Phillips 66 announced plans to close its Los Angeles-area refinery by the fourth quarter of 2025, putting the future of 600 employees and 300 contractors at stake. The refinery, located across Wilmington and Carson, operates as a significant crude oil processing hub, spanning 235 acres in Carson and another 424 acres in Wilmington. The two sites are connected by a five-mile pipeline, and together, they play a crucial role in oil refining for the region.
Reasons for Refinery Closure
In a statement, Phillips 66 cited concerns over the refinery’s long-term sustainability and profitability as key reasons for the shutdown. According to Mark Lashier, chairman and CEO of Phillips 66, the decision was influenced by market dynamics and the refinery’s lower profitability compared to other company assets. Lashier emphasized the company’s commitment to supporting affected employees and contractors through the transition.
“We understand this decision has an impact on our employees, contractors, and the broader community,” Lashier said. “We will work to help and support them through this transition.”
Phillips 66 Evaluates Future Site Use
The company plans to collaborate with leading land development firms to explore future uses of the property, which is strategically located near the Port of Los Angeles. However, Phillips 66 has not yet provided further details about potential redevelopment projects.
Al Ortiz, a spokesperson for Phillips 66, clarified that the closure is unrelated to recent California legislation targeting the oil industry. Instead, it is part of the company’s broader portfolio review aimed at optimizing operations and profitability. “The uncertainty is in reference to the refinery’s low profitability compared to other assets in our portfolio,” Ortiz said.
California’s New Energy Legislation
The closure announcement came shortly after California Governor Gavin Newsom signed a bill aimed at preventing gasoline price spikes during unplanned refinery outages. The bill is one of many recent pieces of energy legislation aimed at regulating the oil industry, including stricter regulations on oil drilling and public health measures related to the oil sector’s environmental impact.
Local Community Reaction to Phillips 66 Closure
Local officials and environmental advocates expressed mixed reactions to the refinery’s impending closure. L.A. City Councilman Tim McOsker, whose district includes Wilmington, recognized the loss of jobs but also saw potential for future economic opportunities.
“This is significant, but it opens the door to exciting opportunities for new jobs, improved air quality, and innovative economic benefits in the years to come,” McOsker said.
Phillips 66 has committed to working with the city’s Economic and Workforce Development Department to assist displaced workers. County Supervisor Janice Hahn emphasized the importance of providing job training and resources to help workers transition into new roles.
Environmental Concerns and Future Impacts
Environmental advocates remain cautious about the refinery’s closure. Janet Gunter, an activist from San Pedro, voiced concerns about whether the site would continue to be used for oil processing under new ownership. She also highlighted the refinery’s location in an earthquake rupture zone and areas prone to landslides and liquefaction.
“There’s a good chance another company could take over and keep the refinery in operation, which won’t help safety for residents,” Gunter said.
Others in the community, like Gina Martinez of the Wilmington Neighborhood Council, expressed mixed feelings about the closure. While concerned about the potential displacement of workers, she also acknowledged the end of an era for the refinery, which has provided livelihoods for generations.
Impact on Workers and Their Retirement Plans
The closure of the Phillips 66 Los Angeles refinery will affect the livelihoods of over 600 employees and 300 contractors, many of whom have worked at the facility for years. As workers face job displacement, retirement plans could be significantly impacted, especially for those nearing retirement age. Phillips 66 has pledged to offer transition support, though it’s unclear how severance packages or pension plans will be handled. Local officials have committed to providing resources, such as job training, to help these workers find new employment and secure their financial futures.
This is a crucial moment for workers, especially regarding their retirement plans, as many will need to consider options like early retirement or job transitions that could affect their long-term savings. The company’s decision to assist through job transitions may ease the immediate financial strain, but for older employees, the loss of stable employment could lead to revisiting financial goals, especially if they were relying on continued income to meet retirement targets.
Economic and Workforce Development departments in the area will likely step in to offer guidance on these transitions, including helping employees evaluate whether their retirement plans need adjusting due to loss of employment and income. Whether Phillips 66 will enhance retirement benefits to offset the job loss remains to be seen, though workers might need additional financial advice to navigate this unexpected change.
Retirement Plan Options for Affected Workers
For employees affected by the Phillips 66 refinery closure, there are several retirement plan options to consider:
- Rollover to an IRA: Workers can transfer their 401(k) or pension funds into an Individual Retirement Account (IRA), maintaining tax-deferred growth.
- Early Retirement: Those nearing retirement age might consider retiring early, though they should assess potential penalties or reduced benefits.
- Job Transition: Workers may find new employment, allowing them to continue contributions to retirement plans, potentially with a new employer’s 401(k) program.
Phillips 66’s Commitment to California’s Fuel Supply
Despite the refinery closure, Phillips 66 reaffirmed its commitment to supplying fuel in California. The company plans to meet consumer demand through its other refining operations, including the Rodeo Renewable Energy Complex in the San Francisco Bay Area. This facility focuses on renewable diesel and sustainable aviation fuels, part of Phillips 66’s strategy to transition to cleaner energy sources.
In summary, while the closure of the LA-area refinery marks a significant shift for the company and the local community, it also opens the door to potential redevelopment and economic revitalization in the region.