Pennsylvania governor opposes tax dollars for refinery restart

[July 11, 2019]  By Jarrett Renshaw and Laila Kearney

PHILADELPHIA (Reuters) - Pennsylvania Governor Tom Wolf does not support using public funds to help save the Philadelphia Energy Solutions refinery complex from permanent closure after a massive fire last month, the governor's spokesman said on Wednesday.

"The administration does not plan expending any funding to maintain the site as a refinery," Wolf spokesman J.J. Abbott said in a statement to Reuters, saying there were "significant challenges" to such a plan.

The fire prompted owners to begin shutting the 335,000-barrel-per-day plant and laying off about 1,000 people, including more than 600 union members. Hundreds of contractors that do business with the refinery are also expected to a take a financial hit.

The cause of the fire is still unknown, and investigations are expected to take months to complete.

"In addition to the damage to the facility, there are outstanding questions about safety and contamination," Abbott said. "Furthermore, the facility faces competitive challenges against more modern refineries that would be extremely costly and difficult to overcome."

The refinery would need significant ongoing investments from its owners to continue operating safely, he said, adding that Wolf's office has activated a team of specialists to help refinery employees find new jobs and seek out other employment-related services.

The lack of government support - both politically and financially - will likely make it harder for PES to sell and restart the largest and oldest refinery on the U.S. East Coast.

Ryan O'Callaghan, head of the refinery union, criticized Wolf's position.

"The idea that Gov. Wolf is helping the workers by putting them out of work is ignorant," O'Callaghan said. "I am sure the governor would fall over himself if it was Amazon looking to relocate here."

O'Callaghan, who works as an operator at the refinery, said losing the facility would mean a drop in tax revenue for the area and a lull in economic activity.

“Politicians who sit in their ivory tower and think there’s alternative uses for the site are washing their hands of the issue,” he said.

 The Philadelphia Energy Solutions oil refinery is shown following a recent fire that caused significant damage to the complex, in Philadelphia, Pennsylvania, U.S., June 26, 2019. REUTERS/Laila Kearney/File Photo

The last time the refinery faced a shutdown, less than a decade ago, city and state politicians from across party lines swooped in to support a deal that kept it open.

Then-Governor Tom Corbett, a Republican, and former Mayor Michael Nutter, a Democrat, teamed up, publicly touting the agreement as saving hundreds of jobs and sparing consumers price spikes at the pump. The Obama administration worked behind the scenes to help usher the plan through, luring private equity giant Carlyle Group with a sweetheart deal.

The political will to again save has palpably diminished, particularly after the explosion, which agitated opposition from environmental activists and influential community.

Current Mayor Jim Kenney's office on Wednesday took a similar tone to the Wolf administration, but stopped short of opposing the use of tax dollars to keep the refinery running.

"The mayor hopes that the future use of the site will provide jobs and have economic benefits for the city as a whole," Kenney's office spokesperson said in an email. "We plan to have discussions about the future of the site, as a refinery or for some other purpose."

Joseph Minott, director and chief attorney for the Clean Air Council, which sued over the previous refinery deal, said he anticipated a change in public sentiment this go-around.

"It does not surprise me at this point the government - once bitten, twice shy - is not rushing to the rescue again," Minott said.

(Reporting by Jarrett Renshaw and Laila Kearney; Editing by Rosalba O'Brien and Alistair Bell)

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