The moment Phillips 66 quietly shut down its Los Angeles refinery in December 2024, the shockwave didn’t stop at California’s border. One announcement. One stroke of a pen. And suddenly 139,000 barrels a day were wiped off the West Coast fuel map. Overnight.

Now the same company sits at the heart of Oregon’s worst energy nightmare.

Because Phillips 66 doesn’t just operate in California. It also controls the Ferndale refinery in Washington — a facility most Oregonians have never seen, but one that quietly keeps their state moving. Ferndale is the backbone of Oregon’s fuel supply, pushing gasoline and diesel south through the Olympic Pipeline and into Portland’s storage terminals. Without it, Oregon doesn’t slow down. It stops.

That’s why panic crept into Salem.

Behind the scenes, aides to Governor Tina Kotek scrambled for answers as the implications became impossible to ignore. Her office issued a blunt warning: Oregon relies almost entirely on Washington refineries, and any disruption north of the border threatens the state’s fuel security. This wasn’t political spin. It was arithmetic.

Oregon has no refineries of its own. Not one. Every single day, the state burns through roughly 100,000 barrels of gasoline and diesel, most of it refined in Washington — with Ferndale as a critical node in the chain. When Phillips 66 confirmed in corporate filings that it is divesting $3 billion in refinery assets, Ferndale was listed among them. Suddenly, Oregon’s energy future looked frighteningly fragile.

On the ground, the anxiety isn’t abstract. School bus drivers, truckers, farmers, and working families read the headlines and do the math. For a driver in rural Oregon, a refinery closure isn’t a policy debate. It’s the difference between getting to work and missing a paycheck. For a small-town gas station owner, it’s the difference between staying open and shutting the lights off.

The pattern is already familiar. As margins tighten and regulatory costs climb, refineries are being closed or sold off piece by piece. Phillips 66 has been candid with investors, citing declining demand and regulatory pressure as key reasons behind the Los Angeles shutdown. That same logic now hangs over Ferndale — and by extension, over every Oregon household that depends on affordable fuel.

And here’s the part no one in Salem wants to say out loud: there is no backup plan.

Oregon’s entire fuel system runs through a single aging artery — the 400-mile Olympic Pipeline, carrying fuel south from Washington’s five refineries straight into the Portland terminal cluster. When that line hiccups, the consequences are immediate. In September 2025, a brief shutdown sent pump prices soaring within hours. AAA tracked the spike as stations scrambled to stretch inventory.

The reason is brutal in its simplicity. Oregon typically holds just 10 to 15 days of fuel in storage, barely half the national average. There is no margin for error. One pipeline disruption, one refinery outage, one regulatory squeeze — and the state runs dry in under two weeks.

You can already see the strain. In December 2025, the average Oregon driver paid $3.70 a gallon, a full 75 cents higher than the national average. Over a year, that’s nearly $1,800 per driver — hundreds more than what motorists pay in Texas or Oklahoma. For truckers in eastern Oregon, fuel costs are swallowing larger chunks of every paycheck. For gas station owners in towns like Klamath Falls, suppliers charge a premium because there’s nowhere else to turn.

Washington’s climate laws only intensify the pressure.

These aren’t vague goals. They’re hard deadlines. Net-zero emissions by 2050. One hundred percent clean electricity by 2045. And refineries are squarely in the crosshairs. A state refinery study released in April 2025 made it clear: all five Washington refineries will need to change their operations to comply with emissions limits.

What that means in practice is fewer barrels. Much fewer.

California has already shown what comes next. When Phillips 66 converted its Rodeo refinery to renewable diesel, output dropped sharply. Jobs vanished. Capacity was slashed, often to half or less of previous levels. Valero’s Benicia facility is set to end petroleum refining entirely by April 2026, removing another 145,000 barrels a day from the regional supply. Federal analysts warn California will lose 17 percent of its refining capacity in just 12 months.

If Washington follows the same path, Oregon’s best-case scenario is a trickle of alternative fuels — nowhere near enough to cover current demand. State modeling avoids precise numbers, but real-world data from California is unforgiving: conversions typically replace only 20 to 30 percent of original output. That isn’t a temporary disruption. It’s a permanent supply cut baked into law.

Importing fuel from overseas is often floated as the solution. It isn’t.

When gasoline has to cross the Pacific, the journey takes weeks. Tankers sit offshore waiting for berths. Ports bottleneck. Testing and inland transport add more delays and more cost. Analysts warn that in a supply crunch, Asian imports can carry a $40-per-barrel premium — nearly $1 extra per gallon before taxes even enter the picture.

And Oregon piles on taxes.

Federal gas tax. State gas tax. Clean fuels fees. Climate surcharges. At current usage, a typical Oregon driver burns about 480 gallons a year. At today’s prices, that’s already painful. But if imports become the norm, modeling shows pump prices could hit $8, $9, even $10 a gallon. That’s an extra $2,000 to $3,000 a year out of pocket for working families — more than two months’ rent for many.

For a school bus driver in rural Oregon, these aren’t numbers on a spreadsheet. They’re a threat to her job, her home, and her family’s future.

As politicians debate climate targets and refinery transitions, people on the ground are asking simpler questions: What’s the plan when the fuel runs out? Who pays when prices explode? And why is an entire state living on a single shrinking lifeline?

Right now, Oregon is a fuel island — boxed in by geography, policy, and politics. As refineries close and pipelines strain, every gallon costs more, with no off-ramp in sight.

This isn’t a distant warning. It’s a countdown.

And unless leaders act fast, the next refinery closure won’t just spark panic in Salem — it will hit every driveway, every farm, and every family across Oregon.