May 13, 2012:

Oil helped build Pennsylvania. It helped feed the industry’s workers by giving them jobs, such as those at the old ConocoPhillips refinery in Trainer. But these days, the oil industry is unpredictable. Crude oil is costing more, shrinking an already low profit margin. More than one refinery in Pennsylvania has felt the pain. Recent events show that state government isn’t afraid to step in with taxpayer dollars to make sure those private-sector jobs stay in the commonwealth. Earlier this month, Delta Airlines announced its subsidiary, Monroe Energy, would buy the ConocoPhillips refinery.

Before the purchase, hundreds of pink slips had been readied, threatening the community at its economic core. A Department of Labor and Industry report says every 100 jobs at the refinery leads, indirectly, to 1,800 jobs. The purchase, with an initial cost of $180 million, was bolstered by a $30 million state subsidy — called an Opportunity Grant — from the Department of Community and Economic Development.

Opportunity Grants are funded with appropriations from current and previous years. As a whole, DCED received $214.8 million in the 2011-12 state budget, and $303.5 million the previous year. The department says it had not funded a refinery or drilling extraction, but this was a special case. Delta’s hope is to save on its annual $11.8 billion jet fuel bill by integrating a refinery, a landmark business move that made national headlines. Locally, the purchase was a saving grace for the town, and Delaware County. Ask Senate Majority Leader Dominic Pileggi, R-9, of Chester, what the refinery means to his constituents. It’s an example, he said, of the Opportunity Grant being used in the right way, because it’s about more than jobs.

It’s about a way of life. 

“There are multiple generations of families that have been employed in that trade, in that profession, and if we were not able to keep that refinery open that entire culture built up over a hundred years, that entire set of skills, would’ve gone away,” Pileggi said. But the Trainer refinery is not the only challenge for the region. The Sunoco-owned Marcus Hook refinery, fell idle, some 600 jobs gone. The refinery used to supply 190,000 barrels of oil throughout Pennsylvania, New Jersey and New York — by truck, barge and pipeline.

Sunoco’s 335,000-barrel producing refinery in south Philadelphia, one of the largest on the East Coast, needs a buyer, too. Otherwise, it will meet the same fate at the end of July. Now, the question is how many tax dollars will Gov. Tom Corbett’s administration commit, when hundreds, even thousands, of more Pennsylvanians are subject to the unknowns of a volatile industry.

A recent $5.3 billion acquisition of Sunoco by Texas pipeline company Energy Transfers Partners, and an agreement with venture capital firm the Carlyle Group, gives some hope that these situations will be resolved, Pileggi said, with much more available capital on the scene. But whether the state will pitch in again is based on the transaction, he said. “There needs to be a proposal before a judgment can be made as to what role, if any, the state should have in the implementation of the proposal,” Pileggi said.

Such decisions are made case by case, said Kelli Roberts, spokeswoman for Corbett. But the administration has its eye on Marcus Hook, and on the Philadelphia refinery, and “is still invested” in the future of the refineries. Roberts would not comment on specifics of any communications. “It’s not a one-size-fits-all situation,” she said. “We take the investment of taxpayer dollars very seriously.”

By Daily Times