By Amber Lester
Thursday, August 05, 2010
Hundreds of Western Refinery employees in Yorktown will be out of work in six weeks, when the refinery will shut down operations.
The company announced its decision to suspend refining operations Thursday morning. In a statement, Chief Executive Officer Jeff Stevens cited the ongoing poor economy as the reason to shut down. The refinery employs about 250 people, plus an additional 100 contractors.
The shutdown process will take approximately six weeks. The plant is expected to run at rates of 65,000 to 70,000 barrels a day before it stops production in mid-September. Western Refinery will continue to operate the Yorktown products terminal and supply its finished oil products to the East Coast.
York County Economic Development Director Jim Noel said the company will work with county and state agencies to try to place employees in new jobs, but said that process is “certainly in the embryonic stage.”
The company indicated the shutdown could be temporary, however. Stevens said the company plans to evaluate strategic alternatives for the facility, including restarting the refinery if the market conditions improve. “They left the door open to go back, but we have to assume they’ll be closed,” Noel said.
Western Refining paid $4.2 million in real estate and machinery and tool taxes in York County last year. Noel said the company will still own its refinery, so the tax revenue won’t be completely lost. “Sometimes this triggers interest from purchasers,” he said.
That’s been true in the past. The refinery opened in 1956 and has been in constant operation since then, even as it changed ownership several times. It was opened by Amoco, then sold to BP, then Giant, which was purchased by Western Refinery. Under Western, the refinery expanded to producing a rate of 70,000 barrels a day, Noel said. “They’ve done a good job,” he said. “Unfortunately, the market is so soft, it’s translated to bad profit margins.”
Western Refinery also has refineries located in El Paso, Texas and Gallup, New Mexico. The majority of its products are gasoline, diesel and jet fuel. Each of its refineries has a truck-loading terminal, and the Yorktown refinery has water access for deliveries by barge and ship.
Congressman Rob Wittman, in whose district the refinery is located and where many workers live, sympathized with the families affected. He called on a more comprehensive national energy policy.
“Regulatory uncertainty because of cap and trade certainly plays a role, and unfortunately, today only emphasizes the country’s unhealthy reliance on foreign oil," Wittman said in a prepared statement. "Today, I sympathize for the families affected by the Yorktown Refinery announcement, and assure them that I will continue to support policies that will create an atmosphere for growth, innovation and job creation, as well as a comprehensive, all-of-the-above energy policy.”
Add comment
Comments
Machinery and tool tax as well as the property taxes will still be due regardless of whether the refinery itself is producing. The county can't just selectively cut taxes for one business (especially with tight budgets already) --- or every business that was having hard times would be petitioning for tax breaks.
Instead of sand traps, it will have a tar pits