"It doesn't mean supply will be gone, it's only local supply will be gone," explained Wu. " If everything goes well, there's supposed to be no interruption of products to the market."

Hawaii lawmakers, including Gov. Neil Abercrombie, were quick to react to Tesoro's announcement.

"After a good faith effort to continue current refining operations, Tesoro Hawaii has determined that it is in its own best business interests to convert its Hawaii refinery into a terminal facility," said Gov. Neil Abercrombie.  "We have offered to work with Tesoro Hawaii in exploring remaining options and achieving an orderly transition for its employees and the state's energy needs."

Abercrombie says the changing petroleum landscape underscores the urgency for Hawaii to move rapidly on meeting the state's goals for the Hawaii Clean Energy Initiative, which hopes to achieve 70 percent renewable energy production by the year 2030.

"Essential to our economic recovery is taking control of our state’s energy future. We currently send billions of dollars a year outside of our islands to meet our energy needs," said Abercrombie.  "This administration is seeking long-term infrastructure investments that ensure our electric grids are stable, reliable and modern enough to integrate all available alternative and renewable energy technologies."

"The closing of the Kapolei refinery, one of only two refineries in Hawaii, is terrible news for the state and the workers who will lose their job because of this action," added Sen. Mazie Hirono.  "I will work closely with Hawaii's delegation, state officials and community leaders to ensure displaced workers and their families receive whatever federal assistance is available to them as they search for new jobs."

Hirono says that Tesoro has assured her office that there will be no disruptions to Hawaii's gasoline supply for consumers and the military due to the refinery's closure.

"This closure underscores the importance of energy self-sufficiency for Hawaii," said Hirono.  "While Hawaii is the most energy dependent state in the nation, we are not a dependent people.  We must continue to find more ways to support research and development of renewable and alternative energy sources."

Chevron said it is currently running at 1.7 million gallons of gas per day, which is not at full capacity, according to state officials.

State officials say, in October, Hawaii used 38.3 million gallons of gasoline.  In a 30-day month, that averages out to 1.27 million gallons per day.