California, August 25, 2025
News Summary
California’s oil refining sector is poised for significant change as Phillips 66’s Wilmington facility and Valero’s Benicia refinery prepare to close by 2026. The closures combined will eliminate 284,000 barrels-per-day of capacity, impacting around 1,300 jobs. Local legislators express concerns about economic repercussions, including rising gas prices and increased reliance on imports. The shutdowns highlight ongoing regulatory challenges within California’s energy landscape, potentially driving gas prices beyond $8 per gallon by late 2026.
California is set to experience significant changes in its oil refining landscape as two major refineries—Phillips 66’s Wilmington facility and Valero’s Benicia refinery—are scheduled to shut down by 2026. The Phillips 66 facility is expected to close by October 2025, while the Valero refinery will cease operations in the following year. These closures combined will eliminate approximately 284,000 barrels-per-day of refining capacity, accounting for nearly 20% of California’s total capacity.
The decision to close these refineries has raised concerns among local legislators, particularly with Assemblymember Mike A. Gipson emphasizing the potential job losses and their broader economic impacts. Many of the affected workers reside in Gipson’s district, which may face increased economic challenges due to impending layoffs. The Phillips 66 facility supports around 900 workers, while Valero employs approximately 400.
Both refinery closures are influenced by the increasing regulatory pressures and compliance costs. The Valero refinery, in particular, has faced several significant fines for air quality violations, including an $82 million penalty in 2024. Phillips 66 has cited strict environmental regulations as a significant factor leading to its decision to close. These regulations have fueled concerns over the future of California’s energy landscape, typically characterized by high gas prices averaging around $4.85 per gallon, significantly higher than the national average of $3.16.
As California currently processes about 24% of its crude oil requirements, the closures of these refineries may compel the state to rely more on imported fuel. This shift is likely to increase shipping costs and emissions associated with tanker vessels, further complicating California’s existing environmental challenges. Fuel prices are expected to see volatility, with estimates predicting potential increases ranging from less than $1 to exceeding $8 per gallon by late 2026 following the closures.
Experts warn that the closures will exacerbate economic and environmental challenges, including the reliance on non-local energy supplies that may not adhere to California’s stringent environmental standards. The California Air Resources Board has been criticized for failing to assess the impact of its regulations on consumers and drivers, which has fueled ongoing debates among legislators about the management of the oil and gas sector in the state.
Aside from the concerns regarding fuel supply and prices, there have also been discussions around the potential future use of the closed refinery sites. While there are suggestions for alternative industrial developments, these proposals may face community opposition due to health and environmental concerns.
As California braces for these shutdowns, the combination of job losses, economic uncertainty, higher gas prices, and increased dependence on imported fuels paints a complex picture for the state’s energy future.
FAQs
When are the Phillips 66 and Valero refineries scheduled to close?
The Phillips 66 refinery is scheduled to close by October 2025, while the Valero refinery will close in 2026.
How many jobs will be affected by the shutdown of these refineries?
The Phillips 66 facility supports approximately 900 workers, and Valero employs about 400 workers, totaling around 1,300 jobs affected by the closures.
What price changes are anticipated for gas following the refinery closures?
Experts predict gas price spikes could range from modest increases of less than $1 to potentially exceeding $8 per gallon by late 2026, due to reduced local refining capacity.
What are the environmental implications of these refinery closures?
The closures may necessitate increased reliance on imported fuels, leading to higher emissions from shipping and complicating California’s environmental goals.
Chart of Key Features
| Refinery | Closure Date | Jobs Lost | Barrels per Day Capacity Lost |
|---|---|---|---|
| Phillips 66, Wilmington | October 2025 | 900 | Approximately 240,000 |
| Valero, Benicia | 2026 | 400 | Approximately 44,000 |
Deeper Dive: News & Info About This Topic
- LAist: Phillips 66 Shutting LA Refineries
- Wikipedia: California Economy
- Energy at Haas: California’s Refinery Closure Drama
- Google Search: California refinery closures
- KCRA: California Lawmakers, Regulators Clash Over Oil Refineries
- Encyclopedia Britannica: Oil Refinery
- Moneywise: Gas Could Spike to $8 Per Gallon
- Google News: California gas prices
- KMPH: Why Are Oil Refineries Leaving California?
- Google Scholar: California refinery shutdown
Author: STAFF HERE HOLLYWOOD
The Hollywood Staff Writer represents the experienced team at HEREHollywood.com, your go-to source for actionable local news and information in Hollywood, 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 Hollywood Bowl summer concerts, the Hollywood Christmas Parade, film premieres at TCL Chinese Theatre, and festivals at the Magic Castle. Our coverage extends to key organizations like the Hollywood Chamber of Commerce and Visit Hollywood, plus leading businesses in entertainment, dining, and tourism that define the local economy. As part of the broader HERE network, including HERELosAngeles.com, HEREBeverlyHills.com, HEREAnaheim.com, and HEREHuntingtonBeach.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
