If you’ve driven down the 405 or the 110 near the harbor lately, you’ve probably seen the massive industrial skyline of the Phillips 66 Los Angeles refinery. It’s been a fixture of the South Bay landscape for over a century. Honestly, most people just see the steam and the flares and think of it as part of the background noise of LA life.
But everything changed in late 2024.
The news hit like a ton of bricks: Phillips 66 is shutting it all down. By the end of 2025, this massive complex—which is basically the heart of the fuel supply for Southern California—will stop processing crude oil. We’re talking about a site that handles roughly 8% of the state’s total refining capacity.
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It’s a big deal.
The Reality Behind the Phillips 66 Los Angeles Refinery Closure
People are asking if this was a sudden "rage quit" because of California’s strict regulations. You’ve probably seen the headlines about Governor Newsom’s new laws on refinery inventories. While the timing is suspicious—the announcement came just days after some of that legislation was signed—the company says it's not just about one law.
Basically, the Phillips 66 Los Angeles refinery was becoming a "low-margin" asset. In plain English? It wasn't making enough money compared to their other plants.
Why now?
The West Coast margins have been getting squeezed hard. In 2024, the company reported significant losses on its LA operations. Think about it: you’ve got two separate facilities—one in Wilmington and one in Carson—linked by a five-mile pipeline. Maintaining that 100-year-old infrastructure while meeting some of the toughest environmental standards on the planet is expensive.
- Wilmington Plant: This is the "back end" where they upgrade intermediate products into finished gasoline and diesel.
- Carson Plant: This is the "front end" where the actual crude oil distillation happens.
It’s a complex dance that involves 600 employees and 300 contractors. For those workers, this isn't just a corporate strategy shift; it’s a life-altering event. Many of these folks make upwards of $150,000 with overtime. Finding a comparable blue-collar job in California that pays that well? Good luck.
The "Lake of Oil" and the Cleanup Nightmare
One of the things nobody really talks about is what's underneath the ground. You don't run a refinery for 100 years without leaving a mark.
Recent reports have surfaced about a literal "lake" of petroleum products floating on the groundwater under the site. We are talking millions of gallons of "impacted groundwater" and light non-aqueous phase liquid. Phillips 66 has already removed a staggering amount of this stuff, but the cleanup is nowhere near done.
Community advocates, especially groups like Communities for a Better Environment (CBE), are worried. They've seen what happens when big industrial players leave town. Remember the Exide battery plant in Vernon? Taxpayers ended up holding the bag for the cleanup. There is a lot of fear in Wilmington and Carson that Phillips 66 might try to offload the land to developers before the soil is truly safe.
The Developer's Dream
Speaking of developers, the 650-acre site is prime real estate. It's right near the Port of Los Angeles.
The company is already talking to land development firms like Catellus Development Corporation. What comes next? It probably won't be a park. You’re likely looking at massive warehouses for the logistics industry. While that might bring some jobs, it also brings a whole new kind of pollution: thousands of diesel trucks idling in neighborhoods that already have some of the highest asthma rates in the state.
Will Your Gas Prices Explode?
This is the question everyone asks at the dinner table. If we lose 139,000 barrels of refining capacity a day, does the price at the pump go to $8?
Honestly, it’s complicated.
California is an "energy island." We don't have pipelines bringing in gasoline from Texas or the Midwest. We have to make it here or bring it in by ship. When the Phillips 66 Los Angeles refinery stops making gas, that supply has to come from somewhere else. Phillips says they aren't "leaving" California—they'll just import the fuel from their Ferndale refinery in Washington or other global sources.
But importing costs more than refining locally.
Some analysts, like those at the California Globe, have floated pretty scary numbers—suggesting prices could jump by 30% or more. Others think the market will "absorb" it. But let’s be real: less supply usually means higher prices. If another refinery has an unplanned breakdown once Phillips 66 is offline, we don’t have much of a safety net left.
Transition or Total Shutdown?
You might have heard that Phillips 66 converted their Rodeo refinery near San Francisco into a renewable diesel plant. People wondered if they’d do the same for LA.
The answer seems to be a solid "no."
Unlike the Bay Area facility, the LA site is being looked at for "alternative uses," which is corporate-speak for "selling it for something else." The state is pushing hard for a zero-emission future, and Phillips 66 seems to have decided that the LA market for traditional petroleum just doesn't fit their long-term math anymore.
It’s a bit of a "bumpy" energy transition, as some experts call it. We want cleaner air, and the people living in Wilmington definitely deserve to breathe without worrying about benzene levels. But we also still drive gas-powered cars. We’re in this weird middle ground where the old infrastructure is dying before the new stuff is fully ready to take the load.
What You Should Watch For
If you live in the South Bay or rely on California's fuel market, keep your eyes on a few specific things over the next 18 months:
- The Layoff Timeline: Most of the job cuts will hit in the fourth quarter of 2025. Watch how the local economy in Carson and Wilmington reacts.
- The Environmental Impact Report (EIR): The City of Los Angeles is starting to look at what the "decommissioning" process actually looks like. This will be the battleground for how much cleanup Phillips 66 is forced to do.
- Import Hub Shift: Watch the Port of Los Angeles. If we see a massive uptick in fuel tankers, it's a sign that we’ve officially shifted from a producing state to an importing state.
- Gas Price Spikes: Keep an eye on the "West Coast Premium." If our prices start decoupling even further from the national average, you’ll know the loss of this refinery is the culprit.
The era of the Phillips 66 Los Angeles refinery is coming to an end. It's the end of an industrial chapter that defined the South Bay for a century. Whether that leads to a cleaner, greener future or just higher bills and empty lots remains to be seen.
For now, the best thing you can do is stay informed about the local zoning meetings regarding the site’s future. Those 650 acres will determine the health and economy of the harbor area for the next fifty years. Don't let the transition happen in the dark. Residents should actively participate in the public comment periods for the Notice of Preparation (NOP) regarding the site's redevelopment to ensure community needs—and not just developer profits—are prioritized.
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