Two upcoming refinery shutdowns in California have raised concerns about tighter supplies and higher gasoline prices in the near future.
But Kinder Morgan and Phillips 66 have proposed a new pipeline project that would bring fuel to western states such as Arizona and allow more oil production in California to stay in the Golden State so that additional gasoline would be available to Southern California markets, including San Diego.
The two Houston-based companies recently announced plans for the Western Gateway Pipeline that, if built, would be the first-ever pipeline system to deliver motor fuels into California, a state often described as a fuel island disconnected from refining hubs in the U.S.
The Western Gateway Pipeline system would use a combination of existing infrastructure plus new construction to establish a corridor for refined products stretching 1,300 miles from St. Louis to California.
In a news release, Phillips 66 said the project “addresses growing Arizona demand and anticipated California supply constraints.”
The Western Gateway Pipeline would include building a line from the Texas Panhandle town of Borger to Phoenix. Meanwhile, the flow on an existing pipeline that currently runs from Southern California to Arizona would be reversed, allowing more fuel to remain in California.
The entire pipeline system would link refinery supply from the Midwest to Phoenix and California, while also providing a connection into Las Vegas.
In an email to the Union-Tribune, a spokesperson for Kinder Morgan said there are no plans for the project to construct any new pipelines in California and “should put downward pressure” on prices at the pump.
“With no new builds in California and using pipelines currently in place, it’s an all-around win-win — good for the state and consumers,” Kinder Morgan’s director of corporate communications Melissa D. Ruiz said in an email.
If completed, how much could the project affect prices at the pump for drivers in San Diego and Southern California?
“It’s a little too soon to tell,” said David Hackett, president of Stillwater Associates, a transportation energy consulting company in Irvine.
But he predicted the project would boost inventory in California and reduce the state’s reliance on shipments from foreign countries, especially if an international fuel crisis occurred.
“It brings additional supply into the market,” said Hackett, whose firm earlier this week released a report analyzing the project. “That’s the bottom line.”
Some 63.5% of oil supplied to California refineries in 2024 came from foreign sources, led by Iraq, Brazil, Guyana and Ecuador, according to the California Energy Commission.
News of the project comes on the heels of pending closures at a pair of California refineries.
In 2025, Phillips 66 announced the shuttering of its twin Southern California facilities in Carson and Wilmington by the end of this year. A few months later, Valero said it will shut down its 145,000-barrel-per-day refinery in the Northern California city of Benicia by the end of April 2026.
The Valero and Phillips 66 facilities combine to account for about 18% of the state’s crude oil capacity, leading fuel analysts to raise concerns that the shutdowns will strain supplies of the specially blended gasoline that is sold to California drivers.
Drivers in the Golden State already pay more for gasoline than anywhere else in the country, including Alaska and Hawaii. According to AAA, the average price for a gallon of regular in California stood at $4.576 on Thursday, compared to the national average of $3.038.
The Union-Tribune sent emails to Gov. Gavin Newsom’s office and the California Energy Commission, asking for reaction to the Phillips 66-Kinder Morgan pipeline project but did not receive responses.
Newsom accused oil companies and refiners of “lying and gouging Californians to line their own pockets” after gasoline prices spiked to more than $6 a gallon across California in late summer and early fall of 2022 and 2023.
But in the aftermath of the pending Phillips 66 and Valero closures, Newsom directed the California Energy Commission and other agencies to “redouble the state’s efforts to work closely with refiners” and “reinforce the state’s openness to a collaborative relationship” with the industry.
Energy commission vice chair Siva Gunda responded in late June with a 24-page letter to the governor that included a series of recommendations, many of which were part of legislation passed in Sacramento and signed into law by Newsom on Sept. 19.
Senate Bill 237, for example, included provisions aimed at increasing crude oil production in the state and eased permitting requirements in the Bakersfield area, the heart of California’s Oil Patch.
“We are all the beneficiaries of oil and gas. No one’s naive about that,” Newsom said at a press conference in August. “So it’s always been about finding a just transition, a pragmatism in terms of that process.”
The Western Gateway Pipeline is not a done deal.
Kinder Morgan and Phillips 66 announced what’s called “open season” that will run until Dec. 19 to field questions and gauge what kind of interest the project has for potential shippers and investors. The proposal also has receive permits and clear other regulatory hurdles.
A Western Gateway website says the new construction between the Texas Panhandle and Arizona will be done in an “environmentally responsible manner” and minimize its footprint on habitats, wetlands, farmlands and historical cultural sites.
But Sandy Bahr, director of the Grand Canyon chapter of the Sierra Club, told the Arizona Republic, “We should be weaning ourselves off of gasoline and investing in alternative transportation.”
Phillips 66 will be in charge of constructing the pipeline and Kinder Morgan will be responsible for operating it. If given the green light, Western Gateway is expected to be completed by 2029.
