California, August 25, 2025
News Summary
California faces a significant reduction in oil refining capacity with the planned closures of Phillips 66’s Wilmington facility and Valero’s Benicia refinery by 2026. These shutdowns will eliminate about 284,000 barrels-per-day, affecting local jobs and potentially raising gas prices. With a heavy reliance on imported fuel expected, these changes raise concerns over energy sustainability and economic impacts on affected communities.
California is set to experience significant changes in its oil refining landscape as two major refineries—the Phillips 66 facility in Wilmington and the Valero refinery in Benicia—are scheduled to shut down by 2026. These closures are expected to eliminate about 284,000 barrels-per-day of refining capacity, which represents nearly 20% of the state’s total capacity.
Phillips 66 plans to close its Wilmington facility by October 2025, while the Valero refinery’s shutdown is influenced by ongoing regulatory pressure and hefty fines associated with air quality violations, including an $82 million penalty in 2024. The decision to close is also prompted by stringent environmental regulations that Phillips 66 has attributed to its need to cease operations.
The consequences of these closures are extensive, particularly concerning job losses and economic repercussions for local communities. Assemblymember Mike A. Gipson highlighted these concerns, noting that many workers impacted by the layoffs reside in his district. Phillips 66 employs approximately 900 workers, while Valero supports around 400 employees, and local economies that rely on these jobs may face significant challenges as a result.
As of now, California processes about 24% of its crude oil needs. However, the state consumes roughly 13.1 million gallons of gasoline daily, leading to concerns about reliance on imported fuel. The current average gas price in California stands at approximately $4.85 per gallon, making it the highest in the nation compared to the $3.16 national average. Experts predict that reduced local refining capacity could trigger further increases in gas prices, with projections ranging from modest increases of less than $1 to spikes potentially exceeding $8 per gallon by late 2026.
The impending closures raise questions about California’s long-term energy sustainability. With reduced refining capacity, the state may rely significantly on imported fuel, increasing shipping costs and emissions from tanker vessels. Furthermore, California’s legislators are scrutinizing the management of state regulatory agencies concerning the oil and gas sector amid the rising fuel costs.
The California Air Resources Board has come under criticism for not actively assessing the impact of its regulations on consumers and drivers. This oversight could lead to greater fuel price volatility and supply disruptions in the state, intensifying the existing economic and environmental challenges. The state may also face elevated reliance on non-local energy sources that do not align with California’s environmental standards.
Discussions are underway regarding potential alternative uses for the closed refinery sites, which could lead to new industrial developments. However, any such plans may encounter community opposition due to health concerns stemming from previous industrial activities.
As California prepares for these changes, the future of its energy landscape and the economic stability of affected workers and communities hang in the balance, raising critical concerns about the path forward for the state’s refining capacity.
FAQ
What two refineries are closing in California?
Phillips 66 and Valero refineries are set to close by 2026, with Phillips 66 shutting its Wilmington facility by October 2025 and Valero closing its facility in Benicia.
How much refining capacity will be lost due to these closures?
The closures will eliminate approximately 284,000 barrels-per-day of refining capacity, accounting for about 20% of California’s total refining capacity.
What impact will these closures have on gas prices?
Experts warn that the closure of local refineries could lead to gas price spikes, with predictions ranging from less than $1 to over $8 per gallon by late 2026.
What are the potential job losses from the refinery closures?
The closures may result in hundreds of job losses, with Phillips 66 employing around 900 workers and Valero supporting about 400 employees.
Why are the refineries shutting down?
The closures are attributed to strict environmental regulations and a history of regulatory pressure, including significant air quality violation fines.
Key Features of Refinery Closures
| Feature | Details |
|---|---|
| Refineries Closing | Phillips 66 Wilmington, Valero Benicia |
| Closure Dates | Phillips 66 by October 2025, Valero by 2026 |
| Refining Capacity Lost | 284,000 barrels-per-day |
| Job Losses | ~1,300 jobs combined |
| Current Gas Prices | California: $4.85, National Average: $3.16 |
| Predicted Gas Price Increase | Possible spikes up to $8 by late 2026 |
Deeper Dive: News & Info About This Topic
- LAist: Phillips 66 Shutting LA Refineries
- Wikipedia: Oil Refining
- Energy at Haas: California’s Refinery Closure Drama
- Google Search: California refinery closures
- KCRA: California Lawmakers, Regulators Clash
- Google Scholar: California refinery regulations
- Moneywise: Gas Could Spike to $8 Per Gallon
- Encyclopedia Britannica: Oil Refinery
- KMPH: Why Are Oil Refineries Leaving California?
- Google News: California gas prices
Author: STAFF HERE LOS ANGELES WRITER
LOS ANGELES STAFF WRITER The LOS ANGELES STAFF WRITER represents the experienced team at HERELosAngeles.com, your go-to source for actionable local news and information in Los Angeles, 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 LA Auto Show, Hollywood Film Awards, and the Los Angeles Marathon. Our coverage extends to key organizations like the Los Angeles Area Chamber of Commerce and the Los Angeles Tourism & Convention Board, plus leading businesses in entertainment and technology that power the local economy such as Warner Bros. and SpaceX. As part of the broader HERE network, including HEREAnaheim.com, HERECostaMesa.com, HEREHuntingtonBeach.com, and HERESantaAna.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
