California, August 25, 2025
News Summary
California’s oil refining sector faces a major shift as Phillips 66 and Valero announce refinery closures by 2026, potentially affecting gas prices and job security. The loss of 284,000 barrels-per-day capacity raises concerns about increased fuel costs and job losses for approximately 1,300 workers. The state may become more reliant on imported fuel, complicating its energy landscape amidst stringent environmental regulations.
California is facing significant changes in its oil refining landscape as two major refineries are slated to shut down by 2026, raising serious questions about future gas prices and job security. Phillips 66 announced the closure of its Wilmington facility by October 2025, while the Valero refinery in Benicia is also scheduled to cease operations within the same timeframe. Collectively, these closures are expected to eliminate approximately 284,000 barrels-per-day of refining capacity, which constitutes nearly 20% of California’s total refining capabilities.
Assemblymember Mike A. Gipson has voiced strong concerns regarding the potential job losses that these shutdowns will cause, especially since many of the affected workers reside in his district. The closure of Valero is linked to continuous regulatory pressure, which has included substantial fines for air quality violations, with a notable penalty of $82 million imposed in 2024. In contrast, Phillips 66 cited stringent environmental regulations as a critical factor in its decision to halt operations.
Currently, California meets about 24% of its crude oil requirements through its local refineries, while the state consumes approximately 13.1 million gallons of gasoline daily. It boasts the highest gas prices in the nation, averaging around $4.85 per gallon compared to the national average of $3.16. Experts have expressed concerns that the reduced refining capacity may lead to increased gas prices, with projections indicating possible spikes ranging from modest increases to hitting over $8 per gallon by late 2026.
As these refineries shut down, California could face a greater reliance on imported fuel, subsequently raising shipping costs and the emissions produced by tanker vessels. Each refinery closure could lead to the loss of hundreds of jobs, with Phillips 66 employing around 900 workers and Valero providing jobs for about 400 employees. The economic ramifications for communities that rely on these jobs could be severe, particularly if laid-off workers struggle to find new employment opportunities.
In light of these developments, California lawmakers are questioning whether the state’s regulatory agencies are effectively managing the oil and gas sector, especially amid rising fuel costs. The impending closures are anticipated to worsen existing economic and environmental challenges, including increased dependence on non-local energy supplies that may not align with California’s strict environmental standards.
The state may also face heightened volatility in fuel prices and supply disruptions, stimulating concerns about the long-term sustainability of its energy infrastructure. Meanwhile, the California Air Resources Board has been criticized for not fully assessing how its regulations impact consumers and drivers. In response to the refinery closures, there are discussions regarding plans to potentially repurpose the sites for alternative industrial uses, although these proposals may face opposition from local communities concerned about health impacts.
Frequently Asked Questions
What refineries are set to close in California?
The Phillips 66 refinery in Wilmington and the Valero refinery in Benicia are scheduled to close by 2026.
How many barrels per day will be lost due to these closures?
The closures will eliminate about 284,000 barrels-per-day of refining capacity.
What impact will this have on gas prices?
Experts predict that gas prices may experience spikes ranging from modest increases of less than $1 to potentially exceeding $8 per gallon by late 2026.
How many jobs are at risk due to these closures?
The Phillips 66 refinery employs about 900 workers and Valero employs around 400 workers, putting these jobs at risk.
Key Features of the Refinery Closures
| Feature | Details |
|---|---|
| Refineries Closing | Phillips 66 Wilmington, Valero Benicia |
| Closure Timeline | By 2026, Phillips 66 by October 2025 |
| Capacity Loss | 284,000 barrels-per-day |
| Job Losses | Approximately 1,300 jobs at risk |
| Current Gas Price | $4.85 per gallon (average in California) |
| Projected Gas Price Spike | Potentially exceeding $8 per gallon by late 2026 |
Deeper Dive: News & Info About This Topic
- LAist: Phillips 66 Shutting LA Refineries
- Wikipedia: Oil Refinery
- Energy at Haas: California’s Refinery Closure Drama
- Google Search: California refinery closures
- KCRA: California Lawmakers and Regulators Clash on Oil Refineries
- Encyclopedia Britannica: Energy
- Moneywise: Gas Could Spike to $8 per Gallon
- Encyclopedia Britannica: Gasoline
Author: STAFF HERE COSTA MESA WRITER
COSTA MESA STAFF WRITER The COSTA MESA STAFF WRITER represents the experienced team at HERECostaMesa.com, your go-to source for actionable local news and information in Costa Mesa, Orange 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 OC Fair, Concerts in the Park, and Fish Fry. Our coverage extends to key organizations like the Costa Mesa Chamber of Commerce and Boys & Girls Clubs of Central Orange Coast, plus leading businesses in retail, fashion, and technology that power the local economy such as Vans, Experian, and South Coast Plaza. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, HERESanDiego.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
