Phillips 66 has announced that it will begin laying off workers starting in December 2025 as it prepares to shut down its Los Angeles-area refinery operations by October of the same year. This refinery, which currently processes approximately 139,000 barrels of crude oil daily, has been a vital part of the region’s energy infrastructure and economy. The closure and workforce reductions represent a significant shift for the company, the local labor market, and the state’s refining landscape.
The Scope and Impact of the Closure
The Phillips 66 refinery in Los Angeles employs around 600 full-time workers along with 300 contractors, many of whom are unionized under the United Steelworkers Union. The facility has been operational for decades, playing a critical role in producing gasoline and other petroleum products to meet Southern California’s demand.
While Phillips 66 has indicated that some employees will be reassigned to its nearby Los Angeles marine oil terminal, which is integral to the company’s logistics and alternative energy initiatives, the majority of refinery workers will face layoffs. The decision comes amid mounting operational challenges, shifting market dynamics, and evolving regulatory requirements.
Broader Trends Affecting California Refineries
This closure is part of a broader pattern impacting refineries across California and the United States. Aging facilities face increasing economic pressures driven by stringent environmental regulations, rising costs of compliance, and shifting energy consumption patterns favoring renewable sources.
California has set aggressive goals to reduce greenhouse gas emissions and transition to cleaner energy, including a planned ban on the sale of new gasoline-powered cars by 2035. These policies create a challenging environment for traditional refineries, which must weigh the costs of upgrading plants to meet new standards against dwindling demand for fossil fuels.
The shutdown of Phillips 66’s Los Angeles refinery follows closely on the heels of Valero Energy’s announcement to cease operations at its Benicia refinery. Combined, these closures represent roughly 20% of California’s gasoline refining capacity, raising concerns among state officials about potential impacts on fuel supply stability and prices.
Economic and Community Concerns
The loss of hundreds of refinery jobs has triggered alarm among community leaders, labor unions, and local politicians. The refinery has long been a major employer in the region, providing stable, well-paying jobs that support families and contribute to the local economy.
United Steelworkers representatives have called for comprehensive support measures, including job placement assistance, retraining programs, and economic development initiatives to help displaced workers transition to new employment opportunities. “We need a just transition that protects workers and ensures they are not left behind as the energy landscape changes,” said union spokesperson Maria Torres.
City and county officials have echoed these sentiments, emphasizing the importance of preparing the workforce for a diversified economy. Local nonprofit organizations and workforce development boards are collaborating with Phillips 66 and government agencies to facilitate training in emerging sectors such as renewable energy, advanced manufacturing, and logistics.
Environmental Perspectives and Policy Implications
Environmental groups have generally welcomed the refinery closures as positive steps toward reducing air pollution and lowering greenhouse gas emissions in California. The state’s Clean Air Act mandates and climate initiatives aim to improve public health by cutting down on pollutants traditionally associated with fossil fuel processing.
Advocates see the transition away from oil refining as essential to meeting California’s carbon neutrality goals by 2045. “Closing old, polluting refineries is a necessary part of the state’s clean energy future,” said Sierra Club California director Alison Greene. “However, it must be balanced with strong support for workers and communities impacted by these changes.”
Phillips 66’s Strategic Shift
Phillips 66 has signaled its intent to pivot towards alternative energy and logistics. The company’s Los Angeles marine oil terminal is expected to play a growing role in its operations, including handling imports of refined products and facilitating new ventures in biofuels and renewable energy logistics.
Industry analysts note that such strategic shifts are increasingly common among traditional oil and gas companies adapting to a rapidly changing energy market. Investments in infrastructure that support cleaner fuels and more sustainable operations will be key to maintaining competitiveness.
Challenges and Future Outlook
Despite these plans, the closure of major refineries in California presents challenges for the state’s energy security. California currently relies heavily on in-state refining capacity to supply its vast population, and disruptions could increase dependence on imports from other states or countries, potentially affecting prices and supply resilience.
Analysts caution that without substantial investments in modernization or conversion to biofuel processing, other aging refineries in environmentally stringent regions may face similar closures in the coming years.
Conclusion
Phillips 66’s decision to close its Los Angeles refinery and lay off hundreds of workers underscores the profound changes reshaping California’s energy landscape. While the shift aligns with environmental goals and industry trends, it also highlights the urgent need for robust support systems for workers and communities affected by the transition.
As the state and industry navigate these changes, collaboration among government, labor, environmental groups, and companies will be essential to ensure a sustainable and equitable energy future.