California is preparing for the closure of two major oil refineries, a move that industry experts say could lead to higher gasoline prices for consumers and businesses. Phillips 66 plans to shut down its 139,000-barrel-per-day Wilmington Los Angeles refinery by the end of 2025. Valero has also announced it will end operations at its 145,000-barrel-per-day Benicia refinery in the Bay Area by April 2026.
These closures are part of a broader decline in refinery capacity on the West Coast. Phillips 66 ended operations at its Rodeo refinery in 2024, and Marathon closed its Martinez refinery in 2020. According to a Phillips 66 news release, California will lose about 17% of its oil refinery capacity within the next year.
Clint Olivier, president and CEO of BizFed Central Valley, said the closures will make it harder for California to replace its refined oil supply. “The state has been so openly hostile to oil, refineries and the sources of power that exist now,” Olivier said. “We have aspirational goals, as a state and as a society to move towards cleaner energy and transportation.”
Olivier emphasized that most Californians still rely on gasoline-powered vehicles. He urged policymakers in Sacramento to consider the impact on residents and optimize current infrastructure until alternative systems are available. Olivier added that increased fuel costs are typically passed on to consumers by transportation and logistics companies.
BizFed supports an energy policy that includes solar, hydrogen, wind, and oil. “Oil has a place in the California economy and a major role to play. California is making it extremely difficult for its economy,” Olivier said. He argued that if California does not produce its own oil, it will have to import it from other states or countries. According to Olivier, California produces oil more safely and cleanly than other regions.
Olivier expressed hope that Governor Gavin Newsom would adopt a broader perspective on oil legislation to benefit Californians.
In late September, Governor Newsom signed Senate Bill 237, introduced by Senator Shannon Grover (R-Bakersfield). The bill certifies the Kern County Environmental Impact Report and streamlines permitting for expanding oil and gas production while maintaining environmental protections. Under SB 237, Kern County can approve up to 2,000 new well drilling permits per year for the next decade. In comparison, only 84 new well permits were approved in 2024.
Les Clark, president of the Independent Oil Producers Alliance, said his group represents smaller producers without marketing or refining capabilities. “SB 237 gives the refineries the ability to know that there is going to be more oil to go through their facility,” Clark said. “It’s good news that there is going to be oil in the pipelines but we have to have the refineries.”
Clark noted that strict regulations in California make it unlikely that new refineries will be built in the state. He also pointed out that global events such as the war in Ukraine affect oil prices worldwide. Clark described SB 237 as a positive step but said action should have been taken sooner. He added that jobs in the oil industry offer good wages and questioned whether alternative energy jobs would be as attractive to workers.
