Philadelphia refinery permanently shut down but key questions remain

Feb. 2020 Reinery (Monica Herndon:Inq)
Signs and banners posted on the fence surrounding the PES refinery. (Monica Herndon / The Philadelphia Inquirer)


On Feb. 12, a U.S. Bankruptcy Court judge tentatively approved the sale of the Philadelphia Energy Solutions (PES) refinery to a corporation that plans to construct a mixed-use industrial park on the 1300-acre site. Hillco Development Partners, which won the winning bid for the shuttered plant, has stated that they will demolish the refinery. Until recently, PES (formerly operated by Sunoco) was the largest oil refinery on the East Coast and the major stationary source of air pollution in the region.

PES declared bankruptcy and shut down the plant after a tremendous explosion and fire took place there on June 21, 2019. The explosion propelled truck-size hunks of metal into the air and released many toxic chemicals, including 5239 pounds of hydrofluoric acid—which can cause fatal lung injuries as well as eating through human tissue and bone. Fortunately, refinery workers were able to divert even more hydrofluoric acid from a tank near the fire before it could spread and create a catastrophe that might have killed thousands.

For many years before the explosion, the PES refinery was responsible for 70 percent of Philadelphia’s particulate air pollution—as well as contributing to climate change. The environmental group Philly Thrive conducted a survey among neighbors of the refinery in May 2019 and found that, among 314 respondents, over half had heart disease, cancer, or a respiratory condition. Almost 34 percent had asthma, compared to 19 percent in the city overall, and 8 percent nationally.

Earlier this month, the Environmental Integrity Project released the results of its study of data reported by refineries around the country in accord with Environmental Protection Agency rules. The study found that levels of the cancer-causing chemical benzene constantly exceeded EPA standards at 10 refineries. And out of all of the polluters, the PES refinery in Philadelphia recorded the highest benzene levels by far—at nearly five times the EPA standard.

Of course, those working people who had to breathe the polluted air for years were not given a seat in the bankruptcy judge’s chambers. Nor was their outrage that restarting the refinery was still on the table given any consideration in the proceedings. But many had repeatedly made their demands known at rallies and in the media.

On Feb. 1, well over 100 people squeezed into a room at a local community center where a group of young environmental activists associated with Philly Thrive described their vision for the property, which included demands that the refinery be permanently shut down, cleaned up, and replaced with facilities that would be beneficial to humanity and the natural environment while providing good-paying jobs and re-education for the workers.

At a teach-in that took place two days later near the main gate of the refinery, participants further etched out a future or the site that would include extensive parkland, development of wetlands along the river, and the use of sustainable energy sources such as solar panels and wind farms. Peter Winslow, an activist affiliated with several organizations including Green Justice Philly, spoke for many at the event when he told The Inquirer (Feb. 12, 2020) that local environmentalists want to see a smooth transition at the refinery site that creates high-paying jobs while still advocating for a more sustainable future, “rather than one where we’re poisoning ourselves.”

When the date for the bankruptcy hearing arrived, the court session was delayed for nearly six hours while contending buyers and creditors jockeyed behind closed doors. Although PES had chosen to sell the property to Hilco at a hearing in January, a rival firm, the Industrial Realty Group, later challenged the decision while teaming up with a group of oil men, headed by former PES exec Philip Rinaldi, who wished to resume refinery operations.

In the meantime, a group of local labor leaders have played a destructive role in the process. Officials from the United Steelworkers Union Local 10-1, which had represented 614 of the 1100 workers at the refinery, agitated strongly for Rinaldi’s plan to restart the refinery, and a strong contingent of labor building trades officials also backed the plan.

It is true that workers at the plant have a just grievance against PES; over 1000 of them were summarily laid off from their jobs and given no prior notice. Soon afterward, eight top PEX executives awarded themselves $4.6 million in bonuses. Yet the labor officials have spurned the residents of the neighborhood around the refinery, rather than seeking to build a common front with them against the oil corporations.

At a union-organized rally outside City Hall on Jan. 30, some labor leaders maligned opponents of the refinery as “rich kids,” “elitists,” and “tree huggers,” ignoring the fact that the city residents who have suffered the most from the refinery’s pollution are largely working class and African American, and that many are living in poverty.

A group of union officials, led by the business manager of the Building and Construction Trades Council and local Democratic Party honcho John J. Dougherty, even visited the White House and met with an official of the Trump administration to make their case for re-opening the refinery. The officials stated that closure of the plant would be counter to the administration’s line advocating U.S. “self-sufficiency” in oil production.

But lawyers for PES fought back, indicating that a return to oil refining would be unprofitable, and thus, such talk was nothing but “a fantasy.”

At the end of the court session on Feb. 12, Hillco won the sale after raising its bid with a “take-it-or-leave-it” offer of $252 million. The unsecured creditors were convinced not to sue for more money after PES said it would send $20 million their way. Even the Steelworkers international union leadership endorsed the plan when they were assured that laid-off workers would be granted a total of $5 million in settlements plus vague promises of future employment opportunities on the property.

Hillco’s plans for the former refinery are murky at this point. Based on similar projects that Hillco is involved in, such as the former Sparrows Point steelworks in Baltimore, it would probably include a mixture of light industrial plants and warehouses, taking advantage of the site’s proximity to highways, rail lines, and port facilities on the Schuylkill River. It is not out of the question that Hillco would retain some facilities for oil storage or manufacturing of petroleum-based products—in which case, the highly dangerous oil trains would continue to roll along the Schuylkill. “They’ll probably still keep the tank farm and some of the energy logistics that are on-site, but they don’t intend to operate the refinery,” city manager Brian Abernathy observed to The Philadelphia Inquirer (Jan. 24, 2019).

A great many questions remain about the future of the site—including who will undertake and pay for remediation of the heavily contaminated soil. The site also sits in a floodplain; estimates by the city foresee a two-feet rise in water level along waterways in the area in the next 30 years, and a four-feet rise by 2080—and that is a very conservative estimate. Although Hillco might be a “lesser evil” in this instance, compared to those who wanted to restart the refinery, it is suicidal to leave the condition of our soil, water, and air in the hands of private corporations, which are interested solely in maximizing profits.




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