Phillips 66’s integrated model uniquely positions the company for success in the energy transition, Brian Mandell said recently.

Mandell participated in a keynote fireside chat at the Reuters Global Energy Transition Conference in New York City last month, discussing integration across the Phillips 66 value chain and how it helps the company pursue lower-carbon opportunities. The discussion also included a new partnership as an example of how Phillips 66 is unlocking that value.

“What’s interesting about our integrated system is you can take assets and leverage them for new opportunities,” Mandell said. “We’re focused on both traditional energies and also emerging energies, particularly renewable fuels.”

Mandell mentioned Sustainable Aviation Fuel (SAF) as an example, announcing a new deal with British Airways. The airline has received 5 million gallons of neat SAF from Phillips 66 through June at Los Angeles International Airport. The deal joins a growing list of other agreements the company has recently made.

“We were the first refinery in the UK to produce SAF at scale, and in 2022, we did a deal with British Airways to sell them that product,” Mandell said. “Last year we announced a deal with United at Chicago O’Hare International Airport.”

Setting Phillips 66 apart

Mandell also highlighted the transformation of the company’s San Francisco refinery, which now runs 50,000 barrels a day of feedstock.

“We saw an opportunity to convert that refinery into a renewable diesel and sustainable aviation fuel refiner,” said Mandell, referring to the renamed Rodeo Renewable Energy Complex. “Rodeo is part of our newest segment, our renewables segment, and is a great example of how we are evaluating opportunities for lower-carbon solutions.”

Part of Phillips 66’s integrated model also includes a commercial organization that focuses on “finding the right feedstock, the right price, at the right time to make sure what the plant needs, we have,” Mandell said.

Mandell explained that optimizing plants by running the best suited feedstock is how Phillips 66 unlocked other opportunities. This allows for the most efficient slate for a refinery while staying customer-centric. 

Mandell provided an example of California’s desire for renewable diesel, where Phillips 66 supplies over 600 76^® branded stores. “Our integrated model can take renewable diesel to the end consumer. We’re constantly trying to get the product all the way through that last mile.”

Collaboration is necessary 

Effort by various stakeholders is needed to continue the development and implementation of renewable fuels, said Mandell. Using SAF as an example, he noted it is difficult to invest and innovate with changing policies, thus calling for more collaboration.  

“We’re going to need airlines, shippers, airports, producers and the government to all work together to develop [the SAF] market,” said Mandell. “We’re historically a traditional energy company, but our view is that we need all forms of energy.”

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What this means: This 30.2-megawatt facility sets new standards in integrating renewable energy into industrial operations.

• It reduces Rodeo’s grid power demand by 50%, avoiding 33,000 metric tons of carbon dioxide emissions annually.*
• It is designed to generate approximately 60,000 megawatt-hours per year of electricity, enough to power more than 23,000 electric vehicles each year.

Celebrating milestones: The solar facility was unveiled in December 2024 at a ribbon cutting with industry leaders and elected officials.

• Mark Lashier, Phillips 66 chairman and CEO, said, “Our collaboration with NextEra reduces carbon emissions at Rodeo, a facility dedicated to producing renewable fuels and one of the largest of its kind in the world.”

Powering Rodeo: Situated on 88 acres of land owned by Phillips 66, this is California’s largest on-site dedicated solar facility.

• “Instead of crude oil, we are processing fats, greases and vegetable oils to create renewable diesel and sustainable aviation fuel,” Lashier said.

Envisioning the impact: This solar facility underscores Phillips 66’s commitment to helping advance a lower-carbon future through initiatives accretive to shareholder value and enhancing the company’s energy infrastructure.

Highlighting the strategic opportunity, Lashier added, “We saw an opportunity in reducing our carbon footprint, save on utility costs, while at the same time producing reliable, affordable energy.”

*Calculation is based on the EPA’s AVoided Emissions and geneRation Tool (AVERT).

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Speaking at the Reuters Energy Transition North America 2024 conference in Houston, Harbison said the Rodeo Renewable Energy Complex is a good example of how Phillips 66 is adapting its operations while retaining its core integrated downstream businesses. 

“Our vision of being the leading integrated downstream energy provider ensures that we prioritize innovation in delivering affordable and reliable energy while exploring lower-carbon opportunities,” Harbison said. “This transformation shows how existing infrastructure can support large-scale, lower-carbon energy production.” 

Part of the Reuters Energy LIVE summit, the event brought together some 400 industry leaders to discuss strategies for advancing sustainable energy. While Harbison talked about the company’s vision, he also discussed its mission of providing energy and improving lives. 

“That mission drives everything we do as we strive to meet today’s energy needs while preparing for the future,” he said.  

Harbison highlighted workforce development as a key part of Phillips 66’s strategy, focusing on equipping employees with skills for traditional and emerging energy roles. The company provides technical and leadership training for employees at all levels, from new hires to executives. 

To build its talent pipeline, Phillips 66 also partners with universities and offers internship programs, identifying promising candidates early and providing pathways for meaningful careers within the company. 

“Investing in people is essential to our success,” Harbison said. “We focus on aligning individual roles with the company’s vision, creating opportunities for growth and fostering a sense of empowerment.” 

Harbison said Phillips 66 would continue to work toward meeting global energy needs through scalable, proven solutions. “Our ability to meet global energy needs depends on scaling proven solutions,” he said. 

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Phillips 66 will supply United Airlines with 3 million gallons of SAF for use at ORD. This agreement includes the potential to increase the supply to 8 million gallons through the first half of 2025. Phillips 66 will deliver an initial 600,000 gallons of SAF to United Airlines at LAX by the end of 2024.

“We are excited to continue our collaboration with United Airlines to advance its lower-carbon goals and explore ways to benefit all segments of the aviation industry,” said Brian Mandell, Executive Vice President, Marketing and Commercial, Phillips 66. “Building on our legacy as a leading conventional jet fuel supplier, providing 10% of the fuel volumes nationwide, we are dedicated to offering additional fuel options to our customers.”

Phillips 66’s extensive commercial and logistical capabilities, including blending hubs in Illinois and on the West Coast, ensure efficient and reliable SAF distribution to customers. The Illinois Sustainable Aviation Fuel Purchase Credit further incentivizes the use of SAF, benefiting producers and encouraging investments in lower-carbon solutions.

SAF is a low-carbon-intensity fuel produced from renewable feedstocks. This supply of SAF is made from waste fats, oils and greases and can have up to 85% lower life-cycle GHG emissions than conventional jet fuel. SAF, once blended, is compatible with existing aircraft engines and airport fuel infrastructure, making it an essential component in the journey toward a lower-carbon future. With a rich history of aviation innovation — spanning breakthroughs like 100-octane avgas for military use in WWII and anti-icing additives for traditional fuels — Phillips 66 is now leading advancements in renewable fuels development.

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As a producer of SAF, Phillips 66 said it is proud to support collaborations like this and that the company looks forward to contributing to the initiative. 

Collaborations between public and private sectors can drive the innovation needed in hard-to-decarbonize industries like aviation. Progress is also made possible by California’s climate programs, particularly the Low Carbon Fuel Standard, which incentivizes the development of renewable fuels and technologies. 

Phillips 66’s Rodeo Renewable Energy Complex in the San Francisco Bay area demonstrates the company’s role in supporting California’s climate goals by producing renewable diesel and sustainable aviation fuel. 

The company is dedicated to playing a meaningful role in the energy transition, Phillips 66 said, and to providing customers with lower-carbon solutions. 

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The Humber Refinery in the United Kingdom and the Lake Charles Manufacturing Complex in Louisiana both produce a critical material used in lithium-ion batteries. It’s called specialty coke, and it’s used to make synthetic graphite anodes for the batteries that power EVs and electronics like smartphones. Specialty coke is also an important resource for helping reduce the steel industry’s carbon footprint.

“We are driving innovations that are essential to a lower-carbon future for everyone. We have the people, capabilities and assets to meet the rising demand, and it’s exciting to know that our products are helping create change in the energy industry and in many other industries as well,” said Zhanna Golodryga, Phillips 66’s Executive Vice President, Emerging Energy and Sustainability.

Meeting the Growing Battery Demand

When it comes to lithium-ion battery production, Phillips 66 has a business advantage. Humber is the only facility that produces specialty coke in Europe, and with that asset and Lake Charles, Phillips 66 is well positioned to be a leading supplier of battery anode precursor materials on both sides of the Atlantic Ocean.

The U.S. battery market is growing. The International Energy Agency predicts that by 2030, almost one in five cars sold in the United States will be electric. Government incentives like the Inflation Reduction Act are encouraging U.S. companies to develop battery production capabilities.

“High-quality graphite anodes are instrumental in developing EV batteries that provide greater driving range, faster charging and enhanced longevity,” said Scott Brombosz, Technical Director of Phillips 66’s Emerging Energy organization and a former battery scientist.

Enabling Sustainable Steel Production

According to the American Iron and Steel Institute, a key factor in decarbonizing the steel industry is an accelerated adoption of electric arc furnace (EAF) technology, which generates about 75% fewer emissions compared to blast furnace steel production. EAFs use graphite electrodes to create electric arcs to melt scrap steel or other iron material to produce recycled steel. Graphite electrodes made from Phillips 66 specialty coke manufactured at the Humber and Lake Charles refineries help to efficiently channel the power required to produce liquid steel from the scrap sources, which promotes sustainability through material efficiency and recyclability.

Ensuring Consistency and Reliability

Whether the specialty coke is destined for the steel industry or battery manufacturing, Phillips 66 leverages proprietary processes and on-site coke testing laboratories to assure a high level of consistency in product quality. Phillips 66 production sites also benefit from the expertise of the company’s Energy Research and Innovation Center in Bartlesville, Oklahoma, which has conducted dedicated research in specialty coke for decades.

“Ultimately,” said Golodryga, “Phillips 66’s technical know-how, proven track record and strategically located assets position the company as a reliable supplier to customers in North America and globally.”

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The company’s growing network of branded chargers recently received a boost when it was awarded $2.5 million in grants from the National Electric Vehicle Infrastructure (NEVI) Formula Program to install more charging stations at sites in Colorado and California.

Additionally, Phillips 66 announced plans via its 2024 Sustainability and People Report to add locations to more states through 2025. 

“Electrification is an important part of our Emerging Energy organization’s approach, and we’re taking a pragmatic approach to our EV charging pilot program,” said Zhanna Golodryga, Phillips 66 EVP of Emerging Energy and Sustainability. “We want to provide a mix of affordable, reliable energy to meet all customer expectations.”

Phillips 66 has been awarded a total of $7 million in U.S. EV charging grants to date, allowing the company to broaden its growth plans and offset 50 percent of the costs to build pilot charging stations. Some of the recent funding from NEVI will help build three sites in Colorado, with two in Colorado Springs and one in Grand Junction.

The company plans to have active charging stations at over 30 sites across Texas, California, Colorado, Oregon, and Washington by the end of 2025. 

Phillips 66 dipped into the EV charging space in 2022 when the first branded chargers were installed at the company’s flagship station near its Houston headquarters. The site has outperformed expectations and has been useful in testing equipment, partners, pricing and consumer offers. 

Additional charging stations were commissioned in Washington in late 2023 and Colorado in early 2024 with the first 76® and Conoco® branded chargers, respectively.

“We are working closely with our Marketing organization to carefully select future locations to add charging stations at our branded sites,” said Golodryga. “We have come a long way since 2022, and I am proud of the work our team is doing to help Phillips 66 play a meaningful role in the energy transition.” 

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The conference coincided with the company’s announcement that production of renewable fuels at its Rodeo Renewable Energy Complex in California had reached full capacity of approximately 50,000 barrels per day, a significant milestone.

Rodeo is an example of how the company is leveraging existing assets to produce renewable diesel and sustainable aviation fuel, or SAF, creating long-term value for shareholders while contributing to GHG emissions reductions targets, Golodryga said.

“Phillips 66 continually incorporates learnings from our existing operations to further improve our decision making,” said Golodryga. “For example, our Humber Refinery in the U.K. was the first to produce SAF since 2017 and is primary supplier of SAF to British Airways.”

Golodryga also outlined the company’s “five rights” approach for its Emerging Energy organization, a framework that underscores Phillips 66’s commitment to making informed, meaningful business decisions.

“We pursue opportunities where we have a competitive advantage with the right returns, technology, regulatory environment, partnerships and timing,” she said. “This is our criteria that guides our pragmatic approach.”

Phillips 66 also has a strong competitive position in specialty coke, which is used in graphite electrode for steel manufacturing and in battery anodes. The company is also expanding its presence in the EV charging space and further evolving lower carbon energy hubs, such as using solar to power its manufacturing processes.

Critical to the evolving energy landscape is permitting reform, Golodryga said, as well as collaboration. 

“We cannot do it alone,” she said. “Partnering with other companies, technology providers, regulatory bodies, and leveraging our collective strengths is essential to moving forward.”

Photo above (from left to right): Marc Chabot, WSP chief global client officer; Zhanna Golodryga, Phillips 66 EVP of emerging energy and sustainability; David Carroll, ENGIE chief renewables officer; Heather Polinsky, Arcadis president for resilience; and Bill Newsom, Mitsubishi Power Americas president and CEO.

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“The facility conversion was moving forward like a high-speed train,” said Rhinehart, who has led several Phillips 66 refineries. “I had to get on the train and figure out how to lead the way.” 

Now vice president of the Rodeo Renewable Energy Complex, Rhinehart indeed figured it out, but not without help from a hard-working team.

We spoke to her about the facility’s conversion to one of the world’s largest renewable fuels facilities, which just achieved full production capacity.

1. You’ve managed refineries that produce traditional fuels at several Phillips 66 refineries. How is managing the Rodeo Renewable Energy Complex different?
   
   We had to build a renewables value chain at Phillips 66 from scratch. We gather the feedstock and transport it to the facility, and then we process it here at Rodeo. Prior to the full conversion of Rodeo, we started up Unit 250 in April 2021, which uses soybean oil as its primary feedstock. Now with the other units coming online, we can run renewable feedstocks such as greases, fats and used cooking oil.  Processing renewable feedstocks at this scale is such a new and emerging technology compared to traditional petroleum refining. The yield varies depending on these feedstocks, and the intervals in which we will replace catalysts are different than in traditional hydrotreating. There are many industry experts who know about fluidized catalytic cracking units or hydrocrackers, but there’s not an infinite number of experts who know about renewables.
   
   
2. What did it take to reach the company’s goal of 50,000 barrels a day by the end of the second quarter?
   
   We have executed a phased approach to Rodeo Renewed. In phase one, we completed the conversion of the first hydrocracker to process renewables. The next phase that took us to maximum capacity of 50,000 barrels per day was the conversion of the second hydrocracker. Phase three was getting our pre-treatment area online, which brings the business together because we can process a wider range of feedstocks with lower carbon intensity. That really puts us in a position to maximize the value of the business.
   
   
3. Rodeo Renewed was four years in the making. What were your main objectives during the process?
   
   Phillips 66 conceived the project in 2019 and announced it in 2020. I joined Rodeo in May 2022 shortly after we received the land use permit. We needed to secure air permits that would allow us to start construction. We were able to carry out some pre-construction activities in 2022 and began construction in January 2023 after receiving those permits. We simplified objectives for the team to ensure a successful transition. We had two major goals during this period: operate our facility in a safe and environmentally sound manner, and flawlessly execute our conversion. All work that anybody at this facility carried out had to be in service to those two goals.
   
   
4. How would you characterize the environmental benefits of the renewable energy complex?
   
   Compared to petroleum refining, producing renewable fuels reduces lifecycle carbon emissions by 8.5 million metric tons per year. That’s the equivalent of taking 1.4 million gasoline-powered cars off California roads each year. Also, the conversion cuts hazardous criteria air pollutant emissions by over 70% and greenhouse gas emissions by 38%. These are very substantial improvements that will help California meet its climate objectives.
   
   
5. Lots of people worked to make the project a reality — Commercial, Marketing, Emerging Energy and Major Projects, to name a few. Who are the unsung heroes?
   
   Full credit goes to the entire Rodeo workforce. We have a group of people from the Prepare to Operate, turnaround, maintenance, operations, technical, HSE, HR and optimization organizations who did the preparations for the turnaround, whether it was the scope development, execution scheduling or shutdown procedures. The fact that they have executed the event so flawlessly is amazing. This is the largest by cost, scope and schedule duration of any turnaround we’ve ever done at Phillips 66. It’s awe-inspiring what this team has done.

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In a video about the project, Lashier says the recent transformation of the 128-year-old refinery to the Rodeo Renewable Energy Complex occurred at the right time at the right place.

“The Rodeo facility embodies excellence, with a dedicated team committed to driving impactful change in today’s world,” he says.

In the video, Lashier also highlights the company’s production of traditional fuels, including gasoline, diesel and jet fuel, as well as other focus areas in the emerging energy space. All of them, he says, align with the company’s mission to provide energy and improve lives.

Watch now for Lashier’s insights on Rodeo, renewables and the road ahead for Phillips 66.

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