Phillips 66 is set to initiate layoffs at its Los Angeles-area refinery starting December 2025, marking a significant shift in California’s energy landscape. The 139,000-barrel-per-day facility, which employs approximately 600 staff and 300 contractors, has been a cornerstone of the state’s fuel production. Over half of the workforce is represented by the United Steelworkers Union.
The company had previously announced plans in October 2024 to wind down operations at the refinery by October 2025. While some employees will be relocated to Phillips 66’s Los Angeles marine oil terminal, the company has not disclosed future plans for the refinery site.
This closure is part of a broader trend in California’s push towards renewable energy. Valero Energy also announced the shutdown of its 145,000-barrel-per-day Benicia refinery. Together, these two facilities account for about 20% of California’s gasoline supply.
Governor Gavin Newsom has been advocating for a transition to electric vehicles and renewable energy sources. However, this dual stance—balancing environmental goals with economic concerns—has drawn criticism and sparked debate among Democrats vying to replace him in 2026. At a recent candidate forum, major Democratic contenders advocated delaying refinery closures to prevent job loss and energy shortages, highlighting the importance of unionized blue-collar jobs in the oil sector.
With California poised to lose two major refineries and facing gas price spikes—potentially up to $8.43 per gallon by 2026—Democrats are increasingly aligning with labor interests to preserve local energy production. Additionally, concerns over job displacement and insufficient clean energy supply are prompting calls for a pragmatic “all of the above” energy strategy that maintains fossil fuel infrastructure until the state is fully prepared to transition.
The impending layoffs at Phillips 66’s Los Angeles refinery underscore the challenges California faces in balancing its ambitious environmental goals with economic and labor considerations. As the state navigates this complex transition, the decisions made in the coming months will have lasting impacts on its workforce and energy landscape.