By July 2, 2019
Less than a week after devastating explosions caused a major fire on June 21, injuring five workers at the Philadelphia Energy Solutions refinery in South Philadelphia, the company announced June 27 that it was closing the plant, impacting over 1,000 workers.
Residents in neighboring communities, whose health and safety have been threatened for generations by the 150-year-old industrial facility, welcomed the news. “This has been genocide,” said Rodney Everett, South Philadelphia resident and a member of the environmental group Philly Thrive, which has been campaigning to close the refinery. “They’ve been killing people, and we’ve been paying for it.”
Philadelphia Energy Solutions refinery in South Philadelphia
The community group also made it clear they stand with the workers, noting: “The June 21 explosion was a direct result of longtime corporate mismanagement, and we continue to applaud the workers for ensuring the accident was not the catastrophe it could have been.”
The 335,000-barrel-a-day refinery is the largest on the East Coast. Situated along the eastern bank of the Schuylkill River, adjacent to I-76, the complex borders the Point Breeze neighborhood, heavily targeted for gentrification, and the Navy Yard, a former military base that has been converted into an office complex and industrial park. Of the 45,000 residents living within a mile of the refinery, 71 percent are people of color and 32 percent live below the poverty level.
Meanwhile, workers at the plant who were terminated because of the closure filed a class action lawsuit against the company on June 28. They say PES violated the federal Worker Adjustment and Retraining Notification Act of 1988 by not providing them with a 60-day advance notice. The United Steelworkers Local 10-1 contract also requires a 60-day notice of layoffs.
Around 100 non-union employees were dismissed within hours of the closure announcement with no severance pay. Local 10-1, which represents 614 refinery workers, were told they would remain on payroll until July 12.
Earlier this year the company shuffled its management team, froze employee bonuses, and told employees it was deferring matching payments to their retirement accounts until 2020. Nearly half of the union workers are older than 50. PES also tried to reopen contract negotiations, seeking concessions ahead of the expiration of the current contract in September.
Union President Ryan O’Callaghan said USW is investigating whether the company’s insurance covered the destroyed alkylation unit and resulting business losses, estimated by industry experts at over $100 million. “It appears they’re cashing the check and heading for the doors,” he said. (post-gazette.com, June 26)
O’Callaghan stressed that the company had not notified him of plans for closure or layoffs before leaking the news to the media. “This is what they do to us after we safely shut down the plant while fighting a fire,” O’Callaghan pointed out.
Because of the nature of the blaze, Philadelphia firefighters were not allowed onto the refinery to directly combat the fire. USW workers, all skilled refinery emergency workers and operators now facing job and possibly pension losses, worked through the blasts on June 21, got the fire under control and kept the city from a major catastrophe.
Management at fault for maintenance problems
As of June 28, the cause of the fire has yet to be determined, as federal emergency investigators found the site too risky to enter. However, workers point out that PES, which is supposed to be responsible for safety management systems in the refinery, had scaled back a test of the maintenance system scheduled for January.
Over the last five years, PES has been fined $649,417 for violations of air and water protections. (Philly.com, June 22)
In 2018 PES declared bankruptcy, and Wall Street hedge fund investors, Bardin Hill Investment Partners, took control of the refinery’s debt, estimated at $755 million, and assumed ownership.
A 25 percent share of the ownership, derived through the previous owner, Sunoco, is retained by its parent company, Carlyle Group LP and Energy Transfer Partners LP. Sunoco still has responsibility for pre-2012 environmental liabilities estimated at $207 million through its subsidiary Evergreen Resources Management Operations. (Philly.com, June 27)
In 2012 Sunoco received $25 million in public funds, tax breaks and environmental liability waivers in exchange for keeping the refinery open and agreeing to clean up decades of soil and water contamination.
In announcing plans to close, PES officials say they plan to sell the complex for continued use as a petrochemical plant. Some city officials and developers see it as a potential site for expanding the marine terminal in South Philadelphia. But area residents and environmental activists have different ideas.
Hold owners responsible
Neighborhood residents want the site repurposed as a park. Some environmentalists have suggested the site could become a giant wind or solar facility, which would still provide jobs and energy.
But it remains uncertain if PES or Sunoco will assume responsibility for cleanup of the massive 1,400-acre plant, which is responsible for over 72 percent of toxic air emissions and pollution in Philadelphia. There are also issues of heavy groundwater and land contamination. (tinyurl.com/y3vqu4bg)
Toxins released by the refinery include ammonia, hydrogen cyanide, benzene and sulfuric acid, which cause everything from headaches to cancers. Other contaminants on the site and in groundwater include petroleum hydrocarbons, toluene, ethyl benzene and xylene.
A major danger exposed as a result of the June 21 fire was the presence of tanks of hydrofluoric acid (HF) at the refinery. HF is capable of killing millions of people if accidentally released. An HF cloud can travel 7 miles within 10 minutes. At room temperature it can form a toxic cloud, and exposure can lead to severe health problems and even death. Since it destroys nerve tissue, burns may initially be painless; in higher concentrations, HF causes cardiac arrest.
The union credits a female employee with averting a catastrophe by quickly removing an HF tank when the explosions took place.
Philly Thrive is calling on the city of Philadelphia and the state of Pennsylvania to hold present owners Bardin Hill, and past owners Sunoco and its parent company the Carlyle Group and Energy Transfer Partners, responsible for the cleanup. They note that Carlyle took more than $500 million out of PES when it owned the company.
Thrive wants this money returned to pay for workers’ pensions and health care, severance pay and retraining assistance and for the complete remediation of the site.
(Photo: Joe Piette)
