Kathleen Carey
Delaware Daily Times
Sometimes all that’s needed for a miracle is the belief that it can happen.
When the stacks were silenced in September at the ConocoPhillips refinery, hope for a restart may have been distant and unlikely. But as the community rallied to find ways to keep it alive, that resilience and unyielding faith led the way to parking lot C4 on Tuesday as Gov. Tom Corbett and a bevy of federal, state and local officials welcomed Delta Air Lines to the neighborhood.
The pride was evident from the “Welcome Delta” sign at Trainer Wholesale to the sustained horn beep from the pickup truck driving past the press conference minutes before it began.
That sound made Lt. Gov. Jim Cawley smile. “There’s an excitement in the air,” he said.
But as dignitaries outlined who did what to make it possible for the Delta wholly owned subsidiary Monroe Energy LLC to enter into a $180 million agreement — with $30 million coming from the state — and purchase the plant, some recalled how the process started last fall and what the outlook was like then.
“A lot of experts said, ‘Well, things change, markets change, there’s nothing you can really do about it,” said state Senate Majority Leader Dominic Pileggi, R-9, of Chester. “All of the people who are here refused to accept that answer. (They) got together and said, ‘What can we do about it?’”
In September, ConocoPhillips idled the 185,000-barrel-per-day refinery, citing severe market pressure in the East, due to product imports, weakness in demand and regulatory requirements, and it terminated most of the 700 employees in January.
On Tuesday, officials said they had been working with Delta Air Lines for the last five months to see how the Trainer refinery could fit into its business vision of becoming more energy independent. The airline spent $12 billion on jet fuel alone last year, with $2 billion used just to convert crude oil into aviation standard fuel.
All this unfolded while industry experts decried the financial viability of East Coast refining, including administrators at Sunoco Inc., who idled their Marcus Hook plant in December and planned to do so with their Philadelphia facility. Now those officials are optimistic that a deal with The Carlyle Group to acquire that refinery can be reached.
Trainer needed a visionary, and one with the ability to go against popular opinion.
It found one in Edward H. Bastian, the president of Delta.
“It would have been very easy for a corporate executive to just follow the conventional wisdom,” Pileggi said. “(Bastian) had the courage and the confidence to challenge that conventional wisdom on refining, to think of a different model for his company.”
Yet, Bastian added, his idea is to make money.
“Some may say this is an unconventional move, but I can assure you we’ve been very thoughtful about this and we consider this an innovative move, an out-of-the-box idea,” he said. “We’ve got a long-term answer to what is one of the biggest issues that this country faces, which is rising oil prices.”
Upon closing the deal, which Bastian said he hopes occurs in the next few weeks, Delta would use the jet fuel made at Trainer plus agreements with other energy companies across the United States to exchange petroleum products, such as gasoline and diesel for jet fuel to supply 80 percent of its fuel needs.
After making a $100 million investment at the facility to increase jet fuel production to 52,000 barrels per day, Bastian said he anticipates saving several hundred millions of dollars.
“We are making a prudent investment that’s going to help us rein in and control our long-term fuel costs create some level of energy independence and put American jobs back into the marketplace,” Bastian said, adding that he plans to have people back to work by Labor Day.
The governor, who was criticized by some for not taking a more visible role in the crisis, highlighted this deal as an example of what works.
“This demonstrates how the private sector and the government can work together,” Corbett said.
County officials said they received 62 calls, meetings or emails from Corbett’s staff over the last five months.
“We’ve not only saved 400 jobs, but, I believe, we have saved a way of life,” Corbett added.
That way of life is valued perhaps no more greatly than by the people who worked at the refinery.
“It’s a good day,” said Denis Stephano, president of the United Steelworkers Union Local 10-234, who represents the Trainer employees. “Everybody’s happy and we’ve got a tentative agreement to bring people back to work.”
But, that follows months of meetings, emails, phone calls and letters, many of which were sent to Corbett in an attempt to have him meet with the workers to explain just what the closing of the refinery would mean to the community.
“People start realizing … this is like an octopus’ tentacles,” Stephano said.
A state report found that up to 38,000 jobs could be influenced by the regional refineries closures and $500 million in local and state taxes were at risk.
“Believe it or not,” Stephano said of the effort, “it sort of reinvigorates us. You’re sort of on a mission. You do feel some reward that you’ve done some good.”
Even as Tuesday’s mood was celebratory, some officials themselves looked to the work ahead.
“We’re not done yet,” Delaware County Council Chairman Thomas McGarrigle said. “We’re moving onto Marcus Hook to save that refinery and those workers. Then, we’re going down to Philadelphia to save them because the refinery workers are part of the vital economic development for this whole region.”
McGarrigle said estimates indicate the deal between ConocoPhillips and Delta Air Lines will create 380 permanent jobs and 100 additional permanent contracting jobs. In addition, 650 contractors will be employed per day during the period in which the refinery is prepared to resume oil refining operations, he said.
U.S. Patrick Meehan, R-7, of Upper Darby, who hosted various community meetings and got involved in the situation early on, also touted the deal. However, he did indicate the situation is far from over.
“We have some friends on the other side of this town and they’re still hurting,” he said. “But, this is a pillar. This is a start. This is a beginning of what is possible if people continue to believe in this community. We’ve taken a few kicks in the gut here recently, but this community never stopped believing in itself.”
He said that attitude is infectious and transformative.
“Let no one doubt the skills of our workers,” the congressman said. “Let no one doubt the support of our neighbors, and let no one doubt the confidence of our local, state and federal officials in the capacity of this region to transform itself to meet the global economy head-on. Just give us a chance and we’ll beat the Nigerians and the Saudis and the Venezuelans. Hell, we’ll even whoop the Texans.
“The work starts tomorrow,” Meehan said, “the real work of making a down payment on the trust and confidence of those who continue to see possibility and opportunity when others left the field.
“We’ve got a chance to show them what we’re made of. (If) we keep believing in ourselves, showing others what we can do, more innovators, more job creators, more investors will see this patch of possibility for what it is — a pivot point for transition to a new energy and manufacturing economy that will put America first and Pennsylvania at the front line.”