We Can Save Philadelphia’s Sunoco Refinery Jobs

For the tens of thousands whose livelihoods depend on the Sunoco and Conoco-Phillips oil refineries in Philadelphia, Marcus Hook and Trainer, the Grinch arrived early this Christmas, announcing that all three facilities would be closing in the near future.

But unlike the Grinch, who delighted in causing misery for the sake of misery, the oil companies seemed to have no choice. Their hand was forced by a combination of market forces that saw them losing millions every single day.

And now, short of the companies finding buyers, those workers will be thrown out into the cold, unemployed in an America that is plunging further into the abyss—an America that doesn’t make a bloody thing anymore. An America with the highest corporate taxes in the world. An America with trade policies that sell out its own citizens.

Making matters worse, most of the workers will be looking for new jobs in Pennsylvania, one of the least competitive states in the nation when it comes to attracting new companies.

Doom and gloom? No, just the hard truth. And here’s another one: Short of packing up and moving to refinery-laden Louisiana, most of the laid-off workers will never find a job in this region at a similar pay scale or requiring the same skill level.

Welcome to The New America, one that too often puts the interests of its competitors—and even its adversaries—ahead of its own citizens.

Compounding the problem even further (if that’s possible) is the unwanted involvement of those who caused our economic mess in the first place: the politicians. And, as they continue to demonstrate, they don’t have the slightest clue as to how to right the ship.

Politicians need to be taken out of the equation. Pandering for votes by holding pointless meetings with refinery and union officials isn’t solving anything. It only gives false hope (and provides the pols with 30-second sound bites).

But here’s the good news: There is hope—more than can be imagined. Those refinery workers could not be sitting on a better spot on Earth to reap the rewards of a massive opportunity: the correct utilization of the Marcellus Shale natural gas bonanza. If the politicians do their most important job—and the only one they should be doing—of cutting bureaucratic red tape and slashing stifling regulations, the free market will take hold, creating jobs and wealth of unprecedented proportions.

But that’s a tall order.

*****

Former Governor Ed Rendell, while certainly an affable chap, was never mistaken for a genius, especially when it came to getting Pennsylvanians working again. His mentality was that a paternalistic government knows best, derived no doubt from the fact that he virtually never held a private sector job in his life. Thus, he was wholly incapable of understanding the difficult decisions that businesses must make to maintain profitability.

So it was no surprise when, in 2009, Rendell inserted his nose where it didn’t belong, publicly excoriating Sunoco for its decision to lay off some of its salaried workforce. Sunoco officials had stated the move was geared toward remaining competitive, as the company was anticipating a “more difficult economic reality” moving forward.

Taking his criticism even further, Rendell flatly rejected the decision-making of Sunoco’s chairman and CEO Lynn Elsenhans, arrogantly saying he couldn’t take her at her word. Incredibly, he went so far as to state the “real” reason for the layoffs: “They are solely intended to make a profitable company more profitable and helping pad the dividends paid to shareholders.”

So if Ed was correct (which is always the case, just ask him), Sunoco’s recent decision to shut down its refineries—permanently—must be because it’s just making too much money.

Or…

Maybe the folks at Sunoco had a slightly better idea than Ed Rendell of the deteriorating market conditions coming down the pike, and maneuvered accordingly to keep its head above water. Despite its best efforts though, Sunoco did not meet with success, as the closures clearly indicate.

Now the big questions loom—can the refineries be saved, will a buyer be found, can they be converted to refine natural gas, and, of course, what will be the fate of the thousands of families whose livelihoods depend on the refineries?

While Rendell is out of the picture, the involvement of other elected officials still leaves a lot to be desired.

Earlier this week, members of Congress emerged, extremely frustrated, from a meeting with refinery officials, complaining that the company wouldn’t reveal details about highly confidential strategic negotiations with potential buyers.

Earth to Congress: Have We Met? Who do these guys think they are that Sunoco owes them an explanation for anything, let alone sharing privileged information of the highest magnitude? And do we even have to mention that Congress hasn’t been able to keep anything secret in 200 years?

And last month, a bipartisan congressional delegation called on the U.S. Energy Information Administration (along with the U.S. Department of Energy and the Federal Energy Regulatory Commission) to conduct an impact analysis on the potential of the refineries’ closure.

Uh, here’s a not-so-humble message to each member of that delegation: your proctologist called. He found your head.

Are they serious? Another blue-ribbon study to tell us what any sixth-grader already knows?

It will be bad. Very, very bad. Jobs will be lost, families thrown into chaos, houses foreclosed, businesses shuttered. The refining capacity for the East Coast will suffer tremendously (not helped, of course, by the fact that we haven’t built a new refinery in America since 1976). Prices will increase. Volatility will spike. And America will, yet again, find itself bent over the barrel, spending billions more petro dollars buying oil from hostile nations because we (READ: Congress) will not do the obvious—implement a policy of energy independence.

So let’s save the tens of millions of taxpayer dollars that an absolutely meaningless study costs, and do something novel: Solve the problem!

I’ll reiterate Step One. The politicians woefully short on private sector experience and who lack the necessary vision to turn an unfortunate situation into a positive one need to get out of the way and let business-savvy entrepreneurs do what they do best: create opportunity.

Energy is the single most important industry in getting America back on her feet again. And retooling the refineries here in our backyard—the right way, for the right product, to fulfill the right vision—is the blueprint to make that a reality.

And what a Christmas present that would be!

Note: The next installment of this series will specifically examine what should be done to save the refineries and their jobs.