California, August 25, 2025
News Summary
California faces significant economic and environmental challenges as two major oil refineries, Phillips 66 and Valero, are scheduled to shut down by 2026. The loss of 284,000 barrels per day, representing nearly 20% of the state’s refining capacity, will lead to job losses for 1,300 workers and potential gas price spikes. As the state grapples with increased reliance on fuel imports and scrutiny of regulatory practices, the closures emphasize the urgency for strategic energy transition planning.
California Oil Refineries to Shut Down by 2026, Leading to Economic and Environmental Concerns
California is set to lose significant oil refining capacity as two major refineries, operated by Phillips 66 and Valero, are scheduled to shut down by 2026. The Phillips 66 facility in Wilmington is expected to close by October 2025, while the Valero refinery in Benicia will cease operations soon after. Together, these closures will eliminate approximately 284,000 barrels per day of refining capacity, a figure that represents nearly 20% of the state’s total refining capability.
Assemblymember Mike A. Gipson has raised alarms about the potential job losses stemming from these shutdowns. Both facilities employ hundreds of workers, with Phillips 66 supporting about 900 and Valero approximately 400. Many of these workers reside in Gipson’s district, highlighting the local economic impact of these closures. Additionally, these job losses could create significant challenges for communities that depend on these employment opportunities.
The decision for Valero’s closure has been influenced by years of intense regulatory pressure, including fines for air quality violations totaling $82 million in 2024 alone. Phillips 66 has also cited stringent environmental regulations as a primary reason for their Wilmington facility’s closure. As California grapples with increasing fuel costs, the state currently processes around 24% of its crude oil needs, while consuming roughly 13.1 million gallons of fuel daily—contributing to the country’s highest gas prices, averaging $4.85 per gallon compared to a national average of $3.16.
Experts are warning that the loss of refining capacity could lead to volatile gas prices, with potential increases ranging from less than $1 to possibly exceeding $8 per gallon by late 2026. With closures forcing the state to depend more heavily on imported fuels, both shipping costs and emissions related to tanker vessels are expected to rise. This situation raises critical concerns about California’s long-term energy sustainability as existing regulatory measures are put under scrutiny.
California legislators have begun questioning the effectiveness of state regulatory agencies in managing the oil and gas sector in light of these rising fuel costs. The anticipated shift towards increased reliance on fuel imports could worsen the current economic landscape, exacerbating the struggles of communities and their residents. Furthermore, the California Air Resources Board has faced criticism for not actively evaluating how its regulations impact consumers and drivers.
As the state prepares for these upcoming transitions, discussions are emerging about potential future uses for the closed refinery sites. While alternative industrial applications may offer new opportunities, community opposition concerning health impacts related to these developments may arise. Overall, the closure of these major refineries is poised to introduce both economic and environmental complexities to California’s energy framework, emphasizing the need for strategic planning moving forward.
Key Details of the Refinery Closures
- Refineries Closing: Phillips 66 (Wilmington) by October 2025, Valero (Benicia) by 2026
- Total Capacity Loss: 284,000 barrels per day, approximately 20% of California’s total refining capacity
- Job Losses: 900 from Phillips 66, 400 from Valero
- Gas Price Effects: Potential increases by late 2026, from less than $1 to over $8 per gallon
- California’s Current Fuel Consumption: Around 13.1 million gallons daily
Conclusion
The looming closures of Phillips 66 and Valero refineries present significant challenges for California, impacting thousands of jobs, fuel prices, and regulatory discussions on energy policies. A balanced approach to managing these transitions will be crucial in maintaining economic stability and addressing environmental regulations in the state.
FAQ
- What refineries are scheduled to close in California?
- The Phillips 66 refinery in Wilmington is set to close by October 2025, and the Valero refinery in Benicia will close by 2026.
- What percentage of California’s refining capacity will be lost?
- The closures will eliminate around 20% of California’s total refining capacity, equivalent to 284,000 barrels per day.
- How many jobs will be affected by these closures?
- About 1,300 jobs will be lost, with Phillips 66 employing approximately 900 workers and Valero around 400 employees.
- What are the expected changes in gas prices?
- Experts predict gas prices may increase by late 2026, with potential rises of less than $1 to over $8 per gallon.
- Why are the refineries closing?
- Closures are attributed to strict environmental regulations and significant fines for air quality violations, particularly for the Valero facility.
Key Features of the Article
| Feature | Description |
|---|---|
| Refinery Closures | Phillips 66 by October 2025, Valero by 2026 |
| Capacity Loss | 284,000 barrels per day; 20% of total capacity |
| Job Impact | 1,300 job losses; 900 from Phillips 66, 400 from Valero |
| Gas Price Projections | Potential increase up to $8 per gallon by late 2026 |
| Regulatory Influences | Fines and environmental regulations affecting closures |
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, Regulators Clash Over Oil Refineries
- Encyclopedia Britannica: Fuel
- Moneywise: Gas Could Spike to $8 Per Gallon
- Google News: California refinery oil
Author: STAFF HERE CORONADO
The Coronado Staff Writer represents the experienced team at HERECoronado.com, your go-to source for actionable local news and information in Coronado, San Diego 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 Coronado Island Film Festival, productions at Lamb’s Players Theatre, community workshops at John D. Spreckels Center, and iconic celebrations at Hotel del Coronado. Our coverage extends to key organizations like the Coronado Chamber of Commerce and Visit Coronado, plus leading businesses in hospitality, dining, and tourism that drive the local economy. As part of the broader HERE network, including HERESanDiego.com, HEREHuntingtonBeach.com, HERELongBeach.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
