Phillips 66 Ceo Finally Exposes the Real Reason They're Shutting Down California Operations¿!

Phillips 66 came to California in 1919. They came to the state when it was begging for fuel production. And now, after 106 years, they are walking away. December 2025. Done. The refinery processed its final barrel of crude in October. You might have heard the news. But do you know what battles they fought with California before they left? Do you know what their chief executive officer actually said? Because Phillips 66 made $7 billion in profit in 2023. They did not go bankrupt. A company that profitable does not close a century-old refinery because they have to. They close it because they want to. They made a choice to abandon California after 106 years. And their CEO finally explained why. Mark Laschia released a statement that corporate lawyers probably spent weeks crafting. He said the decision came down to the long-term sustainability of the Los Angeles refinery being uncertain and affected by market dynamics. That is the official language. Uncertainty. Market dynamics. But if you read between the lines, he is saying something else entirely. He is saying California made it impossible to stay. You need to understand that Wilmington and Carson facilities that Phillips 66 built in 1919 and 1923 sit 15 miles from Los Angeles International Airport, the fifth busiest airport on the planet. 88 million passengers move through that airport every year. Phillips 66 produced 65,000 barrels of diesel and jet fuel every day. That supply backed thousands of flights every single day, from cargo planes hauling freight from Asia to commercial jets carrying families across the country. Every one of those planes needs jet fuel. Phillips 66 was one of the largest refiners of aviation fuel in North America. Their own marketing materials say they serve private, commercial, and military aviation needs. They also produced 85,000 barrels of gasoline every single day, which is about 8% of California's total refining capacity. This is what California lost, but there is more. The refinery also sits next to the Port of Los Angeles, the busiest port in the Western Hemisphere. Cargo ships, trucks, cranes, and vehicles move goods from Asia to the rest of America. All of it runs on fuel. CEO Lachiere called the property unique and strategically located near the port. He knows exactly what California is giving up. So why would a company walk away from all of this? Because California fought back. On October 14, 2024, Governor Newsom signed Assembly Bill Acts 2-1 into law. Why he did it? Well, here is the backstory. In June 2022, California hit the $6.43 a gallon. Some stations crossed $7 a gallon. The national average was under $5 a gallon. The culprit was refineries shutting down for maintenance without stockpiling enough fuel first. Then it happened again in September 2023. Prices spiked to $6.08 a gallon. In Los Angeles, over $6.07 a gallon. The state's oil watchdog investigated and found the same pattern every time. Refineries going offline, supplies dropping, prices exploding, oil companies pocketing the difference. That 2023 spike alone cost California drivers $2.2 billion. So Sacramento decided to take control. Here is what the new law does. It gives California regulators the power to tell refineries how much gasoline they have to keep in storage at all times. It also lets the state decide when refineries can shut down for maintenance. The state called it what it was, profit spikes. They accused refineries of creating the shortages and cashing in on them. So the government decided to take that power away. The oil industry did not take it well. They decided to show California exactly how much power they still have. The oil industry's response came 48 hours after the bill. Phillips 66 announced they were closing the Los Angeles refinery. 106 years of history, done. Of course, the company insists the timing was pure coincidence. A spokesperson said the decision was based on multiple factors, including long-term sustainability and market dynamics. The same vague language from the CEO's statement. No mention of the law. No mention of Sacramento. Just pure coincidence. But the California Fuels and Convenience Alliance, an industry group representing refiners and gas station owners, had been warning the legislature for months. They said this exact law would drive refineries out of the state. Assembly Republican leader James Gallagher did not hold back. He said, thanks to Gavin Newsom's showboating and incompetence, hundreds of workers will lose their jobs while California drivers face massive price hikes. The California Energy Commission did not seem worried. A spokesperson called the closure a step forward in California's move to cleaner energy. They praised Phillips 66 for committing to minimize impacts on Californians. Here's what that commitment actually means. Phillips 66 promised to keep supplying gasoline from internal and external sources. In other words, they will import it. They will not produce it in California anymore. They will buy it from somewhere else and sell it to you. The state called that a creative solution, a step forward. That's how Sacramento described eliminating 8% of the state's gasoline supply. But the October announcement was not the start of Phillips 66's problems with California. It was the end of a war that had been building for years. Did you know a California judge just called Phillips 66 reprehensible? Those were his exact words. He called it an oil and gas behemoth that abused its power. This is not a comment from an activist. This is from a courtroom ruling. Phillips 66 was ordered to pay $833 million. Not for pollution, not for safety violations, but for stealing trade secrets from a small Sacramento company and using them to build a billion-dollar business. One of the five largest trade secret verdicts in American history. This is the company that says leaving California was purely a business decision. Here's what happened. In 2017, Phillips 66 approached a small company called Propel Fuels. Propel had spent 13 years building a renewable fuels business from scratch. They knew how to sell low-carbon gasoline and diesel in California. They had the technology, the customer data, the locations, and the relationships with regulators. Everything Phillips needed to compete in California's green fuel market. Phillips said they wanted to buy Propel. They signed a confidentiality agreement. Propel opened their books and handed over 13 years of trade secrets. Then in August 2018, Phillips killed the deal. No explanation. They just walked away on a Friday morning. The following Monday, they told California regulators they were launching their own renewable fuels business using everything Propel had shown them. Propel sued. The case went to trial in 2024. The jury found Phillips 66 guilty of willful and malicious trade secret theft. They awarded Propel $605 million. Then the judge added another $228 million in punitive damages for a total of $833 million. Then California squeezed them further. The state has something called the Low Carbon Fuel Standard. It is a rule that says every year the gasoline you sell has to be cleaner than the year before. By 2030, refiners have to cut their fuel's carbon content by 20%. If you cannot hit the target, you have to buy credits from companies that do sell cleaner fuel. Think of it like paying a fine for not being green enough. And those credits are not cheap. On top of that, California runs a cap-and-trade program. Every time a refinery releases greenhouse gases, they have to pay for it. Every ton of carbon dioxide. Every puff of emissions. There is a price tag attached. Add it all up, and industry estimates say these programs cost refiners about $0.54 for every gallon of gas they produce. That is $0.54 that has nothing to do with crude oil, nothing to do with labor, nothing to do with equipment. Just the cost of doing business in California. Phillips 66 tried to play along. They converted their rodeo refinery in the San Francisco Bay Area into a renewable fuels facility. Instead of gasoline, it now produces renewable diesel and sustainable aviation fuel. They shut down their Santa Maria refinery in 2023. The Los Angeles closure makes three California facilities they have either closed or converted in just five years. They are not adapting anymore. They are leaving. And then there's the mess they're leaving behind. For almost 40 years, starting in the middle of the 20th century, workers at the refinery buried truckloads of industrial waste directly on site. Slop oil. Acid sludge. They just dumped it in the ground. Back then, nobody asked questions. Decades later, state records show that the waste is still there, sitting in the soil and leaking into the water table. Lead contamination. Toxic chemicals from firefighting foam. Phillips 66 has set aside $70 million for groundwater cleanup. Sounds like a lot, but we are talking about 650 acres of contaminated industrial land. $70 million will not come close. Someone is going to be paying for that cleanup for years to come. So after all of this, who actually won? Phillips 66 is out. California's fuel supply just got smaller. 900 workers lost their jobs. And there is a toxic mess that will take decades to clean up. You decide who came out ahead. The question now is what happens to California's fuel supply. Governor Newsom says California is building a clean energy future. He points to the 2035 mandate that requires all new cars sold in the state to be zero emission. He talks about the transition away from fossil fuels like it has already happened. Phillips 66 operated in California for 106 years. They survived two world wars, the Great Depression, oil embargoes, corporate mergers, earthquakes, and recessions. What they could not survive was Sacramento. Chief Executive Officer Mark LeShear called it market dynamics. The timing calls it something else. Two days after Newsom signed a law tightening control over refineries, one of the oldest refineries in the state announced it was done. That is not a coincidence. That is a company telling California exactly what they think of its policies. If you made it this far, you understand what is really happening. This is not about one refinery. Thank you so much for watching.