CA Reg Bill X2-1 signed, Phillips announces closure of refinery. $3 Billion to close.

The “new regulation” widely perceived as the final straw for Phillips 66’s Los Angeles-area refinery closure was California Assembly Bill X2-1 (ABx2-1), signed into law by Governor Gavin Newsom on October 14, 2024. This bill empowers the California Energy Commission to: • Require refiners to maintain minimum inventory levels of refined fuel (like gasoline) and blending components. • Mandate resupply plans for planned maintenance outages (submitted 120 days in advance, with potential hefty daily fines for non-compliance). • Aim to prevent supply shortages that lead to price spikes at the pump. Just 48 hours later (on October 16, 2024), Phillips 66 announced it would cease operations at its Wilmington/Carson refinery complex by Q4 2025. Many critics (including industry groups and Republicans) pointed to the timing as evidence that this added regulatory burden made operations unsustainable, essentially prompting Phillips 66 to say “adios.” The company officially cited “long-term uncertainty and market dynamics” (declining demand, high costs, imported crude reliance), and its CEO later clarified it wasn’t an immediate response to the bill—but the proximity fueled the narrative that California’s regs tipped the scales.