For more than a century, the Phillips 66 Los Angeles refinery, in Wilmington and Carson, has symbolized the legacy of the region’s oil industry – which, in many ways, built Southern California.
The industrial behemoth, however, now represents something else: the slow, but constant, decline of that once resolute legacy.
By year’s end, Phillips 66 will shutter the refinery.
The facility — which is among a cluster of South Bay refineries, including the El Segundo Chevron Refinery that experienced a fire last week — is one of the largest fuel providers in the country. It spans 405 acres across two facilities, produces about 139,000 barrels of crude oil and 85,000 barrels of gasoline per day, and employs hundreds of people.
The plant’s imminent closure, initially announced in October 2024, was the latest evidence that, if things continue trending the same way, oil production could eventually have less of a role in the region’s and the state’s long-term future, with various laws on the books aimed at reducing reliance on “black gold.” Some cities, such as Long Beach, are also working to end their reliance on oil revenues.
But in the short-term, the closure represents a challenge for environmentalists, developers, consumers, residents and local officials.
“Closing a refinery is a decision nobody wants to make,” said Jim Stanley, spokesperson for the Western States Petroleum Association. “Refiners lose an important asset, workers lose jobs, communities lose tax revenue, and the state loses some of its fuel supply.”
And then there’s the question of how to redevelop a highly contaminated site, a process that will be costly and time-consuming – and will require clear eyes.
“The reality is that is never possible,” Ann Alexander, an environmental policy consultant contracted by the Asian Pacific Environmental Network, said about whether the site could ever return to its pre-refinery state. “It’s not possible with most industrial sites and certainly not with something like a refinery.”
These challenges, of course, also fit into the larger context of California and environmental activists working to end the state’s reliance on oil amid concerns about environmental and health consequences.
Ultimately, then, the demise of the Phillips 66 refinery after more than 100 years is not solely an economic story or an environmental story, or a policy, development or public health story.
Rather, it is all of that together – and more. It also represents the shifting reality that while oil is an undeniable part of the region’s past, black gold may have a diminished future.
THE LEGACY OF OIL
Southern California, and the Golden State in general, likely would not be what it is today without oil.
The region’s first well, in fact, was drilled decades before Hollywood’s first movie studio came online.
The 1920s oil boom opened Southern California to international markets, beginning the ascent of the ports of Long Beach and Los Angeles – allowing them to become, combined, the busiest such complex in the nation – and laying the foundation for the state to be an economic powerhouse.
Southern California car culture – with its maze of freeways, rolling roadways and battered byways – would not have been possible without oil.
And signs of the oil industry’s legacy surround – or, depending on your perspective, scar – the Southland:
The THUMS islands off Long Beach’s coast.
The oil rigs, both operational and defunct, that dot historic oil towns throughout the Southland, from Brea and Huntington Beach to Signal Hill and Inglewood.
And, of course, the massive refineries in the Long Beach and South Bay areas that turn crude oil into something usable – particularly gasoline.
But for decades, the oil industry’s success has also been met with concerns and condemnations about its effect on the environment and public health.
Those concerns have been both broad and narrow. The former concerns include the impact emissions have had on climate change and how the refining process pollutes waterways. The latter, meanwhile, include how refinery emissions create negative health outcomes for those who live near such facilities, both during normal operations – and if something were to go wrong.
“These areas have nicknames,” said K Sanchez, a research and organizing assistant with the Asian Pacific Environmental Network, also known as APEN. “There’s the asthma boulevard; there’s the cancer corridor.”
As a result, recent state legislation has sought to rein in the oil industry.
Those efforts crescendoed in 2021, when Gov. Gavin Newsom set a target to phase out the approval of new oil fracking permits by the end of 2024 — and a larger goal to end oil extraction in the state completely by 2045.
Another related piece of legislation — Senate Bill 1137, which prohibits new oil wells within 3,200 feet of schools, homes, day cares, parks, businesses and more — went into effect earlier in 2024.
And in September 2024, Newsom signed three more pieces of related legislation:
- Assembly Bill 3233, which authorizes local governments to limit or prohibit oil and gas operations within their jurisdiction.
- AB 1866, which will require oil operators to plug an estimated 40,000 idle oil wells throughout the state over the next decade, with priority given to wells within 3,200 feet of local communities.
- AB 2716, which specifically targets low-oil operations within the Inglewood Oil Field.
As for refineries, public health and safety concerns have simmered in the region for years, and they bubble up each time an incident occurs, whether that’s a minor, unplanned flaring incident or a fire.
Fires, while infrequent, have repeatedly occurred at the region’s refineries over the years – including last week.
The Chevron Refinery – a relatively short jaunt on the northbound 405 Freeway from the Phillip 66 Carson facility – experienced a massive fire on Thursday evening, Oct. 2.
No one was injured and officials there said there was no harm to the public. But anytime a refinery catches fire – particularly a blaze that could be seen as far away as Long Beach – there’s anxiety.
“As long as fossil fuel infrastructure is near our schools, homes, transit hubs and communities, we will constantly be at risk of explosions, fires, and deadly pollution, like what happened last night,” Andrea Vega, a senior organizer with the advocacy group Food & Water Watch Southern California, said in a Friday statement. “There is no other way to say it, this infrastructure is dangerous.”
While the last fire at the Phillips 66 refinery was in 2019, concerns remain.
For more than a century, the refinery has been polluting the surrounding groundwater and air, in areas that are now residential.
And with the refinery producing toxic chemicals such as gasoline, diesel, aviation fluid, petroleum coke, propane, butane, elemental sulfur and food-grade carbon dioxide, those living in the area have reported increased health issues like asthma and even cancer.
The Phillips 66 Carson refinery, in fact, has contributed to about 64% of the excess cancer risk in the area, according to the U.S. Environmental Protection Agency, and the Wilmington site is even worse – with almost 87% of excess cancer risk being traced back to the refinery.
Rainbow Yeung, a spokesperson with the South Coast Air Quality Management District, said that air pollution in the area surrounding the refinery is not only higher than other parts of the South Coast Air Basin, but also has some of the highest pollution burdens in the entire nation.
Phillips 66, though, does have systems in place to protect the safety of residents, including a fence line air monitoring system.
“The safety of our communities and the environment is our company’s top priority,” a Phillips 66 spokesperson said in a statement. “That priority will continue to guide us as we maintain safe operations through the facility site conversion and continued operations of our pipelines and terminals.”
But the contamination from the refinery appears to be significant.
Last year, for example, a federal grand jury returned an indictment against Phillips 66 for illegally dumping close to 800,000 gallons of toxic wastewater from the Carson facility into the Los Angeles County sewer system.
The LA Water Board, meanwhile, has had its eye on the Carson refinery since 1994, when a troubling discovery was made beneath the facility – a 13-foot deep “lake of oil.”
Since then, Phillips 66 has been ordered to continue remediation efforts by pumping out the toxic waste and treating contaminated water.
But the refinery, Alexander said, is nowhere near finished cleaning up what was discovered in 1994, which itself may pale in comparison to what is discovered once the equipment is removed after the refinery closes.
“The contamination that they describe, in particular at the Carson site, is pretty catastrophically bad,” Alexander said. “They’ve been looking at the water quality and finding that there is some pretty heavy contamination there that’s going to have to be dealt with.”
The Phillips 66 spokesperson said the company has complied with all regulations imposed by the LA Water Board, EPA and AQMD.
“Phillips 66 has leveraged various resources and continuously worked with regulators to address environmental impacts over the years,” the spokesperson said in a written statement. “It’s also important to note that Phillips 66 has systems in place to confine, control and recover groundwater.”
Toxic levels of dangerous chemicals, however, have been found in both the groundwater and soil, creating a large plume spanning the majority of the property and producing benzene, a known carcinogen, in addition to gasoline chemicals.
And, in 2021, the LA Water Board required the reporting of PFAS, also known as forever chemicals because it’s impossible to remove them from the environment. Phillips 66 reported PFAS well above the EPA’s maximum levels, according to data compiled by the California State Water Resources Control Board — likely from foams used to fight fires at the refinery.
In response to that revelation, Phillips 66 has switched to non-PFAS firefighting foams.
Phillips 66 won’t need those foams much longer, however, since its refinery only has a couple of months left before closing.
But even though the closure may represent the end of an era in Carson and Wilmington, the closure, in many ways, will also mark the beginning – of a long journey toward cleaning the site.
REMEDIATION – A LENGTHY JOURNEY
“The contamination that they describe, in particular at the Carson site, is pretty catastrophically bad. They’ve been looking at the water quality and finding that there is some pretty heavy contamination there that’s going to have to be dealt with.”
— Ann Alexander, an environmental policy consultant contracted by the Asian Pacific Environmental Network
Normally, more than 400 acres of land in Los Angeles County – not far from either the ocean or popular entertainment centers, such as Downtown Los Angeles or Long Beach – would be considered prime real estate.
But there’s a problem:
The Carson and Wilmington sites – built in 1923 and 1919, respectively, and connected by a pipeline – may never be restored to their pre-refinery states.
“You’re probably not going to get it to background,” Alexander, the policy consultant with APEN, said, using a term that refers to restoring a site to the way it was before a refinery was there.
Remediation, however, is necessary if those sites are to be redeveloped.
Los Angeles, the city in which the Wilmington neighborhood resides, and Carson have taken different approaches to managing the nascent redevelopment efforts in their respective jurisdiction.
Los Angeles has largely taken a backseat, letting Phillips 66 dictate redevelopment as long as it complies with the state environmental, development and zoning regulations.
As such, the redevelopment process for the Wilmington site is already underway. The proposed plans for Wilmington would divide the site into two areas across the 405 Freeway – a commercial and recreational space and an area for automated warehouses.
Carson, on the other hand, has demanded a say.
After the closure announcement in October 2024, for example, Carson hurried to place a moratorium on project proposals and pass a general plan amendment that gives the City Council final approval of redevelopment plans.
Since that moratorium went into place, Mayor Lula Davis-Holmes said, Carson has required the site to have a specific plan that keeps land-use discretion with the City Council, has hired environmental consultants to assess the site and another consultant to monitor the decommissioning process – to ensure Phillips 66 follows all state and federal laws.
And the city, according to Davis-Holmes, seems poised to thoroughly vet any redevelopment plan.
“Once a redevelopment application is submitted,” she said, “the city will initiate a full environmental impact report with independent experts, and provide multiple opportunities for public review and input.”
And when the city’s moratorium expires this month, Carson will enter into an agreement – called a memorandum of understanding, or MOU – with Phillips 66, requiring the company to submit a special remediation plan along with its development proposal. There will also be a development agreement with the city that will “propose community benefits (such as financial contributions toward city initiatives and projects that support infrastructure throughout the city),” according to the MOU.
Phillips 66, for its part, will work with Carson and all regulatory agencies to complete the level of remediation deemed necessary and achievable, the company spokesperson said.
“This oversight will continue during and after future redevelopment work,” the spokesperson said in a statement, “which is in the very early stages of processing.”
What the redevelopment will look like, though, is unclear.
The Carson site, after all, is surrounded by other refineries and has a high level of contamination. Because of that, Davis-Holmes said, it is unlikely there would be a residential development or other proposals that would create high pedestrian traffic.
No matter what the future holds for the site, however, one of the current priorities is ensure the public is informed about what’s going on with the soon-to-close refinery.
APEN, for example, launched a campaign after the closure was announced to educate those living near the refinery sites about what the closure would entail, holding community town hall meetings and walking around neighborhoods.
“We knocked on hundreds of doors and we talked to several residents about the closure,” said Sanchez, the APEN research and organizing assistant. “What we have found is that a lot of residents, even those who live right next to the refinery, don’t know that the closure is even happening.”
Davis-Holmes responded to that lack of information by creating a task force comprising residents, city staffers, and Councilmembers Bocatija Rojas and Cedric Hicks, who will work with community members to ensure their involvement in redeveloping the site.
“Our goal is to keep the Carson community informed and engaged every step of the way,” Davis-Holmes said, “and that commitment will continue as this process moves forward.”
But for many of the residents who know about the closure, the primary concern is their own health.
“Most of all, what they want is remediation,” Sanchez said. “They want to be able to know that they’re not just being left with a lake of oil, they’re not just being left with a cloud of smog.”
ECONOMIC FALLOUT
“Closing a refinery is a decision nobody wants to make. Refiners lose an important asset, workers lose jobs, communities lose tax revenue, and the state loses some of its fuel supply.”
— Jim Stanley, spokesperson for the Western States Petroleum Association
While the site’s future is critically important for the city and its residents, so is its present – especially economically.
For decades, refineries have been an economic boon not only for the cities in which they reside, but also the region and the state.
Locally, Carson is getting a short-term infusion of cash because of the refinery’s closure.
That’s because the city has a special business license tax it imposes on refineries to counteract the negative impacts on the community – a levy Phillips 66 hasn’t always paid in full.
A 2018 audit, in fact, determined that Phillips 66 had not been paying the full amount required to the city. That began a six-year legal battle during which Phillips 66 did not pay the taxes owed.
After the closure announcement, however, Phillips 66 agreed to settle, paying the city more than $16 million in back taxes, and audit and attorney fees.
While the settlement is a win for the city, once the refinery is closed, Phillips 66 will no longer contribute to Carson’s tax base.
Carson isn’t alone in dealing with this problem.
Major fuel suppliers Valero and Marathon are also idling their facilities, all of which comprise a little more than 17% of California’s oil refinery capacity, according to the U.S. Energy Information Administration.
“It’s important to note that when a refinery closes,” said Stanley, the Western States Petroleum Association spokesperson, “the demand for fuel doesn’t go away – meeting that demand just becomes more complicated and expensive.
“The recently announced closures,” he added, “have forced a much-needed conversation among state leaders about the consequences of state policies attacking the oil and gas industry.”
Gas prices in California are already about 50% higher than the national average for various reasons, such as demand and more stringent regulations, and these shutdowns will only exacerbate those prices, according to the EIA.
“The decision to discontinue operations at the Phillips 66 South Bay refinery, shaped largely by California’s legislative regulatory framework, is a difficult outcome,” said Leah Skinner, president of the Carson Chamber of Commerce. “While our lawmakers had good intentions to map the state’s energy future; the reality is the regulatory framework created unintended consequences for long-standing facilities and its employees, along with rising oil/energy costs for California consumers.”
In 2023, Newsom signed a bill increasing regulatory oversight of refineries. State Senate Bill X1-2 allows the State Energy Resources Conservation and Development Commission to set a maximum gross gasoline refining margin and establish a penalty for any refineries exceeding that margin. The bill also increases the reporting requirements of refineries.
The Phillips 66 spokesperson, however, said that the company’s decision to close the Los Angeles campus did not have anything to do with state regulations – but “market dynamics.”
Still, in the wake of Marathon, Valero and Phillips 66 announcing their shutdown plans, Newsom changed tack.
He asked the California Energy Commission to “redouble” efforts to ensure refiners have the support they need.
The goal, he said in an April letter to Siva Gunda, vice chair of the California Energy Commission, is to ensure “refiners continue to see the value in serving the California market, even as demand for fossil fuels continues its gradual decline over the coming decades.”
But broadly speaking, the state has made things more difficult for refineries, Stanley said.
“One thing we hear over and over is that investors have lost confidence in California’s fuels market because of current market dynamics in the state,” he said. “On top of regular ongoing maintenance, refineries need a major overhaul every 5-7 years, which can cost up to $500 million.
“Lately, we’ve heard that the people being asked to pay for those overhauls don’t believe they will see a return on their investment,” Stanley added. “That is one of the primary reasons refineries are closing – companies just can’t justify the long-term expense of keeping them open because of those dynamics.”
Shuttering refineries also costs jobs.
The Phillips 66 closure alone will displace about 600 employees and 300 contractors.
And with no immediate redevelopment plans, those in Carson must look elsewhere for work at a time when refineries are shutting down at a record rate.
To combat this, the South Bay Workforce Investment Board has applied for an additional assistance grant from the state’s Employment Development Department to support workers after they have been laid-off. SWIB has also been visiting the Carson campus to provide on-site training, resume writing help and interview workshops.
SWIB, in partnership with the United SteelWorkers Union, also recently held a resource fair and two-day job fair, bringing in community businesses to provide future work opportunities for Phillips 66 employees.
Because of these efforts, about 60 individuals have been hired by other companies so far. Overall, about one-third of employees have already left, said David Campbell, a USW representative for both the Phillips 66 Los Angeles sites.
Phillips 66 has also completed surveys for employees who may be eligible to transfer within the company and is collaborating with organizations like SWIB to provide opportunities for its workers, its spokesperson said.
“We are committed to treating all our refinery workers fairly and respectfully throughout this process,” the spokesperson said, “as they operate the facilities safely and efficiently.”
But there’s another issue:
Employees are leaving too quickly, Campbell said – so the refinery is understaffed as work begins to idle the facilities.
With the workforce two-thirds of what it was, Campbell said, those who haven’t left have been forced to log large amounts of overtime – with some reporting 18-hour days.
“In some cases, they’ll have people sleep on their shift,” Campbell said. “It’s pretty bad when you’re in charge of a process that has the potential for explosions.”
Employee fatigue, Campbell said, could have been avoided if Phillips 66 had offered a more enticing severance package – something they had tried to negotiate in order to avoid the situation workers are now in.
“The severance package,” he said, “was not lucrative enough to get enough people to stay until the very end.”
Phillips 66 declined to comment on the severance packages, but its spokesperson did say there have been no safety issues – and seemed to disagree with Campbell’s assessment.
The company, the spokesperson said, “complies with regulations related to fatigue management and closely monitors employees’ schedules to avoid fatigue issues.”
Despite all of this, the Phillips 66 Los Angeles campus is still on track to fully close by the end of the year.
What will happen afterward, particularly with the Carson site, remains unknown.
But things could pick up later this month, with the redevelopment proposal and subsequent environmental impact review commencing as early as Oct. 18, when the city’s moratorium expires.
“We recognize the importance of promoting resilience and responsible growth for the future generations,” Davis-Holmes said in a written statement. “Therefore, we make decisions that reflect a shared vision of a forward-looking and forward-focused community.
“Ultimately, our role is to serve the whole,” she added, “and exercise judgment that reflects today’s needs and tomorrow’s opportunities.”
And so, after more than a century symbolizing the oil industry’s dominance in Southern California, the Phillips 66 Los Angeles refinery represents something else:
The waning of that dominance, yes, but also opportunity – and the unknown.
The unknown of what comes next for a city when its refinery closes for good.