The Phillips 66 Santa Maria Refinery in southern San Luis Obispo County will close in 2023, bringing a huge loss to the once thriving Central Coast oil industry.
On Wednesday, Phillips announced 66 plans to close the refinery located off Highway 1 in rural Arroyo Grande, as those familiar with the local sector said they were trying to analyze the impact on existing operations and future projects, but expected a significant wrinkle effect.
Phillips plans to convert a Bay Area facility into the largest sustainable fuel plant.
One day after the announcement, the company withdrew its application for a pipeline replacement project submitted to the Energy Department of Santa Barbara County Planning.
In addition, the difficult closure is likely to lead to a re-evaluation of an interim oil freight project related to the restart of drilling operations for the offshore oil platforms.
“This announcement could have really broad implications in the state and in our region,” said Linda Krop of the Environmental Defense Center.
The refinery has been the recipient of oil extracted from the Central Coast by existing producers, who now have to find a destination for the product.
Oil drilling projects have attracted strong supporters, who have favored jobs, and opponents, who are afraid of various environmental effects.
The Santa Maria Refinery, set to close in 2023, has operated for nearly 60 years on 1,780 acres in rural Arroyo Grande. The facility processes about 44,500 barrels, or 1.9 million gallons, of crude oil per day. (Janene Scully / Noozhawk photo)
The Santa Maria Refinery on 1,780 acres has been operating for nearly 60 years and processes about 44,500 barrels, or 1.9 million gallons, of crude oil per day. The facility employs 140 full-time Phillips 66 employees along with specialized contractors on site.
The refinery converts heavy crude oil, typically arriving via Central Coast pipeline, into a quality feedstock for further processing into petrol, diesel and jet fuel, according to Phillips 66.
As part of the closure of the refinery, Phillips said associated rudimentary pipelines will be taken out of service in phases beginning in 2023.
“Until the pipelines are taken out of service, we will continue to operate these assets and operate to our high standards of corporate excellence and in compliance with regulatory requirements,” said Phillips 66 representative Joe Gannon.
Phillips 66 wasted no time in withdrawing the application to replace and relocate segments of the existing Line 300 piping system in the counties of Santa Barbara and San Luis Obispo. It aimed to replace about 35 miles of pipeline.
The proposal has remained in the environmental analysis phase, according to Santa Barbara County planning staff.
Another project in the works involved the ExxonMobil application to allow trucks, approximately 70 days, to collect oil collected from offshore platforms at Gaviota and transport raw materials to Phillips 66 facilities in Santa Maria or Kern County .
County staff have recommended that the trucks travel only to the Santa Maria Refinery to reduce potential environmental impact. That would have kept the trucks traveling along narrow Highway 166.
Hearings before the Santa Barbara County Planning Commission were set for Sept. 2 and Sept. 9, but surveillance planner Errin Briggs said those dates are now in doubt due to significant changes brought about by the Phillips 66 announcement.
Environmental groups recalled ExxonMobil’s trucking plan.
“ExxonMobil’s proposal was poorly understood from an environmental and climate justice point of view, and now it is not appropriate in light of Phillips’ plans to convert its refinery into sustainable fuels. There’s now even less reason for ExxonMobil to endanger our coastline and communities, “said Linda Krop, chief advocate for the Environmental Defense Center, which represents Get Oil Out !, and the Santa Barbara County Action Network.
A few years ago, the Santa Maria Refinery suffered a setback in expanding its operations when San Luis Obispo County rejected a planned railroad crossing so trains could bring oil to the site. Neighbors and environmental groups had strongly opposed the proposal.
The announcement of the closure of Santa Maria Refinery occurred when the company announced plans to configure its San Francisco Refinery in Rodeo to produce sustainable fuels by 2024. The Rodeo site in Contra Costa County received the semi-refined products from ‘ the Central Coast facility to become manufactured petroleum products.
Instead of producing fuels from crude oil, the facility would instead use fuels from used cooking oil, fat, fats and soybean oil under a project called Rodeo Renewed.
“Phillips 66 is taking a major step with Rodeo renewal to support the demand for sustainable fuels and help California meet its low-carbon goals,” said Phillips 66 chairman and CEO Greg Garland.
The Phillips 66 Rodeo renewal project would produce 680 million gallons annually from renewable diesel, sustainable gasoline and sustainable jet fuel, Phillips officials said in a statement.
“Providing the people of California and the West with safe, affordable and reliable energy now and in the foreseeable future requires that we have a mix of petroleum, natural gas and renewable fuels,” said Catherine Reheis-Boyd, president of the Western States Petroleum Association. “Our sector is doing what it has always done – innovating and leading the way to a future for energy efficiency.”
– Noozhawk North County editor Janene Scully is reachable . (JavaScript must be enabled to view this email). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews en @NoozhawkBiz. Connect with Noozhawk on Facebook.
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