Analysts say Philadelphia refinery, shut down after fire, unlikely to find a willing buyer
More than 1,000 people will be out of work once Philadelphia Energy Solutions’ refinery closes its doors this month. The closure comes in the wake of an explosion and fire that destroyed a crucial part of the plant. But despite pleas from the union, and comments from former Congressman Bob Brady, who told Plan Philly he thought the plant was “almost too big to fail,” industry analysts say finding a buyer who will keep it as a refinery will be next to impossible.
“This facility was significantly less sophisticated than the other East Coast refineries,” said Phil Verleger, an economist and industry consultant. “It could barely hang on in a strong market. Once the export ban was gone, it couldn’t survive.”
When the shuttered Sunoco refinery was revived in 2012 with the help of Brady, the Obama Administration and state grants, its new owner The Carlyle Group took advantage of cheap North Dakota crude oil traveling to Philadelphia by rail. One reason the Bakken crude was so cheap, Verleger said, is because an export ban meant producers couldn’t fetch a better price overseas. When that was lifted, he said, the PES refinery’s days were numbered.
PES filed for bankruptcy in early 2018, citing the rising costs of the Renewable Fuel Standard, a program that forces refiners that don’t blend ethanol to buy credits on the open market.
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