Nearly 300 Workers Laid Off at South Philadelphia Refinery That Exploded, Union Says

The workers at Philadelphia Energy Solutions, once the largest gas refinery on the East Coast, will be paid through Aug. 25, their union president says.

What to Know

  • About 4 a.m. June 21, a mixture of butane and propane ignited a fire that caused three explosions.
  • About 280 members of United Steelworkers Local received notice Tuesday that they are being laid off, and that they'd be paid through Sunday.
  • The massive site of the gas refinery, which for decades has been Philadelphia's biggest pollutant, has an uncertain future.

Some 280 union workers at a South Philadelphia refinery shut down since a June 21 explosion officially received pink slips Tuesday, surprising few but disheartening nonetheless, the union president said.

The owner of Philadelphia Energy Solutions, which declared bankruptcy last month and said it would not restart operations following the blast, told the members of United Steelworkers Local 10-1 that they would be paid through Sunday, according to their union president.

"They're letting people go today and marching people out today," union President Ryan O'Callaghan told NBC10 Philadelphia.

He added that it's a "sad day in the refinery."

The union represents maintenance workers, machine operators and firefighters at PES. Initially, the refinery owner tried to lay off all of its workers, effective immediately early in July.

But after a visit by U.S. Rep. Mary Gay Scanlon, who represents Delaware County and a portion of South Philadelphia where the refinery is located, and pressure from U.S. Sen. Bob Casey, the owner said it would give proper notice. That put the layoff date as Aug. 25 — this Sunday.

"We're fighting to keep some people in there," O'Callaghan said of still-ongoing negotiations between the union and PES ownership.

He said that until all of the refined gas products and the chemicals used in the refining process are removed, some of his union members should continue to work.

PES CEO Mark Smith said in a statement that "we are releasing employees this week in accordance with previous announcements."

Since the fire on June 21, PES has shut down the refinery and taken measures to preserve the facility for sale and restart as previously stated," Smith said. "The refining complex has completed the idling of a majority of the equipment. ... PES will maintain a caretaker staff at the facility to complete a number of ongoing projects and ensure the safe and environmentally compliant operations at the refinery site."

O'Callaghan said he is also hopeful that a new owner will put in a bid to buy the facility.

"Only one unit out of 30 units have been damaged," he said of the effects from the June blast. "This is a viable enterprise."

A community engagement meeting is planned for Tuesday night at 25th and McKean streets in South Philadelphia.

The future of the hulking site, which for 150 years has been used for heavy industrial purposes, remains hazy and unpredictable.

For decades, it has been the single-biggest polluter in Philadelphia. Even after PES comes out of bankruptcy, a sale of the site is uncertain.

Any potential owner who didn't want to continue using the facility as a refinery would face costly, years-long remediation efforts.

What Is Possible for the Site of Philadelphia Energy Solutions?

Many questions remain unanswered since the explosion: What exactly was damaged in the blast? What caused the explosion? Why was the refinery given wide leeway and fee forgiveness from local and state government agencies in its last bankruptcy, only a year earlier? Can the site actually be cleaned up and host another business enterprise? 

PES said in a statement a week after the explosion that the damage done "made it impossible" to continue operations. 

During an earlier interview with NBC10 three days after the blasts, Mayor Jim Kenney gave no indication he knew a shutdown was imminent despite saying that his administration kept in daily contact with PES senior officials.

"You have to remember: we want people to be safe first and foremost. But there are a lot of jobs there," Kenney said when asked if he would like to see a drawdown of the refinery's operations.

"There’s a lot of decent paying jobs there and we can’t just discount that. We have to figure out what happened, why it happened, what we can put in place to prevent it from happening again and we’ll see what the future brings."

The next day, news broke that the 150-year-old refinery would be sold, and Kenney said he was "disappointed" that so many workers would lose their jobs. 

NBC10 cameras were rolling as an explosion occured at the Philadelphia Energy Solutions refinery in South Philadelphia around 4:22 a.m. Friday, June 21, 2019.

Last month, to alleviate some of the economic burden, Pennsylvania Gov. Tom Wolf said that the Department of Labor & Industry activated its Rapid Response Coordination Services to assist PES employees. The team was expected to connect workers with unemployment insurance, training programs, job search activities and other social service programs.

Kenney also said that Philadelphia officials would convene a group of "quasi-governmental organizations" to look at the economic repercussions of shutting down the refinery.

The refinery was the largest on the East Coast, and its closing could still have future effects on the U.S. markets. Within hours of the explosion, gasoline futures jumped 3.5%.

The fire burned for two days until plant staff were able to turn off a valve that sent fuel into an alkylation unit. City fire officials and the refinery's private fire brigade let the fire burn to avoid the uncontrolled release of explosive gas into the atmosphere.

Philadelphia Fire Department Commissioner Adam Thiel said most of the fuel burned was similar to what fuels gas barbecue grills.

Pictures: South Philadelphia Refinery Explosion and Fire

The refinery complex is technically split into two refineries and dates back to the 1800s  — producing gasoline, diesel, jet fuel and other fuel. It is the single largest cause of particulate pollution in Philadelphia.

Philadelphia Energy Solutions emerged from bankruptcy protection in October 2018. At the time, the limited liability company owed the local and state government more than $3 billion. The amounts were negotiated down to tens of thousands of dollars.

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