Emotions raw, PES refinery workers fight to keep plant open

Patty Beach, a worker at the South Philadelphia refinery, makes her case to save her place of employment. (Brad Larrison for WHYY)

Patty Beach, a worker at the South Philadelphia refinery, makes her case to save her place of employment. (Brad Larrison for WHYY)

Patty Beach’s voice broke as she described the emotional roller of saying goodbye to the Philadelphia Energy Solutions refinery where she spent 21 years working 12 hour days.

“This past week I have watched almost every union employee be walked out —  and yes I’m sorry I’m going to cry — but it’s been very, very emotional,” said Beach, an operator at the South Philadelphia refinery’s crude unit. “These are people that I have worked for for 20 years and they’re going to be disbanded and taking jobs all over the continent.”

The Philadelphia woman spoke to more than 500 people packed into a Point Breeze school auditorium on Wednesday evening at a public meeting about the future of the refinery, which will close August 25, after a fire and explosion destroyed the alkylation unit that turns crude oil into gasoline in June. The company filed for bankruptcy protection a month ago.

Like many in the refinery, Beach doesn’t know what she’s going to do next. She’s not sure she’ll receive severance pay or extended benefits. Two of her sons and a son-in-law also worked there. But money is not the only thing that worries her. She’s devastated because she might never see some of her colleagues again.

Local labor union members and laid-off workers from the Philadelphia Energy Solutions Refinery and others gathered for a community meeting Wednesday on the future of the refinery and its employees. (Brad Larrison for WHYY)

Ultimately, Beach said, every Philadelphian will feel the loss. She pays $3,000 in wage taxes a year, she said. Multiply that by 1,175 —  the number of people employed by the refinery as employees, part-time workers or contractors.

“Where is that money going to come from if we stay closed?” Beach asked the panel of experts and community members convened by the city as a refinery advisory group. “It’s going to come from the community’s pockets, because they’re either going to lose things that that money provides for, or they’re going to be asked to pay more.”

Tony Wigglesworth, executive director of Philadelphia Area Labor Management Committee and a member of the city’s refinery advisory group’s labor committee, said PES’ closure would cost the city about $1.2 billion in immediate losses — $237 million from employee paychecks and an $837 million cut in income along the supply chain.

Ryan O’Callaghan of the the United Steelworkers Local 10-1 along with other labor union representatives and city officials attend a community meeting on the future of the Philadelphia Energy Solutions Refinery in South Philadelphia. (Brad Larrison for WHYY)

PES employees dominated Wednesday’s meeting with urgent pleas to find a way to keep the plant open. Some in the audience booed when community members spoke about the refinery’s environmental impacts and their desire to see another use for the site.

Pat Delaney, a worker at the refinery, called on city officials to find an operator for the refinery, the largest in the Northeast. Delaney said calls to not reopen the plant after PES vacates at the end of the month don’t take into account all of the ways the facility, and its workers, benefits the city.

Pat Delaney, a former refinery worker, makes his case for keeping the refinery open and lays criticism on those who call for its closure on environmental grounds. (Brad Larrison for WHYY)

“These are the people that are in your community, these are the people who do the blood drives, these are the people that support United Way, these are the people who get the interns from Drexel University, from Penn, from Temple,” he said. “These are the people that work with us, these are your children, these are the future, your neighbors, your friends, your family. If you want to close it, that is the wrong direction, believe me.”

United Steelworkers Local 10-1 president Ryan O’Callaghan, a member of the group’s labor committee, said about 36,000 workers in the region will be affected by the closure of the refinery, in one way or another.

Cheers and applause erupt during a plea to reopen the Philadelphia Energy Solutions Refinery in South Philadelphia as soon as possible. (Brad Larrison for WHYY)

Union meeting with potential buyers for refinery

PES has let go roughly half of its union workers in the last week — 80 last Thursday, 280 on Tuesday, and 80 on Wednesday. Employees are expected to be paid until Aug. 25, the planned termination date. But the company has not offered severance pay or continued health benefits, according to O’Callaghan.

Union leaders are negotiating a deal with PES that would keep a crew of union workers on payroll after Sunday until a new owner takes over. The workers would ensure the refinery is winding out safely. O’Callaghan told PlanPhilly they’re close to a deal, and that the union has met with two potential bidders for the refinery so far. Reuters reported there are at least three parties interested in buying the refinery.

According to bankruptcy court documents, PES employed approximately 950 workers, part or full-time — 620 were paid per hour and 330 earned a salary, documents say. In addition, 225 people were hired as independent contractors and temporary workers, documents say.

“We know that this refinery can be started up immediately. And part of that is making sure that it’s maintained, as it is, safely, so it can be viable —  that’s our goal,” O’Callaghan said.

Jim Snell, business manager for the Steamfitters Local Union 420 and a member of the labor committee, said workers need the city’s help to pressure PES to bring the plant down in a responsible way, keeping qualified workers at the complex. Even though he’s aware the city doesn’t have much say in what PES ends up doing, he said the advisory group could help in keeping a spot on the company.

“We need this refinery open, we need it. Whether it is a refinery, energy-related facility, it has to stay open. The impact to the city and the region is tremendous. Something has to fill that void once PES leaves,” Snell said.

A spokesperson for PES said the company could not comment on the negotiation.

PES entered Chapter 11 bankruptcy on July 21 for the second time in two years. Days later, a U.S. bankruptcy judge approved a $65 million loan to allow the company to wind out operations safely until accessing $1.25 billion in insurance coverage. But according to Reuters, the company is running out of cash. Yesterday, the company appeared at a second hearing at the United States Bankruptcy Court in Delaware.

The next advisory group meetings will take place Aug. 27 and Sept. 9. The Aug. 27 meeting will focus o environmental impacts while the last meeting will focus on business and economic considerations. Meanwhile, the public can submit written comments and review the process at the group’s website. Brian Abernathy, the city’s managing director, said more meetings might be added.

After the meetings, the advisory group will prepare a report to share with city officials and the city will issue a final report with recommendations by fall.

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