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Phillips 66 will shut historic Wilmington-area refinery complex

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Phillips 66 will shut historic Wilmington-area refinery complex

Phillips 66 announced Wednesday that it will shut its historic Wilmington-area oil refinery complex but will work with the state to continue supplying fuel to consumers.

The refinery near the Port of Los Angeles will cease operations in the fourth quarter of 2025, with the company saying it will replace its output with sources “inside and outside its refining network” and with renewable diesel and sustainable aviation fuels from a San Francisco Bay-area complex. The refinery contributes about 8% of the state’s gasoline supply.

“Phillips 66 remains committed to serving California and will continue to take the necessary steps to meet our commercial and customer demands,” said Mark Lashier, chairman and chief executive of Phillips 66. “We understand this decision has an impact on our employees, contractors and the broader community. We will work to help and support them through this transition.”

About 600 employees and 300 contractors currently operate the refinery, the company said.

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The refinery complex consists of two facilities linked by pipeline located five miles apart in Wilmington and Carson, about 15 miles southeast of Los Angeles. The Carson facility was built in 1923 and the Wilmington facility was built in 1919, according to the company’s website.

“There’s no question we are going to lose refineries over time, because demand is going to go down as we transition to electric vehicles, but I did not expect to see any of them exiting this quickly,” said Severin Borenstein, faculty director of the Energy Institute at UC Berkeley’s Haas School of Business.

California “over the medium term” will now have to rely more on imports, he said. “I think part of the response the state’s going to need to consider is how to make sure that we can import sufficient gasoline to meet our needs.”

In announcing the closure, Phillips 66 said that the “long-term sustainability of our Los Angeles Refinery” was “uncertain and affected by market dynamics.” However, the closure immediately became a political football, with Republicans and gas station operators blaming the policies of California Gov. Gavin Newsom.

The announcement comes the same week the governor signed a new state law that allows the state to require oil refiners to maintain a minimum inventory of fuel to avoid supply shortages that create higher gasoline prices. It also authorizes the California Energy Commission to require refiners to plan for resupply during refiner maintenance outages.

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“Thanks to Gavin Newsom’s showboating and incompetence, hundreds of workers will lose their jobs while California drivers will face a massive price hike,” Assembly Republican Leader James Gallagher of Yuba City said in a statement. “Great work, Gavin.”

The California Fuels and Convenience Alliance, an industry trade group representing fuel marketers, gas station owners and others, directly blamed the legislation.

“Unfortunately, the announcement today is not much of a surprise, as we continually warned the Legislature and Administration about how ABX2-1 would negatively impact supply,” said Alessandra Magnasco, the alliance’s governmental affairs and regulatory director. “This is exactly what happens when our leaders are more concerned with political theater than solving real problems.”

The association blamed higher gas prices on “exploding overhead costs to run our stations, costly environmental regulations.”

However, a spokesperson for Phillips 66 told Politico the announcement was not in response to Newsom’s signing the law.

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The governor’s office referred questions to the California Energy Commission.

“The company has committed to minimizing impacts on Californians while they continue to meet fuel demands, maintain reliable supplies, and ensure they take necessary steps to fulfill both commercial and customer needs,” California Energy Commission Vice Chair Siva Gunda said in a statement.

Phillips 66 said it has has engaged Catellus Development Corp. and Deca Cos. to examine future uses for the 650-acre site.

“Historically, the South Bay industrial real estate market has been extremely tight and this will allow a ton of new inventory and capacity that should help the market by providing more warehouse and distribution space” around the Port of Los Angeles, said real estate broker Mike Condon Jr. of Cushman & Wakefield, who helped manage the process of selecting a development partner for Phillips 66.

The company, based in Houston, also has been the subject of controversy over its role in climate change, leading to calls for the removal of its iconic “76” sign at Dodger Stadium.

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In the second quarter, Phillips 66 posted net income of $1.02 billion, down 40% from the same period a year ago. Shares have dropped 17% in the last six months. They closed Wednesday at $132.31, up nearly 1%.

Times staff writer Roger Vincent contributed to this report.

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Wildfires Will Deepen Housing Shortage in Los Angeles

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Wildfires Will Deepen Housing Shortage in Los Angeles

Each of the homes burned in the Los Angeles fires is its own individual calamity.

Collectively, the losses — whether in the hundreds or, as is far more likely, in the thousands — will weigh on the city’s already urgent housing shortage.

Fires are still raging, and with 180,000 people under evacuation orders as of Thursday morning, the degree of displacement in the city and its surrounding areas will take time to assess. For the time being, evacuees are holing up in public shelters in Los Angeles County, with friends or family members or in hotels.

But in the coming weeks and months, people whose homes are gone will have to find more stable accommodations while they rebuild. That will not be easy in a metro area that, as of 2022, already had a shortage of about 337,000 homes, according to data from Zillow. The number of homes on the market in Los Angeles was 26 percent below prepandemic norms as of December, according to Zillow.

“One of the biggest challenges ahead will be getting people who lost their homes into permanent, long-term housing,” Victor M. Gordo, the mayor of Pasadena, said on Wednesday. Pasadena, which is battling the Eaton fire, has already lost hundreds of homes.

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The area’s tight rental market is likely to become further strained as many of the thousands of displaced residents turn to rental units, while figuring out their next move. The median rent for a one-bedroom apartment in Los Angeles, as of Jan. 7, was more than $2,000, according to Zillow.

“You’re going to have a positive shock in demand, and a negative shock in supply, so this automatically means prices go up in the rental markets,” said Carles Vergara-Alert, a professor of finance at IESE Business School in Barcelona, who has studied the effects of wildfires on housing markets.

Any uptick in rental costs would affect tenants across the region, beyond those displaced by the fires, Dr. Vergara-Alert said.

Jonathan Zasloff, who lost his home in Pacific Palisades this week, teaches land use and urban policy at the University of California, Los Angeles law school, and is acutely aware of how his search for interim housing could affect the broader market.

Dr. Zasloff is staying with his brother for the time being, while a friend is putting up his wife and daughter. They evacuated their house, which they had lived in for almost 15 years, around noon on Tuesday, before the official evacuation order was issued for the area. That evening, Dr. Zasloff realized the severity of the crisis when he was watching television and saw a reporter standing on his fire-ravaged block.

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His insurance agent told him it could take two to three years to rebuild his house. His family might try to find a rental in West Los Angeles near UCLA in the meantime, he said.

There aren’t many rentals in that part of the city, Dr. Zasloff said, so students and other renters could be displaced as he, and people like him who lost their homes, move in.

“It’s very possible that this event is going to cause a big increase in homelessness, even though the people who got pushed out of their homes are people of means,” he said.

California has been in the grip of an affordable housing crisis for a decade. Both state and local lawmakers have passed a raft of new laws that aim to make housing cheaper and more plentiful by making it easier to build. In Los Angeles, for instance, Mayor Karen Bass signed an executive order that streamlines permitting for projects in which 100 percent of the units are affordable. In response to state housing reforms, there has been a boom of backyard homes — called accessory dwelling units, or A.D.U.s — that homeowners often rent out for extra income and that have added to the housing stock.

Still, both the city and state remain well behind their housing production goals, and affordability has only continued to erode. The number of apartment units approved by the city of Los Angeles, for example, dipped to a 10-year low in 2024, according to data from the Los Angeles Department of Building and Safety compiled by Crosstown LA, a news site. That downturn in building permitting has raised concern about roadblocks to new housing unit creation.

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“This is a place that had massive affordability challenges last week, and after this week it’s going to be that much more challenging,” said Dave Rand, a land-use lawyer at Rand Paster & Nelson in Los Angeles, who also serves on the board of directors of a statewide affordable housing organization.

After the fires are extinguished and the recovery begins, Mr. Rand said, there is hope that the common cause of rebuilding can be a catalyst for tackling affordability challenges by continuing to make it easier to build housing, particularly affordable rental housing, at a faster pace.

“This is such a devastating event that hopefully it rocks the system to the point where we can get real reform,” he said.

The Los Angeles City Council has aimed to build nearly half a million new units by 2029. But many people trying to rebuild all at once after the fires could lead to higher costs, and slow down the overall production of housing, said Jason Ward, a co-director of the center on housing and homelessness at the RAND Corporation.

A longstanding construction labor shortage in Los Angeles does not help. Andy Howard, a general contractor who has worked across the city for three decades, including in the areas affected by the fires, said many of the subcontractors he work with in the past have left California since the pandemic. And there are not enough young people entering the industry.

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The fires are “going to make it worse,” Mr. Howard said. “It’s going to drive the cost up, for sure.”

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For Hollywood workers, L.A. fires are the latest setback as productions halt

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For Hollywood workers, L.A. fires are the latest setback as productions halt

As the market for documentaries and other content slowed and work dried up in Hollywood, producer Kourtney Gleason was already worried about making the mortgage payments on the home she bought last year with her boyfriend.

Now, as raging fires have halted film and TV production in Southern California and many in the industry have lost homes, she’s terrified that the entertainment business will be set back yet again. Though she’s been in the industry for 12 years, Gleason is now reluctantly looking at restaurant jobs to get by.

“The industry in the town is so fragile that every little thing becomes a bigger bump in the road,” she said. “Another bump that will push things back from getting ramped up.”

The destruction of the fires only compounds the difficult lot for many of Hollywood’s workers. Still reeling from the pandemic, they faced financial hardship during the dual Hollywood labor strikes in 2023, then were hit with a sustained slowdown in film and TV production that has driven many to rethink their careers in the industry.

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“A lot of the below-the-line workers were already under an incredible amount of pressure,” said Kevin Klowden, executive director of the Milken finance institute. “For Hollywood workers, it becomes one more blow.”

The sheer scope of the region’s multiple fires means that nearly every echelon of Hollywood has been hard hit.

The Palisades fire, which has burned more than 17,200 acres and destroyed numerous homes, businesses and longtime landmarks in the Pacific Palisades area, is home to many Hollywood stars, studio executives and producers. Actors such as Billy Crystal and Cary Elwes lost homes in the blaze.

Across the region, the Eaton fire has now burned at least 10,600 acres in the Pasadena and Altadena areas and destroyed many structures. The San Gabriel Valley is home to many of the industry’s more modest or middle-class workers, who were already financially harmed by the production slowdown and relocation of shoots to other states or countries.

The fires could rank as one of the costliest natural disasters in U.S. history. A preliminary estimate calculated by AccuWeather, the weather forecasting service, put the damage and total economic loss at $52 billion to $57 billion, which could rise if the fires continue to spread. J.P. Morgan on Thursday raised its expectations of economic losses to close to $50 billion.

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Many affected homeowners reported the insurers had dropped their policies, as some of the biggest insurers have stopped writing or renewing policies in high-risk coastal and wildfire areas. The complications with fire insurance, combined with the region’s problems with housing affordability and supply, will only be exacerbated by these fires, Klowden said, leading some to reconsider whether they can stay in California.

“It adds up,” he said. “How many more people decide they can’t afford to stay?”

Hollywood workers had been holding onto hope that 2025 would be a better year for work, perhaps closer to the levels they saw before the pandemic.

But with yet another disaster, “it feels like it’s just another weight that’s been placed,” said Jacques Gravett, a film editor who has primarily worked in television on such shows as “Power Book IV: Force” on Starz and “13 Reasons Why” on Netflix.

Gravett was out of work for 13 months between the pandemic and the strikes, and said he’s concerned about how already struggling workers will be able to absorb the financial blow from the fires.

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“At least when you’re working and something happens, you have resources to get you by, and a lot of people don’t have the resources now,” said Gravett, who is co-chair of the Motion Picture Editors Guild’s African-American steering committee. “Now we’re faced with another tragedy for those who’ve been displaced. What do you do?”

The effect of the fires on industry workers could give lawmakers a push to approve Gov. Gavin Newsom’s proposed increase to the state’s film and TV tax credit program, which aims to lure production back to California and increase jobs in the Golden State, Klowden said.

“Right now, the industry desperately is waiting on the incentives to be expanded,” he said.

In the near term, discussions about new projects are already hitting a wall. Gary Lennon, showrunner of various “Power” spinoffs, including “Force,” said an agent told him there will likely be a temporary pause before anyone wants to talk about new ideas.

“Buyers and meetings for pitches being sold will take a hit for a moment,” Lennon said. “People are focused on what is immediately happening in front of them.”

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Even before the fires, he said he was already getting two to three calls a week from production designers, editors, costume designers and others looking for work.

But once the industry is ready to ramp back, he said he thinks it will move quickly.

“So much has happened recently, I think production will start right away again because people do need to work,” Lennon said. “And that’s a good thing.”

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Paul Oreffice, a Combative Chief of Dow Chemical, Dies at 97

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Paul Oreffice, a Combative Chief of Dow Chemical, Dies at 97

Paul F. Oreffice, who as the pugnacious head of Dow Chemical grew and diversified the company at the same time that he rebuffed Vietnam veterans over Agent Orange, argued that the chemical dioxin was harmless and oversaw the manufacturing of silicone breast implants that were known to leak, died on Dec. 26 at his home in Paradise Valley, Ariz. He was 97.

His family confirmed his death.

Mr. Oreffice (pronounced like orifice) spoke in staccato, fast-paced sentences, and they were often deployed in pushing back against environmentalists, politicians and journalists during an era, the 1970s and ’80s, when the environmental movement was gaining force by focusing on toxic chemicals in the air and water.

Under his 17-year leadership, which included the titles of president, chief executive and chairman, Mr. Oreffice weathered intense controversies.

His public relations instinct was for confrontation, not conciliation. He had an intense dislike for what he perceived as government meddling in business, which he traced to his having grown up in Italy under Mussolini. “I’ve seen what overgoverning can do,” he told The New York Times in 1987. “I was born under a Fascist dictatorship, and my father was jailed by it.”

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Mr. Oreffice took the reins of the Dow USA division in 1975, when its public image was tainted from campus protests of the 1960s that had vilified the company as a maker of the incendiary agent napalm, which was widely used in Vietnam.

When Dow pulled out of apartheid South Africa in 1987 under pressure from shareholders, Mr. Oreffice said: “I’m not proud of it. I think we should have stayed and fought.”

In 1977, when Jane Fonda lacerated Dow in a speech at Central Michigan University, not far from Dow headquarters, in Midland, Mich., Mr. Oreffice canceled the company’s donations to the school, writing its president that he could not support Ms. Fonda’s “venom against free enterprise.”

Instead, Mr. Oreffice financed the campaigns of anti-regulation politicians. And he sued the Environmental Protection Agency for surveilling Dow’s sprawling Midland plants from the air when the company refused an on-site inspection.

The case made its way to the United States Supreme Court, which in 1986 ruled against the company, at the time the No. 2 American chemical maker after DuPont. (The companies merged in 2017, then split into three companies.)

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In 1983, Rep. James H. Scheuer, Democrat of New York, disclosed that Dow had been allowed to edit an E.P.A. report on the leakage of dioxin, one of the most toxic substances ever manufactured, from the Midland plants into the Tittabawassee and Saginaw Rivers and Saginaw Bay.

E.P.A. regional officials told Congress that their superiors in the Reagan administration ordered the changes to comply with demands made by Dow. Mr. Oreffice, appearing on NBC’s “Today” show, offered a sweeping dismissal.

“There is absolutely no evidence of dioxin doing any damage to humans except for causing something called chloracne,” he said. “It’s a rash.”

His statement brushed aside evidence that dioxin was extremely hazardous to laboratory animals and had been shown in some research to be linked with a rare soft-tissue cancer in humans.

One former Dow president, Herbert Dow Doan, a grandson of the company founder, told a public relations publication, Provoke Media, in 1990 that Mr. Oreffice’s style was not one fine-tuned to mollify critics. “The reason is part ego, part pride,” he said. “Paul is inclined to push his line to the point where some people say he is arrogant.”

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There is no question that Mr. Oreffice’s strength of will also uplifted Dow’s businesses, which through the 1970s were overly dependent on basic chemicals like chlorine. When a glut of low-priced petrochemicals flooded the global market in the early 80s, he aggressively reshaped Dow by diversifying into consumer products, such as shampoos and the cleaning fluid Fantastik, and by moving into foreign markets. By 1987, Dow posted a record profit of $1.3 billion (about $3.5 billion in today’s currency).

At the same time, a class-action lawsuit on behalf of 20,000 Vietnam veterans and their families against Dow and other makers of Agent Orange was further tarnishing the company’s image. The suit, filed in 1979, charged that dioxin in Agent Orange led to cancer in combat veterans and genetic defects in their children.

Dow argued that it had made Agent Orange at the request of the government and was not responsible for how it was used. But in 1984, the company and other makers of Agent Orange, without admitting liability, settled the lawsuit for $180 million, with the proceeds going to veterans and their families.

In another controversy, Dow Corning, a joint venture between Dow Chemical and Corning Inc., released documents in February 1992 showing that it had known since 1971 that silicone gel could leak from breast implants it made.

Tens of thousands of women had sued the company, claiming their implants had given them breast cancer and autoimmune diseases. Dow Corning agreed to a $3.2 billion settlement after the company had been driven to file for bankruptcy protection.

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In 1999, an independent review by an arm of the National Academy of Sciences concluded that silicone implants do not cause major diseases.

Paul Fausto Orrefice was born Nov. 29, 1927, in Venice. His parents, Max and Elena (Friedenberg) Oreffice, moved the family to Ecuador in 1940 as Mussolini declared war on Britain and France. Paul came to the U.S. in 1945, entering Purdue University with fewer than 50 words of English at his command.

He graduated with a B.S. in chemical engineering in 1949, became a naturalized citizen, and after two years in the Army went to work for Dow in 1953.

“When I walked into Midland, Mich., this was ‘WASP’ country, and I was a ‘W’ but I wasn’t an ‘ASP,’” he told The Washington Post in 1986. “I spoke with an accent and combed my hair straight back, which just wasn’t done.”

Mr. Oreffice represented Dow in Switzerland, Italy, Brazil and Spain before being called back to the Midland headquarters in 1969 and appointed the company’s financial vice president. He became president of Dow Chemical U.S.A. in 1975 and was then promoted to president and chief executive of the parent Dow Chemical Company in 1978. In 1986, he added the title of chairman.

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To the astonishment of many observers, Dow poured millions of dollars in the mid-1980s into a public-relations campaign to improve its image, including a new slogan, “Dow let’s you do great things.”

Under company rules, when he reached age 60, Mr. Oreffice stepped down as president and chief executive in 1987. He retired as chairman in 1992.

He is survived by his wife of 29 years, Jo Ann Pepper Oreffice, his children Laura Jennison and Andy Oreffice, six grandchildren and one great-granddaughter.

In retirement, Mr. Oreffice pursued a passion for thoroughbred racehorses, investing in Kentucky Derby starters and spending summers at a home in Saratoga Springs, N.Y. He was a partner in a Preakness Stakes winner, Summer Squall, and a Belmont Stakes winner, Palace Malice.

In 2006, he published a memoir about rising from an immigrant with little English to a corporate titan, titling it “Only in America.”

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