Phillips 66 Powers Down Its 139,000-b/d Los Angeles Refinery, Ending a Century of Wilmington Refining

The Phillips 66 Los Angeles Refinery has gone dark. In the fourth quarter of 2025, the company completed the phased, permanent shutdown of its 139,000-barrel-per-day operation straddling Wilmington and Carson, ending crude processing at a site that has refined oil in the Los Angeles harbor district since 1919. With the last barrel run, California lost about 8 percent of its refining capacity, and roughly 600 employees plus 300 contractors lost the plant that anchored their working lives.

Phillips 66 gave notice of the closure on October 16, 2024, and held to its timeline. The company said crude refining would cease in Q4 2025, and by December the plant had refined its final barrel. This was not a sudden death. It was a slow, scheduled one, played out over more than a year while the surrounding community argued about what came next.

What the shutdown actually removes

The headline number is 139,000 b/d. Put against the U.S. Energy Information Administration's accounting, that is about 8 percent of California's refining capacity, roughly 5 percent of West Coast capacity, and less than 1 percent of national capacity. Small on a national ledger, large inside a state that runs its own isolated fuel island with almost no pipeline connection to the rest of the country.

The Los Angeles Refinery was never a single building. It was two linked plants: the Wilmington side, opened by Union Oil in 1919, and the Carson side, built in 1923. They processed crude together as one complex under a corporate lineage that ran through Tosco, then Phillips Petroleum's 2001 purchase, the 2002 Conoco merger, and the 2012 spin-off that created Phillips 66. Take out this complex and you take out a piece of infrastructure older than commercial aviation.

The timing matters for the wider market. Phillips 66's exit did not happen in isolation. Valero has moved to shut its Benicia refinery, and analysts tracking the two closures together put the combined loss at roughly 290,000 b/d, close to 18 percent of California's total refining infrastructure. When two of a small pool of in-state refiners head for the door within the same window, the margin for supply shocks gets thin.

Why Phillips 66 walked

Chairman and CEO Mark Lashier framed the decision around economics rather than any single law. In the company's own notice, he called the plant's long-term sustainability uncertain and affected by market dynamics. He later said the closure reflected an expectation that the refining business in California would become increasingly challenging, not a direct reaction to policy.

"We understand this decision has an impact on our employees, contractors and the broader community. We will work to help and support them through this transition."

The context around that statement is hard to ignore. The announcement landed shortly after Governor Gavin Newsom signed ABX2-1, a law that empowers California regulators to set and adjust minimum petroleum product inventory levels for in-state refiners. The EIA's own analysis pairs the closure and the law as two threads of the same story: a fuel market under pressure from tightening rules, shrinking demand forecasts, and the high cost of operating aging assets in the most regulated refining environment in the country. Phillips 66 will keep serving California through alternative sourcing and its Rodeo renewable energy complex near San Francisco, and it has floated using the Wilmington site's existing infrastructure to import finished fuels after refining stops.

The workers and the layoff math

The plant employed about 600 people and used another 300 contractors. Those jobs did not vanish all at once. Phillips 66 filed WARN notices in stages. One notice covered 155 employees terminated in December 2025 as refining wound down. A separate notice, filed in early February, covered 122 more employees to be cut effective April 3, 2026, at the Carson and Wilmington facilities. That totals 277 identified positions across the two rounds, with the balance of the workforce facing separation as decommissioning proceeds.

These are high-wage, union-heavy operating and maintenance jobs, the kind that do not have an obvious replacement in the local economy. Phillips 66 pledged transition support, but a decommissioned refinery does not need a fraction of the crews that ran it hot.

Who pays for the cleanup

The question hanging over Wilmington is not whether the plant is closing. It is what the company leaves behind. Reporting from Inside Climate News found that as the shutdown neared, residents living next to the fenceline still did not know whether Phillips 66 would fully pay to clean up a century of accumulated contamination. A refinery site that has run since 1919 carries soil and groundwater legacy that does not disappear when the units cool.

Phillips 66 has engaged developers Catellus Development Corporation and Deca Companies to study redevelopment of its roughly 650 acres in Wilmington and Carson. Plans floated for the Wilmington parcel run to a town center with retail and dining, open space, and millions of square feet of industrial development. That is the optimistic version. The version community groups worry about is a long, contested remediation where the timeline and the bill are unsettled, and where the people who lived beside the flare stacks for generations are left waiting on assurances.

What it means for California drivers

California prices its own gasoline on a knife's edge. The state burns a special low-emission blend that few refineries outside California make, its pipeline links to other regions are limited, and there is little slack in the system when a plant goes down. Every barrel of lost in-state capacity raises the odds that a routine maintenance turnaround or an unplanned outage somewhere else translates into a price spike at the pump.

Removing 139,000 b/d does not, by itself, empty the tanks. Imports, the Rodeo complex, and the remaining refiners can cover demand under normal conditions. The concern is what happens under abnormal ones. Fewer plants means fewer shock absorbers. Pair the Phillips 66 exit with Valero's Benicia plan and the state is betting that falling gasoline demand outpaces falling supply. If that bet is off in any given year, drivers feel it first.

For now, the harbor district wakes up to a quiet skyline. A refinery that outlasted the Model T, three name changes, and a hundred years of California history has run its last barrel. The steel will come down, the arguments over the dirt beneath it will not, and the state's fuel math just got a little tighter.