Communicator

South Bay History: Phillips 66 oil refinery has been a Wilmington fixture since 1919 @Daily Breeze

Phillips 66 has announced it will cease operations at its Wilmington refinery, located just outside Los Angeles, by the fourth quarter of 2025. Wilmington is a facility part of the Los Angeles refinery, with a processing capacity of 139,000 barrels of crude oil per day and has long been a major supplier of gasoline, diesel, and jet fuel for Southern California. The company will work with the state to ensure continued fuel supply, including exploring alternative sources within its network and increasing production of renewable fuels from its other facilities

The closure comes as California tightens its regulatory environment for refiners. Recent legislation, including AB 1 X2 signed by Governor Gavin Newsom, grants the California Energy Commission expanded oversight of refinery operations and requires companies to maintain minimum gasoline inventories and develop contingency plans to prevent supply disruptions

These measures are intended to stabilize fuel markets and prevent price spikes but have added to the operational complexity and cost for in-state refiners.

California’s unique fuel requirements further complicate the situation. Only specialized gasoline formulations, known as California Reformulated Blendstocks for Oxygenate Blending (CARBOB), can legally be sold in the state. These stringent standards, combined with the state’s Low Carbon Fuel Standard and aggressive emissions reduction targets, have made it increasingly difficult for traditional refineries to remain profitable

The state’s geographic isolation from other major refining hubs and lack of interstate pipelines means California must produce most of its own motor fuels or import them from overseas, increasing vulnerability to supply disruptions.

The Wilmington refinery closure is part of a broader trend, as several California refineries have either shut down or converted to renewable fuel production in recent years. Industry analysts warn that continued regulatory pressure and declining demand for conventional fuels could lead to further closures, potentially impacting fuel prices and supply stability across the region.

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