure is significant, new development could open opportunities for new jobs, improved air quality and innovative economic benefits in the years to come.
“It’s crucial that this property remains an important economic driver for our district, benefiting both our environment and our local workforce,” he announced in a statement on Oct. 18.
As the oil industry grapples with the nation’s pivot to cleaner energy sources, observers familiar with the refinery operation in Southern California see a tough road ahead for redevelopment at the heavily polluted sites. Phillips has processed oil here for a century.
“You need to understand the size of the cleanup, and where the storage tanks are located. There’s a good chance that there’s been some leaks over the past 100 years,” said Najmedin Meshkati, a professor of civil and environmental engineering with the University of Southern California’s Viterbi School of Engineering. “The older a plant is, the biggest challenge will be restoration of the soil. This could take years to remediate.”
Meshkati provided expert testimony to safety panels investigating the Deepwater Horizon explosion in 2010 that left a well gushing on the seabed in the Gulf of Mexico, and a Texas City refinery explosion caused by a flammable hydrocarbon vapor cloud in 2005.
“Remediation is not easy. It is not a cakewalk,” Meshkati said.
Remediation aside, the talk of housing, industrial and mixed-use development for the site is top of mind.
“While there is a possibility that homes can be safely built within former refineries, wider community goals may include uses such as a park, commercial and retail, or a mix of uses,” said Lauren Ghazikhanian, a spokeswoman with the Center for Creative Land Recycling, a Berkeley-based nonprofit that supports the cleanup and reuse of land that may have been polluted from a factory or other industrial facilities.
“The two Phillips 66 refineries in Los Angeles present complex reuse challenges due to their size and the history of operation,” Ghazikhanian said. “Reuse options will depend on response actions for the contamination, zoning, market forces, impacts to and what the community wants on the site and surrounding properties.”
Norman Rogers, a second vice president with the United Steelworkers Local 675, said one possibility could be to use a Phillips 66-owned terminal in the Port of Los Angeles as a staging area for wind turbines headed to the Pacific Ocean at offshore wind farms.
“It’s just a straight shot to move them beyond the breakwaters,” said Rogers, who wasn’t aware of any plans mentioned by the company.
Oil companies have been exploring new ways to harvest energy through offshore wind turbines built in the world’s oceans for years.
For instance, British oil giant Shell plc has a business unit, Shell WindEnergy, with an interest in nine operating wind projects in the world with several offshore projects under construction, including off the coast of New York and New Jersey. That project alone could power nearly 700,000 homes, according to Shell.
Such European energy companies as Shell, Vestas Wind Systems and Equinor are leading the world in offshore wind farm construction. Over the past year, the Biden administration has played catchup with the push to fund billions of dollars for offshore wind projects through his “Investing in America” agenda.
Besides having a platform to launch offshore wind farms from, building a mix of retail and housing on the land is another consideration, he said.
“The tea leaves haven’t been settled yet as to what is being discussed there,” said Rogers. “There’s any number of avenues it could go. It could turn the area into homes, like what happened in Huntington Beach when their oil fields went away. Now they’re million-dollar homes.”
Huntington Beach saw a similar evolution from an oil boom that started in the early 1920s to beachfront housing by the 1980s after Standard Oil and others withdrew their derricks and plugged oil wells along the coastline. The city in September approved a housing and hotel project for a 29-acre site known locally as the Magnolia Tank Farm, a site that processed oil in giant storage tanks similar to those seen in Wilmington.
Rogers, a Santa Ana resident, was appointed this week to a six-member Independent Consumer Fuels Advisory Committee as part of new legislation signed into law on Oct. 14 by Gov. Gavin Newsom. The law, called Assembly Bill X2-1, requires oil refiners to maintain a minimum inventory of fuel to avoid supply shortages that could cause price spikes at the pump.
Rogers also suggested the industrial land could become home to data centers and other commercial developments and even affordable housing.
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David Campbell, secretary-treasurer of USW Local 675, said that the closure of the refinery will eliminate about 380 of the 4,500 union jobs working in the energy industry in the region. He worries the high-paying jobs will make home buying in the area out of reach for his membership if Phillips 66 opts to pursue home and retail development for the land once it opens up next year.
“Phillips sees more value in the future by developing the land than refining oil,” Campbell said.
Houston-based Phillips 66 hired Catellus Development Corp. in Oakland and Deca Cos. in Sacramento to help figure out its next steps.
In an emailed statement, Phillips 66 spokeswoman Nancy Perez said that Catellus and Deca bring strong track records of “solving complex redevelopment challenges.”
“We intend to redevelop the property in a manner that benefits the regional economy,” Perez said. “We will have more information to share when that time comes. In the meantime, we intend to work closely with our redevelopment firms and the local community to determine the best future use of this land that is appropriate given the site’s history.”
Spokespersons with Catellus and Deca declined to comment on the possibilities for the site, or discuss examples of similar projects in their portfolio of projects.
Both firms have a deep bench of experience in redevelopment.
Deca developed the world’s largest electric vehicle charging and maintenance facility near San Francisco’s port, and an 850,000-square-foot mixed-use development with retail and industrial space in the Inland Empire’s Perris area.
Catellus, notably, worked on housing development on a 200-acre site in the Bay Area that was once the former Pacific Refinery Co. That refinery was built in 1966 and produced 55,000 barrels of oil daily and stored other hazardous substances until it was decommissioned in the mid-1990s and later shutdown.