With closure of PES refinery imminent, workers and politicians call for secure transition

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Dana Bate is a health and science reporter for WHYY. Previously, she worked as a Washington D.C.-based field producer and on-air reporter for the PBS Nightly Business Report, where she won the Gerald Loeb Award for a series she produced on the Indian economy. She is also the author of five novels, which have been published in several languages around the world. She holds a degree in molecular biophysics and biochemistry from Yale University and a master’s in journalism Northwestern University’s Medill School of Journalism. When she isn’t on the hunt for a good story, she is probably in her kitchen, whipping up a recipe from her extensive cookbook collection.

Emma Lee / WHYY

A large flare burns off fuel at Philadelphia Energy Solutions refinery while firefighters battle a fire there. The wind carried the black smoke toward residential areas of South Philadelphia.

August 20, 2019 | 10:58 AM

Union leaders say they have made some progress in negotiating with the cash-strapped Philadelphia Energy Solutions refinery, which has been closed since a fire broke out in its alkylation unit in June.

Ryan O’Callaghan, president of United Steelworkers Local 10-1, said the refinery had planned to lay off all union workers by Aug. 25. But now, O’Callaghan said Monday, PES has warmed to the idea of allowing a small number of union workers to remain in a caretaker role after that date, to maintain the safety of tanks, lines, and reactors at the South Philadelphia refinery while it isn’t running.

“We’ve gotten them to move,” O’Callaghan said. “We have no signed agreement as of yet … But they’ve moved in our direction.”

Approximately 80 USW workers were let go Thursday, more than a week ahead of schedule. O’Callaghan said that no additional workers were let go Monday, but that he has heard more would be laid off Tuesday. All workers will be paid through Aug. 25, although as it stands, they will not receive severance or health benefits.

The 335,000-barrel-per-day refinery — the largest on the East Coast — entered Chapter 11 bankruptcy on July 21 for the second time in two years. According to Reuters, the company is running out of money and, without access to $1 billion in insurance funds, is under increasing financial pressure to find a buyer.

Workers, community members, and politicians across the political spectrum have had differing ideas about the future use of the 1,300-acre property, but with time running out, a group of politicians and workers met Monday at the Steamfitters Local 420 union hall in Northeast Philadelphia to call for a smooth transition to another refining business.

“With all the jobs that are slated to be lost, we’d prefer [PES] stay,” said Republican U.S. Rep. Brian Fitzpatrick, who led the meeting with union leaders and other politicians. “But if they are decisive about leaving, [we ask] that they leave in a way that’s going to preserve the property for future use.”

Democratic U.S. Rep. Dwight Evans also participated in the meeting and said the transition needs to be handled in a safe and secure fashion, with a focus on both the community and workers.

“This is very devastating to our region,” Evans said. “We need to be vigilant in paying attention to this.”

Fitzpatrick said that all options should be on the table, but that another refining business would be the most obvious type of buyer.

“This parcel has been used for refining oil for over 150 years, so that’s the easiest transition is to remain in that usage,” Fitzpatrick said. “Trying to transition that to some other use, it’s not impossible, but it’s incredibly difficult.”

Fitzpatrick sits on the House Committee on Transportation and Infrastructure, which has jurisdiction over issues related to pipelines and hazardous materials. In that capacity, he has sent a letter to Energy Secretary Rick Perry and the Federal Energy Regulatory Committee to urge action on the behalf of the PES workers.

Although Reuters reported that three companies had been in contact with PES about a potential purchase, it was not immediately clear who those buyers were or how quickly a deal could come together before the company was forced to liquidate.

Fitzpatrick said he was open to looking at ways the federal government could sweeten the deal, to attract buyers.

“There’s always options, financial incentives we can provide, should we get bipartisan support to do it,” he said. “We’re going to explore every single option to keep this running and keep these jobs here.”