Less than two years after it was shut down, the Delaware City refinery officially returned to life Friday. The refinery’s new owner, PFB Energy, says the plant is once again fully operational after beginning initial operations in June.
- Gov. Jack Markell and Sen. Tom Carper lead the ceremonial ribbon cutting to reopen the Delaware City Refinery.
The refinery’s resurrection is considered a significant boost to Delaware’s economy. When the plant’s previous owner, Valero, announced it would close the refinery in December 2009, it cost 550 jobs. PFP Energy says the reopened refinery has brought nearly 500 employees back to the site and resulted in the hiring of about 250 outside contractors. University of Delaware study estimates the refinery’s return could bring about 2,000 jobs to the state and nearly $100 million in state and local tax revenue when its indirect impact is factored in.
“We returned many of the people who worked here before to the jobs they had before,” said PFB Energy chairman, Thomas O’Malley. “I absolutely believed that we could run [the refinery] in a profitable manner and we will.”
“The Delaware City refinery has been, in many ways, the backbone of a number of our labor unions and hundreds of middle classes families in Delaware since the 1950s,” said U.S. Sen. Chris Coons (D-Delaware). “When refineries are closing for good in lots of other parts of the country, this refinery is reopening.”
Governor Jack Markell (D) called the initial closing of the plant in 2009 “a punch to the gut”, tempering the excitement of the announcement earlier that same fall that Fisker Automotive was buying the shuttered General Motors Boxwood Road in Newport and reopening it to produce hybrid electric cars. Markell says the refinery’s reopening is another example of what can be accomplished when the state commits its energy and resources to job creation and retention as it did in assisting PFP Energy’s purchase the Delaware City refinery.
“You look around and see all these [plant workers] wearing blue – 750 people going to work,” said Markell. “We’ve got to understand the industries in our state better than any other state does and we’ve got to be more committed to their success. When we do that, people are put back to work.”
But Friday’s ceremony celebrating the refinery’s reopening came one day after Wilmington-based pharmaceutic giant AstraZeneca announced its plans to cut 400 jobs from its workforce – a juxtaposition not lost on state officials.
“This is a great day, but we’ve got to continue to have great day because there are still too many people in Delaware who are not working that want to be working,” said Markell. “This is where the United States is right now. This is what’s so important for us to understand. The global economy is different than it was 15-20 years ago. We’re going to have to fight and scratch and claw our way to every single job.”
“The way we move forward is exactly what happened here, which is getting state and federal leadership, organized labor, folks representing the workforce and the folks who’ve got the capital from private equity to come to the table and each be willing to take some risks and make some sacrifices,” said Coons. “If the rest of the country would follow the lead of Delaware, make responsible compromises, and find ways forward, we can get back to work and get this economy going again.”
Delaware City refinery restart hailed for economic impact
State, labor and refinery officials discuss the reopening of the Delaware City Refinery.
There are some indications the Delaware City refinery may do additional hiring in the future. O’Malley revealed Friday that PFP Energy is examining the possibility of expanding work at the site to include a high pressure hydrotreater or “hyrdocracker” that removes sulfur from fuels. O’Malley estimated that the investment to create that part of the operation would be between $850 million to $1 billion.
“It’s a very large project,” said O’Malley.
About $550 million was spent to reopen the refinery and improve its performance and reliability. PFB Energy also pledged to cut the refinery’s environmental impact by reducing carbon dioxide emissions by up to 35 percent.
“They’ve made significant progress already, and you heard [PFP Energy chairman] Tom O’Malley say they believe they can continue to make progress,” said Markell.
“It is possible to be a successful business and provide employment opportunities for hundreds of people and be a better steward of the environment,” said Sen. Tom Carper (D-Delaware). “As this refinery comes back to life, we’re not seeing an increase in sulfur emissions, sulfur dioxide emissions, carbon dioxide emissions and mercury emissions. We’re seeing reductions.”
The Delaware City refinery processes abut 190,000 barrels of heavy crude oil per day. PFP Energy bought the refinery for $220 million, assisted by a $20 million loan from the state’s Strategic Fund that will convert to a grant if job creation and spending targets are met.
