California oil workers face an uncertain future in the state’s energy transition

SACRAMENTO, Calif. – Thirty years ago, Willie Cruz was shocked when he learned the Southern California oil refinery where he worked was shutting down.

Cruz, now a 61-year-old living in Arizona, had spent five years working in the environmental department when Powerine Oil Company said it would close the plant in Santa Fe Springs, southeast of Los Angeles.

Cruz feared getting laid off again if he stayed in the industry. He decided to look into respiratory therapy, in part because he’s asthmatic. A federal job training program paid for his schooling.

“I thought it was pretty cool, you know — go from polluting to helping, right?” Cruz said.

Now he’s advising his son, Wilfredo Cruz, as the Phillips 66 refinery in Los Angeles where the 37-year-old has worked for 12 years plans to close by the end of the month.

Thousands — perhaps tens of thousands — of workers could lose jobs in the coming years as California tries to reduce its reliance on fossil fuels. Energy company Valero said earlier this year it would close a refinery in the Bay Area.

California’s leading Democrats are grappling with how to confront lost jobs and high gas prices that the oil industry says are the result of the state’s climate policies.

State energy regulators are negotiating to keep the Valero plant open and recently backed off a proposal to penalize oil companies for high profits, while Democratic Gov. Gavin Newsom signed legislation to speed oil well permitting in the Central Valley. That action came after years of Newsom declaring he was “taking on big oil.”

That inconsistent messaging has left the industry’s workers unsure of what the future holds.

Refinery closures

California was the eighth-largest crude oil producer in the nation in 2024, down from being the third-largest in 2014, according to the U.S. Energy Information Administration. The Valero and Phillips 66 refineries set to close account for roughly 18% of California’s refining capacity, according to state energy regulators. They both produce jet fuel, gas and diesel.

The Phillips 66 refinery will start shutting down this month and end active fuel production at the end of 2025, the company said. The closure is based on multiple factors and “in response to market dynamics,” Phillips 66 said.

The announcement came after Newsom signed a law last year aimed at preventing gas price spikes that allows energy regulators to require that refineries keep a certain amount of fuel on hand to avoid shortages when they go offline for maintenance. But the company said its decision was unrelated to the law.

Phillips 66 said it is “committed to treating all our refinery workers fairly and respectfully throughout this process.”

Valero announced plans to “idle, restructure or cease refining operations” at its refinery in the Bay Area city of Benicia by the end of April. The company didn’t respond to emails seeking comment on the status of its plans.

Valero pays about $7.7 million annually in taxes to the city, making up around 13% of Benicia’s revenues, City Manager Mario Giuliani said.

“It’s a significant and seismic impact to the city,” he said of the planned closure.

Forty-six oil refineries in California closed between 2018 and 2024, according to the state’s Employment Development Department. The fossil fuel industry employs roughly 94,000 people in the state, according to the Public Policy Institute of California.

One study estimated that the state would lose nearly 58,000 workers in the oil and gas industries between 2021 and 2030. About 56% of those workers will have to find new jobs because they are not retiring, according to the 2021 report by the Political Economy Research Institute at the University of Massachusetts Amherst.

Supporting displaced workers

Lawmakers approved the Displaced Oil and Gas Worker Fund in 2022 to help workers receive career training and connect with job opportunities. The state has since awarded nearly $30 million overall to several groups to help workers across the state — from oil-rich Kern County to Contra Costa County in the Bay Area.

But the funding is set to run out in 2027, and state lawmakers wrapped up their work for the year without an agreement on whether to extend it.

Newsom spokesperson Daniel Villaseñor said the governor is committed to supporting displaced oil workers “and affected communities in transitioning into new and emerging jobs and economic opportunities.”

Newsom approved $20 million in the state’s 2022-2023 budget for a pilot program to train workers in the industry who’ve lost their jobs to plug abandoned oil wells in Kern and Los Angeles counties.

California needs a clear plan for workers who will lose jobs because of the state’s energy transition, said Faraz Rizvi, the policy and campaign manager at the Asian Pacific Environmental Network.

“We’re in solidarity with workers who have been displaced and who are looking for a relief to ensure that they’re able to find work that is important for their communities,” Rizvi said.

But Jodie Muller, president and CEO of the Western States Petroleum Association, said the state can protect jobs by changing its climate policies.

“The extremists fighting to close California refineries should explain why they are OK with destroying some of the best blue-collar jobs out there — because we certainly are not,” she said in a statement.

Life as an oil worker

For many workers, the industry offers an opportunity to earn a living wage without a college degree.

Wilfredo Cruz was attracted in part by the paycheck. After more than a decade, he makes a base salary of $118,000 a year as a pipe fitter at the Phillips 66 refinery.

But there are downsides.

Every day when Cruz gets home from work, he showers immediately to try to shield his son from exposure to any harmful chemicals. He also never lets the 2-year-old ride in the car he takes to work.

Now he’s enrolled in an online cybersecurity training course, schooling paid for by the state program that’s set to expire in the next couple of years.

“There’s not really a real clear plan to be able to get workers from this oil industry into these new fields,” he said. “So, you feel kind of forgotten.”