USW Disappointed by Decision to Close Delaware Refinery
OAKHURST, N.J. (DTN) --- The United Steelworkers Union today expressed
disappointment regarding Valero Energy's decision to close its 210,000 bpd
refinery in Delaware City, Delaware.
The company this morning announced plans to shut the refinery "due to
financial losses caused by very poor economic conditions, significant capital
spending requirements and high operating costs." Shutdown will commence
immediately.
Valero said it expects to report a pre-tax charge of approximately $1.7
billion to $1.8 billion related primarily to asset impairment, employee
severance and other shutdown costs.
"We're disappointed about the closure of the Delaware City refinery. Not
only does it hurt the employees of the refinery and their families, but it
impacts the community as well," USW said in an emailed statement. "With the
closure of Sunoco's Eagle Point refinery operations, it looks like this is
becoming a systematic problem in the independent refining sector."
Sunoco Inc. on Oct. 6 announced it would indefinitely idle all processing
units at its Eagle Point refinery located in Westville, New Jersey, "in an
effort to reduce losses in its refining business when a recessionary economy,
weak demand for refined products, and increased global refining capacity have
created margin pressure on the entire refining industry."
The USW said it will continue to monitor the economic situation, with today
beginning the 60-day notice period. During this time, the union will negotiate
the effects of the Delaware City refinery's closure on the membership.
"We're also disappointed that Valero is importing refined products from
overseas while shutting down refineries in the U.S.," USW continued.
"Hopefully, we will see a possible buyer in the market who will run the
Delaware City refinery."
Valero CEO Bill Kleese said the company spent the last year working to avoid
this situation, but that efforts to sell the facility did not materialize.
"At this point, we have exhausted all viable options," said Kleese.
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