Delta Air Lines hopes to reopen an oil refinery outside Philadelphia by the end of the summer, giving hope to about 400 workers who have been out of work since the facility was idled months ago.
Gov. Tom Corbett on Tuesday hailed Delta's purchase of the refinery from ConocoPhillips _ which shut it down in the fall _ as evidence that the oil business in Pennsylvania is not extinct. The deal had been in the works for months and Corbett said he hoped it would mean momentum in efforts to save several other area refineries.
“This demonstrates how the private sector and the government can work together,” Corbett said at a news conference outside the hulking refinery, estimating the deal will preserve 5,000 jobs at the refinery and in related industries.
Two other refineries in the region, both owned by Sunoco, face an uncertain future. One just down the road, in the suburb of Marcus Hook, has been idled. Sunoco also plans to close its facility in south Philadelphia if it can't find a buyer; the company is exploring a possible joint venture there with a private equity firm.
Natural gas company Energy Transfer Partners announced Monday that it would buy Sunoco, but the deal is not expected to impact plans for either of the refineries.
“We're still working on all of them,” Corbett said. “We got one done.”
Delta President Ed Bastian said former employees at the now-idled refinery in Trainer will get first crack at jobs. The company aims to have the refinery in service by Labor Day.
“We're eager to get Trainer back up and running at full capacity,” Bastian said.
Delta has a tentative agreement with the union at the plant, but it can't be finalized until the sale is closed, he said. The sale, he said, would likely close in the next few weeks.
The airline hopes the $150 million deal will help cut its jet fuel bill.
Delta is getting a $30 million grant to help with the purchase and upgrades to the facility. The grant is contingent on Delta's wholly-owned subsidiary, Monroe Energy LLC, investing at least $350 million in improvements and keeping at least 402 full-time workers on-site for at least five years.
Elected leaders said they expect the Delta deal to provide momentum as they work to save the other refineries.
“We're not done yet,” Delaware County Council Chairman Tom McGarrigle said. “We're moving on to Marcus Hook to save that refinery and those workers.”
U.S. Rep. Pat Meehan called the Delta deal a good beginning that should help the state as it works to enhance its standing in the energy industry.
“Just give us a chance and we'll beat the Nigerians and the Saudis and the Venezuelans,” said Meehan, R-Pa. “We'll even whoop the Texans.”
Fred Chazin, 59, who worked at the Trainer plant for 38 years and plans to reapply, said the Delta purchase was the best-case-scenario.
“We want Delta to make money,” Chazin said. “Because when they make money we make money.”
Jerry Dugan, who worked at the Marcus Hook refinery, plans to apply for a job at the Trainer facility. But he's also still holding out hope his old plant can be saved.
“We'll see what the future brings,” said Dugan, 41. “We're hopeful.”
Mike Hubert was another former employee who lost his job after ConocoPhillips closed. Hubert and his wife have two kids in Catholic school and a third at home.
"I was terrified," said Hubert. "I didn't know what we were going to do."
"Everything changed," said Hubert's wife Donna. "I went back to work for the first time in six years. We had to buy a new car because he could no longer walk to work. My husband went back to school."
While the Huberts are relieved about Delta's purchase, they say the experience they went through after the initial layoff is one they'll never forget.
"We both have a new respect for each other," said Donna. "He thought it was easy to stay home and I guess do nothing all day. [[laughs]] I didn't realize how hard it is to go to work every day."
