The Brief

Phillips 66 announced last week it will shut down its oil refineries in Wilmington and Carson by the end of next year, marking the end of an era.

Starting more than 100 years ago, the refineries have turned crude oil into billions of gallons of gasoline, diesel and jet fuel from their location next to the nation’s largest ports. Together, the refineries supply about 8% of all of California’s gasoline demand. They also contribute to California’s single largest source of planet-heating pollution from the industrial sector.

The decision comes as demand for gasoline continues to decline and an aging facility faces costly maintenance and updates to meet pollution regulations.

About 600 employees and 300 contractors will be affected by the closure, according to the company.

What does the closure mean for nearby communities? 

Pollution from refineries has been linked to higher rates of asthma and cancer in neighboring communities. Homes in Wilmington, for example, are a stone’s throw from the Phillips 66 facility, just across a cinder block wall. The Wilmington and Carson area has the largest concentration of oil refineries in California.

“These facilities are linked to so much suffering and death that they will never pay for,” said Alicia Rivera, an organizer with Communities for a Better Environment who has advocated for better protections from refinery pollution in Wilmington for more than 20 years.

She said she’s glad the refinery is closing, but worries the site will just be turned into another health-harming facility, such as hydrogen, biofuel production, or carbon capture. Those types of operations may reduce planet-heating carbon pollution compared to traditional oil and gas production, but they can also increase or not significantly reduce local health-harming air pollution, as well as have other impacts.

“I hope that Phillips 66 doesn’t plan another polluting operation…continuing the trend of fossil fuels that are fueling the catastrophe of illnesses in the neighborhood and in the climate,” Rivera said. “The neighbors are vigilant about what the plans are.”

An aerial view shows Marathon Petroleum Corp's Los Angeles Refinery in Carson, Calif. It's the state's largest producer of gasoline. It's among the many refineries in Wilmington-Carson area, including Phillips 66's Los Angeles Refinery, which will shut down next year.

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David McNew

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Getty Images

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Phillips 66 converted its other California refinery in San Francisco to produce “renewable diesel” and “sustainable aviation fuel,” made mostly from vegetable oils, animal fats, and animal feed. However, that facility may not reduce carbon pollution as much as claimed, and could increase local air pollution.

Rivera said the community has not yet been involved in discussions about what may be next for the site.

Redevelopment would be subject to a full public process under the California Environmental Quality Act.

What’s next for the refineries?

“With the long-term sustainability of our Los Angeles Refinery uncertain and affected by market dynamics, we are working with leading land development firms to evaluate the future use of our unique and strategically located properties near the Port of Los Angeles,” said Mark Lashier, chairman and CEO of Phillips 66, in a news release. “These sites offer an opportunity to create a transformational project that can support the environment, generate economic development, create jobs, and improve the region’s critical infrastructure."

A Phillips 66 spokesperson declined to provide more details on their future plans for the 650-acre site.

Phillips 66 has been trying to sell the aging refineries for years, said David Hackett, chairman of Stillwater Associates, a transportation energy consulting firm in Irvine.

Phillips 66 is not one of their clients, but Hackett said they called him about the closure before the public announcement.

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Courtesy Nick Souza Photography via The Port of Los Angeles

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Hackett told LAist their representative told him that part of the 650-acre site will be converted to an oil terminal, which will store and distribute imported petroleum products.

The rest of the site he expects they’ll clean up and repurpose for other industrial uses, such as warehousing. The land is zoned industrial.

“Land that's zoned industrial is very dear in Southern California,” Hackett said. “So they could essentially recycle the land, scrape the buildings that are there, clean up the dirt, and then sell it to somebody for other industrial uses. There are plenty of examples of this in the industry. You see this fairly frequently.”

Why now? 

Demand for gasoline has been steadily declining since the early 2000s due to slowed population growth, more efficient gas and diesel vehicles, and now the increasing adoption of electric vehicles. The Phillips 66 L.A. refineries also face higher costs to maintain and upgrade aging facilities and meet pollution reduction requirements.

Hackett said he wasn’t surprised Phillips 66 decided to shut down the aging refinery, but he was surprised by the timing.

“What we forecast is that the demand is going to come off to the point sometime before the end of the decade where the economics of running a refinery are poor,” Hackett said. “At that point, somebody would give up and quit. We didn't think somebody would be quitting next year. We figured it would be around 2027.”

A spokesperson for Phillips 66 said in a statement that the decision was primarily related to high-cost operations and a long-term decline in demand for crude oil products.

Will gas prices be affected? 

Phillips 66 said in its news release that despite the closure at the end of next year, it will continue to “work with the state of California to supply fuel markets and meet ongoing consumer demand.”

The company declined to provide more details to LAist on how exactly they'll meet that demand.

Hackett said the closure could lead to higher gas prices, because the company will likely need to import more gasoline to meet demand.

“While demand is decreasing, it's not going to decrease 8% between now and the end of next year,” Hackett said. “That gasoline supply…is going to come in by tanker from someplace else.”

And imported gasoline on average costs more, Hackett said.

"Instead of being produced locally, it'll be produced someplace else: India or Korea or the United Kingdom — those are the places that make the most California-like gasoline, so it's got to come from halfway around the world," Hackett said. “It's going to be expensive.”

The refineries will shut down late next year, so the exact impact won’t be quite clear until closer to the date.

A slow leak from a chemical tank smeared an orange cloud across the sky of a Southern California neighborhood on Tuesday, but authorities said they quickly got it under control.

Los Angeles County Fire Capt. Aaron Katon said authorities responded to a business that makes cleaning products after receiving a call shortly before noon about the cloud. Police evacuated a nearby middle school as a precaution, Katon said.

They do not yet know what the chemical was, but all shelter-in-place orders have been lifted, he said. The regional air quality management district has deployed staff to the area to investigate, said Connie Villanueva, a spokesperson for the South Coast Air Quality Management District.

The company, Shepard Bros., could not immediately be reached for comment.

Three company employees reported minor respiratory irritation and declined further treatment, Katon said.

The leak occurred in the city of La Habra near a mix of residential neighborhoods and industrial warehouses about 10 miles (16 kilometers) north of Anaheim.

Keary Godinez, who works in a nearby restaurant, said she saw what appeared to be a dark yellow cloud spread across the sky. The 20-year-old said she watched students across the street board buses to evacuate, but police told her the eatery could remain open.

“It looked like pollen dust,” Godinez said, adding she didn’t detect a smell from the cloud. “It just kind of smeared in the sky and started going away.”

La Habra Mayor Jose Medrano had urged residents to shelter in place and said some streets were being evacuated.

Luis Gomez, who manages a nearby pickleball program, said earlier Tuesday he saw the cloud, called police and was told anyone within a mile radius of the location was under an evacuation order.

The Los Angeles Lakers will unveil a statue of former coach Phil Jackson outside their downtown arena next year.

The Lakers announced the plan Tuesday to honor Jackson, who led the Lakers to five championships and seven NBA Finals appearances during two stints totaling 11 seasons as their head coach.

The statue will be unveiled April 9 before the Lakers’ home game against Minnesota.

After his famed tenure leading Michael Jordan’s Chicago Bulls to six championships, Jackson joined the Lakers in 1999 and immediately began another era of major success for the 17-time NBA champion franchise.

His first three teams in Los Angeles won championships behind the dynamic duo of Kobe Bryant and Shaquille O’Neal, and the Lakers added two more titles in 2009 and 2010 led by Bryant and Pau Gasol. His Lakers also made the NBA Finals in 2004 and 2008.

Jackson set the Lakers franchise record for coaches with 610 victories while leading his teams to the playoffs in every year of his tenure, which ended in 2011.

“Phil Jackson defines championship basketball for a reason,” Lakers governor Jeanie Buss said in a statement. “His masterful approach to coaching brought out the best in some of the greatest athletes to ever play the game. After he accepted my dad’s invitation to join the Lakers, Phil’s unmatched creativity and commitment to excellence restored our championship legacy, bringing five titles and setting a standard of excellence for generations to come. It is a great joy to be able to mark that achievement with the statue he so richly deserves.”

Jackson will be the ninth person associated with the Lakers to be honored with a statue in Star Plaza outside their arena. He joins Magic Johnson, Kareem Abdul-Jabbar, Jerry West, Elgin Baylor, Bryant, O’Neal, broadcaster Chick Hearn and former coach Pat Riley, whose statue was unveiled earlier this year.

Jackson’s 11 championships as a head coach are the most in NBA history. The North Dakota native and former New York Knicks forward is a member of the Basketball Hall of Fame.