Phillips 66 closing California refinery

[SC Maintenance]

My neighbor works at the P66 refinery up here. (he has a ~20+ mile or so commute) . He actually works for a contractor unloading tanker cars of..............you guessed it: Tallow and seed oils. Tallow for diesel, seed oils for diesel and jet fuel and kerosene. I don't know how that makes a lot of sense, efficiency/$ wise.

Well this was timely, popped up on my feed.

Company Gevo, ticker also GEVO, $500M market cap yesterday, got a $1.5B loan guarantee from the dept of energy to build a sustainable aviation fuel plant in Montana. "$1.46 billion loan guarantee for a large-scale facility that turns corn starch into jet fuel."

https://finance.yahoo.com/news/gevo-calumet-shares-jump-us-220251259.html

 

[Nessism1]

I live near the refinery in question. Hopefully they sell, and don't close the place. It used to be owned by Union Oil. Every year, this time of year, they paint one of the tanks like a jack-o-lantern.

ExxonMobil sold their refinery just up the street, to a third party, a few years back. The big companies need to protect themselves from deep pocket grabs from the likes of Newsom and crew.

 

[MNgopher]

The average age of US refineries is 75 years. We haven't built any new ones in decades. ...

Not exactly correct, and does not account for major expansions that have happened at many existing refineries - in many cases expansion makes a lot more sense than building new...


From the EIA:

https://www.eia.gov/tools/faqs/faq.php?id=29&t=6

The table is cut at the last 10 years worth FYI.

The newest refineries currently operating in the United States

Year built	First operated	Location	Original owner	Original capacity b/cd	Current owner	2023 Capacity b/cd
2021	2022	Galveston, Texas	Texas International Terminals	45,000	Texas International Terminals	45,000
2021	2021	Kern, California	Talley Asphalt Products	1,700	Talley Asphalt Products	1,700
2018	2019	Channelview, Texas	Targa Resources	35,000	Hartree Partners	45,000
2016	2017	Corpus Christi, Texas	Magellan Midstream Partners	42,500	Oneok	42,500
2015	2015	Corpus Christi, Texas	Buckeye Partners	46,250	Buckeye Partners	60,000
2015	2015	Houston, Texas	Petromax Refining	25,000	Petromax Refining	25,000
2014	2015	Galena Park, Texas	Kinder Morgan	42,000	Kinder Morgan	105,000

 

[SubieRubyRoo]

Phillips 66 said they will close their refinery near Los Angeles by the end of next year. The refinery is pretty ancient, but produces about 8% of California's fuel. Of course they say they will use alternate sources, but very roughly the USA uses about 20 Million Barrels per day of crude, but can only refine about 18 Mb/d, so the 130K from this refinery will be missed.

I hope the Canadian's or Mexican's build some refineries, since were not.

https://apnews.com/article/californ...66-shut-down-bbea1826c0d5d472273f97ad86b870f8

Hasn’t been any large new refineries since like 1976 IIRC. Mainly because everyone is a NIMBY on this issue, but just like with nuclear, the requirements are so tight now that both the risks and potential impacts to the community are minimal.

The thing I think that gets missed would be all of the jobs and resultant tax base improvements for a community if something like this was done near them…

 

[2strokeNorthstar]

The average age of US refineries is 75 years. We haven't built any new ones in decades. Things haven't changed much, so yes could easily be maintained for continued use. California is suing all the major oil companies including Phillips 66 for "causing climate change", so likely the main reason for leaving.

My question for the prosecutors of said lawsuit. Did they ever drive a ICE car anywhere and also contribute? The state still lets petroleum be sold, so how can they sue the producers of it? Hypocrite much?

Talks of a new fuel requirement in CA too. Good time to leave where you're unwanted. Unfortunately the low/middle class will feel it the most.

 

[MNgopher]

Hasn’t been any large new refineries since like 1976 IIRC. Mainly because everyone is a NIMBY on this issue, but just like with nuclear, the requirements are so tight now that both the risks and potential impacts to the community are minimal.

The thing I think that gets missed would be all of the jobs and resultant tax base improvements for a community if something like this was done near them…

How many major expansions of existing refineries happened during that timeframe. (Example: ExxonMobil in Beaumont Texas brought capacity up from 369,000 bpd to 609.000 bpd that came on line in 2023...)

The refinery near me has grown from 130,000 bpd to to its current capacity of 375,000 bpd since 1979...

Often forgotten in the we haven't built anything "new" is the the major expansions that have taken place...

 

[SC Maintenance]

How many major expansions of existing refineries happened during that timeframe. (Example: ExxonMobil in Beaumont Texas brought capacity up from 369,000 bpd to 609.000 bpd that came on line in 2023...)

The refinery near me has grown from 130,000 bpd to to its current capacity of 375,000 bpd since 1979...

Often forgotten in the we haven't built anything "new" is the the major expansions that have taken place...

True, but were still short of capacity by almost 2Mb/d. When these little refineries shut down we likely won't get them back. So its a net negative for everyone, IMHO.

 

[tnt_motorsports]

I can't blame them for closing it. Why would you invest in a state that is against your business. I'd sooner move my business somewhere else.

Just my $0.02

 

[ripcord]

Because lawyers.

And governors.

 

[SubieRubyRoo]

How many major expansions of existing refineries happened during that timeframe. (Example: ExxonMobil in Beaumont Texas brought capacity up from 369,000 bpd to 609.000 bpd that came on line in 2023...)

The refinery near me has grown from 130,000 bpd to to its current capacity of 375,000 bpd since 1979...

Often forgotten in the we haven't built anything "new" is the the major expansions that have taken place...

Completely agree there have been some expansions. But expansions are always limited, and obviously the overall capacity is now lagging demand by about 2M barrels a day IIRC. Also, the older yet still expanded refineries are almost surely going to have a larger downtime % than a brand new refinery. Ultrasonic pipe thickness & vessel thickness checks caused several unplanned DT events when I was working at Citgo in Lemont. That doesn’t happen on new process equipment.

Expansions help, but new footprint is more beneficial especially when the site has room to grow. Hydrocarbons and nuclear are in our foreseeable future as the main driver of the world economy and improving lives around the globe. Periodic power sources and battery-powered cars guarantee we’re either keeping hydrocarbons & nukes, or else people are going without… pure & simple. Missed opportunities on these fronts will impact everyone negatively.

 

[4WD]

Not everyone knows it but there are oil wells in LA and many are well disguised.

C’mon man - those wells are older than Pablo

 

[4WD]

I live near the refinery in question. Hopefully they sell, and don't close the place. It used to be owned by Union Oil. Every year, this time of year, they paint one of the tanks like a jack-o-lantern.

ExxonMobil sold their refinery just up the street, to a third party, a few years back. The big companies need to protect themselves from deep pocket grabs from the likes of Newsom and crew.

They are also high grading assets globally before the next crash …

 

[Pablo]

C’mon man - those wells are older than Pablo

True story.

Our 2 mile cross country running track was service roads through and around oil wells in Fullerton hills, CA

Now most of that land is houses. Hope the wells were well capped. So to speak.

 

[JavierH19]

Another will very likely buy the assets and get it back up and running.

 

[4WD]

True story.

Our 2 mile cross country running track was service roads through and around oil wells in Fullerton hills, CA

Now most of that land is houses. Hope the wells were well capped. So to speak.

Good one - and both the Astrodome and new park/facilities are built over an old oilfield … it was plugged properly …

 

[Pablo]

Good one - and both the Astrodome and new park/facilities are built over an old oilfield … it was plugged properly …

Black Gold. Texas Tea.

On our land!!

 

[4WD]

Black Gold. Texas Tea.

On our land!!

Well, subsurface extraction can reclaim -
surface mining has other challenges …
We talk about over a dozen minerals needed for EV - but just construction rock/sand has devastated thousands of acres …

 

[Owen Lucas]

California is suing all the major oil companies including Phillips 66 for "causing climate change", so likely the main reason for leaving.

Are they going to sue China as well for polluting more than all countries combined?

 

[Rmay635703]

With California's strangling regulations and stance on climate change, keeping the refinery open would be a losing proposition.

You might be surprised to note that despite the “strangling regulations “ that refineries in California are actually more outdated with higher emissions than refineries found in many other areas.

The reality is that the regulations are mostly meaningless to existing refineries due to grandfathering, unequal enforcement and outright exemption.

Most “pollution “ from refineries is dwarfed by emissions from accidental releases, small fires, outright spills.

It’s also worth noting oil companies have made 100x the profits required to build a new refinery even in California in only the last few years.

The closure of this refinery like every closure before it will bump oil prices up a bit nationwide, reducing the reliability of our fueling infrastructure further and the cost to replace this refinery vrs fix this refinery is likely 10x or more higher.

I view an oil company closing a refinery at this point when we are below the minimum number of refineries needed is just greed and a cash grab demonstrating the truth of the lawsuit against them that is open and shut on price fixing.

 

[javacontour]

You might be surprised to note that despite the “strangling regulations “ that refineries in California are actually more outdated with higher emissions than refineries found in many other areas.

The reality is that the regulations are mostly meaningless to existing refineries due to grandfathering, unequal enforcement and outright exemption.

Most “pollution “ from refineries is dwarfed by emissions from accidental releases, small fires, outright spills.

It’s also worth noting oil companies have made 100x the profits required to build a new refinery even in California in only the last few years.

The closure of this refinery like every closure before it will bump oil prices up a bit nationwide, reducing the reliability of our fueling infrastructure further and the cost to replace this refinery vrs fix this refinery is likely 10x or more higher.

I view an oil company closing a refinery at this point when we are below the minimum number of refineries needed is just greed and a cash grab demonstrating the truth of the lawsuit against them that is open and shut on price fixing.

Two things can be true at the same time. (I'm not saying they are, just thinking out loud.)

1 - We can have a shortage of refinery capacity.

2 - Any given refinery can be a money losing operation.

Or, substitute #2 with instead of losing money, it doesn't meet environmental standards and the costs to bring it up to speed outweigh the benefits.

If a company felt running any given refinery was a winning choice, they would run it.


Closing a refinery that doesn't make business sense isn't selfish. It's keeping the overall business as healthy as possible.

If others think they can run that facility and turn a profit, they will buy it, invest in any needed changes and refine oil.