California, August 25, 2025
News Summary
California is set to lose two major oil refineries, Phillips 66 and Valero, which are expected to shut down by 2026. This closure will remove around 20% of the state’s refining capacity, raising concerns about job losses and rising gas prices. The Phillips 66 refinery in Wilmington will close by October 2025, while Valero’s facility in Benicia will cease operations shortly after. The expected shutdowns are attributed to strict regulatory pressures and may lead to increased reliance on imported fuel, exacerbating economic and environmental challenges in the state.
California is set to face significant changes in its oil refining landscape as two major refineries, Phillips 66 and Valero, plan to shut down their operations by the year 2026. The closures are expected to remove approximately 284,000 barrels-per-day of refining capacity from the state, which represents nearly 20% of California’s total refining capacity.
The Phillips 66 refinery in Wilmington is scheduled to close by October 2025, while Valero’s Benicia facility is set to cease operations shortly after. Concerns are mounting among state legislators and local communities regarding the potential impact of these closures, particularly regarding job losses and rising gas prices. Assemblymember Mike A. Gipson highlighted the economic risks to his district, noting that many employees affected by the refinery closures live in the area.
The decision to close these refineries comes amid ongoing regulatory pressure and scrutiny in California. The Valero facility closure is partially attributed to years of rigorous regulatory enforcement, culminating in an $82 million fine for air quality violations in 2024. Phillips 66 has also cited stringent environmental regulations as a critical factor for its closure decision.
Currently, California processes about 24% of the crude oil it consumes, which amounts to around 13.1 million gallons daily. The state has the highest gasoline prices in the nation, with an average cost of approximately $4.85 per gallon, significantly higher than the $3.16 national average. Experts are warning that these closures will likely lead to further spikes in gas prices, with projections indicating increases of less than $1 to more severe surges that might push prices above $8 per gallon by late 2026.
The shutdowns of these refineries may compel California to rely more heavily on imported fuel, raising the costs associated with shipping as well as emissions produced by tanker vessels. Each refinery closure poses the threat of job losses, with Phillips 66 employing around 900 workers and Valero providing jobs for about 400 employees. The economic implications of these layoffs are significant for communities that depend on these jobs, potentially leading to financial instability.
As these changes unfold, California legislators are scrutinizing the efficiency and effectiveness of state regulatory agencies in managing the oil and gas sector, particularly against the backdrop of rising fuel costs. The anticipated closures are expected to worsen existing economic and environmental challenges in the state, as California may struggle with an increased reliance on non-local energy supplies that may not align with its strict environmental standards.
The California Air Resources Board has come under criticism for not actively evaluating the impact of its regulations on consumers and drivers. Future discussions are likely to include potential redevelopment plans for the closed refinery sites, aiming at alternative industrial uses; however, these plans may also encounter resistance from community members regarding health and environmental concerns.
FAQ
What are the names of the refineries set to shut down in California?
The Phillips 66 refinery and the Valero refinery are scheduled to close by 2026.
How much refining capacity will be lost due to these closures?
The closures will eliminate approximately 284,000 barrels-per-day of refining capacity, nearly 20% of California’s total capacity.
How will these closures impact gas prices in California?
Experts warn that the closures could lead to gas price spikes, ranging from modest increases to prices potentially exceeding $8 per gallon by late 2026.
What measures are being discussed to address the situation?
Discussions are anticipated regarding potential redevelopment of the closed refinery sites for alternative industrial uses, though these may face community opposition.
Key Features of Refinery Closures
| Feature | Details |
|---|---|
| Refineries Closing | Phillips 66 (Wilmington) and Valero (Benicia) |
| Closure Dates | Phillips 66 by October 2025, Valero by 2026 |
| Refining Capacity Lost | 284,000 barrels-per-day |
| Job Losses | Approximately 1,300 jobs (900 from Phillips 66, 400 from Valero) |
| Current Gas Price in California | $4.85 per gallon |
| Projected Gas Price Spike | Potentially exceeding $8 per gallon by late 2026 |
| Regulatory Issues | Years of fines and strict environmental regulations |
Deeper Dive: News & Info About This Topic
- LAist: Phillips 66 Shutting LA Refineries
- Wikipedia: Refinery
- Energy at Haas: California’s Refinery Closure Drama
- Google Search: California oil refinery closures
- KCRA: California Lawmakers and Regulators Clash over Oil Refineries
- Encyclopedia Britannica: Oil Refining
- MoneyWise: Gas Could Spike to $8 per Gallon
- Google News: California gas prices
- KMPH: Why Are All the Oil Refineries Leaving California?
- San Diego Union Tribune: A Do-Over for Newsom
Author: STAFF HERE BEVERLY HILLS WRITER
The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
