Phillips 66 closing its Nipomo Mesa refinery. What will happen to the workers?
Phillips 66 is shutting down its Santa Maria Refinery facility on the Nipomo Mesa as it pivots to renewable fuels, but it’s unclear what will happen to the facility’s 110 employees.
The oil company announced plans on Thursday to shutter the local facility, as well as its Rodeo Carbon Plant in Northern California in 2023. According to a news release, associated oil pipelines for the plants will also be phased out starting that year.
The news comes on the same day that the company announced plans to transform its San Francisco refinery in Rodeo, in the East Bay Area near Vallejo, into the world’s largest renewable fuels plant.
The new plant will no longer produce fuels from crude oil, but instead would make fuels from used cooking oil, fats, greases and soybean oils, according to a news release.
According to the release, the Santa Maria Refinery is currently part of the Phillips 66 San Francisco Refinery and supplies Rodeo with oil via a 200-mile pipeline.
Jim Anderson, the refinery’s maintenance superintendent, said the decision to shutter the facility now had to do with drastically changing market conditions of the past 10 years that made it inadvisable to continue operating.
“It’s just not economically viable to run the Santa Maria Refinery,” Anderson said.
The refinery employs about 110 full-time staff, as well as between 40 and 50 contractors at any one time, according Anderson.
Those people will all continue to be employed by Phillips 66 through the next few years, Anderson said.
As 2023 approaches, the company will search for ways to provide new positions at other facilities for those impacted by the closure.
“One great thing about the announcement is we have time,” Anderson said. “We have the rest of 2020, 2021, 2022 and into 2023 to transition, not just the physical facility, but also our employees. They’ll have their jobs here until that time.”
“Our hope is to provide opportunities for everyone who wants them,” he added.
What will happen to the Santa Maria Refinery land?
The Santa Maria Refinery has been open on the Nipomo Mesa — sometimes identified as rural Arroyo Grande — for nearly 60 years, according to its website.
The refinery process about 44,500 barrels of crude oil per day. The oil is brought into the facility by pipeline from suppliers around the Central Coast and then sent to the refining facility in Rodeo for finishing, according to the website.
Of the 1,780 acres that make up the refinery, about 200 acres are used for company operations, according to the website. The rest is open space or cattle grazing land.
As the closing date approaches, the company will begin demolishing the facility to “return (it) as closely back to the natural state we can,” Anderson said.
A plan for what will happen with the land after the refinery closes will be formed after the property has been assessed, Phillips 66 media representative Joe Gannon told The Tribune on Thursday.
Did rail-spur denial impact refinery closure decision?
In 2017, the San Luis Obispo County Board of Supervisors upheld a Planning Commission decision denying an application by Phillips 66 to build a 1.3-mile rail spur. The rail spur would have allowed the company to transport 6.6 million gallons of crude oil a week by rail to the local refinery.
At the time, the company claimed the project would help fill a supply gap at the refinery that was resulting in less oil production and as a result, fewer contractors and employees.
The proposed project was met with intense pushback from environmentalists and residents concerned about the safety of oil-by-rail.
Phillips 66 sued the county following the permit’s denial, but agreed to a settlement in October 2017.
When asked if the project’s denial played a role in the decision to shutter the refinery, Anderson said Thursday that it was “really just the changing market conditions.”
“(They) all worked together economically to make it no longer economically viable,” he said.
SLO County reacts to closure news
Fourth District Supervisor Lynn Compton said she was surprised by the news of the closure on Thursday and worried about the loss of high-paying jobs in the area.
“It’s huge in my district,” she said. “This is one industry that we have in Nipomo where local individuals can work where they live, and it’s a high-paying job. ... We just don’t have that in South County.”
Given the current economy and the difficulties associated with the coronavirus pandemic, Compton said she couldn’t picture any businesses coming in to easily replace those lost jobs.
“To get an industry in like that, I don’t know how you make that up,” she said. “I can’t think of anything that could come in and replace 100 workers and pay them $100,000 and move them to SLO County. ... They’re moving out, not moving in. You have to overcome that too.”
“It’s an uphill battle,” she added.
Assemblyman Jordan Cunningham, R-San Luis Obispo, on Thursday said the closure highlighted the need to diversify and grow the local economy.
“The Central Coast has the opportunity to be a national leader in growth industries like offshore wind and aerospace,” he said in a statement to The Tribune. “I am hopeful that, by the time the plant closes in 2023, the impacted workers will be able find new employment here on the Central Coast.”
How does the closure impact ExxonMobil’s offshore oil plan?
ExxonMobil recently announced plans to revive its offshore oil production off the Santa Barbara County coastline, a plan that required the Phillips 66 pump station at the Santa Maria Refinery.
The company said it hoped to begin a “phased restart” of its Santa Ynez Unit, trucking about 470,400 gallons per day from its Gaviota Coast facility to either the Phillips 66 refinery or one in Kern County.
Now that the local refinery is closing, the future of this plan is unclear.
ExxonMobil media relations adviser Julie King said the company is evaluating how the closure news would impact its proposal, and declined to share further details at this time.
The plan has drawn criticism from environmentalists, with some on Thursday urging ExxonMobil to abandon its offshore drilling plans.
“This is great news for California communities, motorists and wildlife threatened by ExxonMobil’s dangerous oil trucking plan,” oceans legal director at the Center for Biological Diversity Kristen Monsell said in a news release Thursday evening. “Exxon should follow Phillips 66’s lead and end its dirty energy operations on California’s Central Coast.”
She added: “With the oil industry reeling, it’s time to end offshore drilling along this beautiful, bountiful coastline, not revive it.”
This story was originally published August 13, 2020 at 12:55 PM.
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