Congratulations to the ethanol lobby: PES is shut down and the site might never be usable again
You may recall that a major factor in the shutdown of the PES (Philadelphia Energy Solutions) refinery was the American ethanol lobby, which pushed so hard for blending corn fuel into gasoline or forcing refiners to buy up credits to avoid the costly blending exercise that it contributed in a big way to PES' bankruptcy.
Well, it gets worse. Not only is that refinery going to stay closed, it looks like it will be extremely costly and probably untenable to convert it into something more useful than... a shut refinery:
Abernathy, who has been in ongoing conversation with Hilco, said although he can’t say for certain that it won’t continue refinery-related business, he’s expecting “light industrial logistical operations using the energy assets that are currently there, specifically around energy logistics and the pipeline operations.”
“Hilco is not a refinery, and not a refinery operator — they’re a developer of multi-use light industrial,” Abernathy said.
Eight years ago, Hilco bought Sparrows Point in Baltimore, 3,100 heavily polluted acres that had been home to a Bethlehem Steel plant, for $72 million. It turned the site into Tradepoint Atlantic, a distribution hub with 15 tenants, including Amazon, Under Armour, FedEx, Home Depot, Gotham Greens, a hydroponic greenhouse, and an offshore wind-energy farm.
To redevelop the site into something other than a refinery — and to close the sale — Hilco, PES and Sunoco, the refinery’s former owner, will need to agree to removing a deed restriction incorporated into the 2012 buyer-seller agreement between Sunoco and PES. The deed restriction narrows the definition of construction and development allowed in the area to “actions or projects” that are “related or associated” to the “refinery business, the energy industry generally and the chemical industry.”
In January, Pennsylvania’s Department of Environmental Protection, which also is part of that agreement and oversees the ongoing cleanup at the site, said it will consider amending the restriction to allow development to a higher use. Sunoco did not agree, however, and the issue remains unresolved.
Dismantling the refinery and redeveloping the property into something different might have costly implications for Sunoco, now known as Energy Transfer. Through its subsidiary Evergreen Resources, the company has been working on the legacy environmental cleanup at the site, which is heavily contaminated with cancer-causing benzene and other substances, under various programs since 2003. By December, Sunoco is expected to have presented cleanup plans for 10 areas of the site. So far, eight remedial investigations have been approved, and no plans have been presented. A required public involvement meeting is also pending, after a failed attempt last fall.
But what really complicates the issue is that until now, the cleanup has been performed with an operating refinery, and to a standard that assumed a refinery would continue to be there. If the refinery is removed, further site characterization and cleaning would be required, which will have implications for the cost of the cleanup.
Who pays what is something all parties will need to agree on.
This sounds like a super easy problem to solve, no? Actually, no.
Abernathy is optimistic, at least on the record (he can't really not sound optimistic, to be fair).
But you have to wonder if job losses, plus all the rest of this could have been avoided if we didn't have a stupid policy in place that turns food into fuel and which corn growers forced Trump to double down on because a man called Peter Navarro forgot that a trade war with China might hurt farmers, and the administration failed to cut better trade deals with countries like Brazil and several in West Africa that want to buy our ethanol.
Bonus: The entire Democratic presidential field are major sellouts to the ethanol industry. The only ones who seem to get that refineries like PES are important for jobs in Pennsylvania - Biden And Bloomberg - seem to be fading fast against the rise of Bernie Sanders, who hates fossil fuels and loves ethanol.
What a mess.
H/T Liz Mair