Another refinery shuts down in California. What happens to gas prices?

Closure of the Phillips 66 refinery complex in the Wilmington area next year will likely mean higher gas prices for motorists, analysts say.

The oil company, which sells gas under the 76 brand, says ...

Sections Show Search Advertisement Climate & Environment Another refinery shuts down in California.

Phillips 66 will shutter its Wilmington-area oil refinery complex late next year.

The refinery, built in 1919, produces gas, diesel and aviation fuels.

(Carolyn Cole / Los Angeles Times) By Russ Mitchell Staff Writer Oct.

18, 2024 3 AM PT 202 Share via Close extra sharing options Email Facebook X LinkedIn Threads Reddit WhatsApp Copy Link URL Copied!

Set us as preferred California’s attempt to manage a smooth transition away from gasoline just got roughed up with this week’s decision by Phillips 66 to shutter its refinery in Wilmington next year, wiping out more than 8% of the state’s crude oil processing capacity.

The closure is likely to increase California’s already high prices at the gas pump, given that much of the replacement gasoline will be shipped in by ocean vessel, analysts say.

The price issue will be “most worrisome if we have some kind of disruption in the market” and the Phillips refinery’s not there to help with resupply, said Severin Borenstein, faculty director at UC Berkeley’s Energy Institute.

The planned shutdown, announced by Phillips 66 on Wednesday, came just days after Gov.

Gavin Newsom signed a bill that could force the state’s refineries to store extra gasoline, a move intended to minimize price spikes, such as those that occurred in late 2022 and 2023.

A Phillips 66 spokesman said the decision is not related to that bill, but in a press release the company called “the long term sustainability” of the refinery “uncertain.” He told The Times that “the refinery had lower profitability compared to other assets in our portfolio.” State Sen.

Steve Bradford (D-Gardena), who represents the Wilmington-area district where the refinery is located, sees the planned closure as the culmination of “a death of 1,000 cuts” from California energy policy “that led us to where Phillips saw no real future.” Not only will gasoline prices rise, he said, “but 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.” He laments the loss of up to 600 direct jobs at the refinery, 300 contractors, and an unknown number of ancillary jobs.

The Phillips refinery is split into two sites, one section in Wilmington and the other in nearby Carson, linked by pipeline.

“I feel for the men and women who live around that area who have depended on these jobs for decades.

The refinery was there first, not the homes,” he said.