A year later, there’s hope in Hook, Trainer

U.S. Rep. Pat Meehan, R-7, of Upper Darby got his first glimpse into the calamity that the closure of the regional refineries could reap two years ago during his initial stint as a congressional candidate campaigning on the campus of ConocoPhillips’ Trainer facility.

One day, the company hosted a candidates’ day in which all those seeking elected office were welcome to stand at a table with their staff under a tent onsite to hand out literature and answer questions and employees ate their boxed lunches.

For an hour and a half, the candidates made themselves available and Meehan recalled a recurring theme.

“I was struck by how many people came to me in a very serious and somber way and said, ‘You can’t let them take our jobs,’” he said. “That was where I learned about the concern that people had about these things being vulnerable. We came back, we said, ‘Boy, you know what life would be like down here if we didn’t have these refineries?’”

The congressman didn’t realize at the time the extent to which that fear would be felt.

As a result of his refinery experience, Meehan intentionally reached out to establish relationships with ConocoPhillips and Sunoco offiicals to understand what their pressures were.

In addition, he began to form a group that would serve as a basis for the larger stakeholder consortium that was created later by gathering some of the trade union officials and company officials together last summer.

Then, the day after Labor Day, Sunoco executives announced they planned to shut the Marcus Hook and Philadelphia refineries if new owners weren’t located for them.

Brian MacDonald, now the company’s CEO, who was the CFO at the time, informed the congressman of the decision.

“That was sort of a very distinct change of direction,” Meehan said, adding that he had been working on obtaining a Jones Act waiver to enable the company to get foreign flagged vessels approval to operate more easily in the area.

“Having worked very hard to get the Jones Act waiver was like, ‘We’ve done something that hasn’t been done anywhere else in the United States for this effort, geez, what are you guys doing?’” he said. “I was disturbed. I was angry. It was like, ‘What the hell?’ We had worked our tails off for these guys and now, they’re backing out of this community on the refining side? It was obviously a huge kick in the gut for the entire region.”

Brady received a call from one of Sunoco’s vice presidents.

“This was a big deal,” Brady said. “This was a big deal.”

Meehan said he decided to go forward to attempt to obtain the best possible outcome.

“Trust didn’t have a great deal to do with the requirement of the moment in my mind,” he explained of any misgivings some may have had for company officials.

Meehan explained his mindset: “If people are going to be angry, and they should be, but they say they are trying to sell this facility, if there is even going to be a potential buyer, their interest will only be negatively impacted if they see all kinds of anger and dissention at the local level and so, it’s imperative that we find some way to get people together on the same page.”

Then, on Sept. 27, ConocoPhillips’ executives made a similar pronouncement about the Trainer refinery, yet they planned to idle the facility by week’s end.

A day later, a group of stakeholders arranged by Meehan including fellow U.S. congressmen, state and local officials and union leaders met at the Marcus Hook Community Center.

Meehan reiterated, “We only got one chance to get this right and we’ve got to find a way to stay together on it.”

He said many were trying to grapple with the situation.

“It was almost shell shock among people, but, ok, we’ve got a job to do here,” Meehan said. “We began to appreciate that we need to send a message to potential buyers about the willingness to work with them.”

The congressman had already had former associations with some. He and Michael Krancer, secretary of the Pennsylvania Department of Environmental Protection, had practiced law at Dilworth Paxson previously. Steve Aichele, Gov. Tom Corbett’s chief of staff, was Meehan’s property professor in law school.

He even had had a connection with the United Steelworkers, although they had campaigned strongly against the Republican in his bid for the seat. But, those differences were set aside.

“I never really felt any animosity or unwillingness to work together,” Meehan said of the union officials. “That wasn’t even an issue. We were all in it together. It was the jobs in the region. It could have very easily fallen into pointing fingers and it didn’t. We looked and said this has got to be a time in which we figure out how you make something work.”

Part of the strategy Meehan explained was to learn from those who had gone through this experience, so he reached out to Tom O’Malley of PBF Energy.

The congressman was at an event at Anthony’s in the Drexeline Shopping Center when the executive called him. He walked out into the parking lot.

“We haven’t met,” Meehan told him, “but I represent the district. You’ve been through this before. We need to sell these refineries. What’s your sense?”

The answer was glum, largely because of the high premium, sometimes $18 to $20 a barrel more, paid for the North Sea crude processed at these facilities.

“I’ll let you know you’re not going to sell those refineries,” O’Malley told him. “It’s just not going to work.”

Meehan said that was sobering. “I was very deflated after my conversation with him.”

After that, Delaware governor Jack Markell spoke with members of the Greater Philadelphia Chamber of Commerce, telling them about the redemption of the Delaware City refinery.

But, the same message was repeated for the Delaware Valley sites: Why would anybody buy these refineries with the economics of refineries being what they are?”

Meehan said he echoed the sentiment of USW Local 10-1 Jim Savage, who represented the hourly Philadelphia workers, in saying, “Nobody believed in us but we kept pushing and I believe that’s true.”

The congressman said he looked at where a case could be made to determine the impact of the closing of these refineries, which resulted in the March field hearing at Neumann University of the U.S. House Homeland Security Subcommittee on Counterterrorism and Intelligence.

Similarly, U.S. Sen. Robert Casey, D-Pa., held a hearing of the U.S. Congressional Joint Economic Committee in April to delve into the same issue.

Brady said the thousands of refinery jobs lost would only be exacerbated by the related work from the truckers to the restaurant and bar workers.

In an analysis completed by the Pennsylvania Department of Labor & Industry, job losses were estimated to reach a potential of 36,000 with state and local entities in jeopardy of losing more than $560 million if the refinery closures were to occur.

Meehan said there was an effort to pull together a consortium of local investors to allow the employees to take over the Sunoco facilities. He added, however, that Sunoco officials determined that they weren’t a credible buyer.

He said the rationale was, “If we can’t make it run, we can’t see how they’re going to make it run.”

Meehan tried to maintain hope for his constituents.

“It’s almost like if they see fear in your eyes, they’ll get fear,” he said. “You’ve got to continue to make people believe.”

Sometime in November, his staffer Matt Sturgis received a call from Delta officials to meet with the congressman.

On Nov. 30, they met in Washington.

“We need complete confidentiality here,” Meehan was told. “We are thinking about looking at the refineries in your district because of the tremendous pressures that we have but we don’t know how to begin to do this without it getting out there and having it stopping before it even got started.”

It provided some optimism for the situation since they weren’t as concerned about the higher priced crude oil, but were interested in decreasing their costs for jet fuel.

“You know what?” Meehan thought. “This could work. It was a completely different business model.”

So, he sent them in the direction of the Governor’s Action Committee and the county Commerce Department.

In the meantime, Meehan continued meeting with company officials.

In one meeting with Sunoco, Meehan recalled MacDonald explaining to him, “You can only take a million dollars a day for so many days. We’re hemorrhaging.”

However, there were no clear answers when he asked if Marcus Hook was truly attempting to be sold or if it was being sold piecemeal.

Meehan said, at the time, one Steelworker told him, “I take an awful amount of heat from my membership for hanging in like this here and I don’t want to get to the end and just find out we’ve just been stabbed in the back. You’d said we’d stick together. It was the right thing to do, I hope.”

Meehan answered, “I hope you’re right.”

For some time, Brady said he didn’t trust Sunoco.

“No, I didn’t believe they were trying to find a buyer,” he said. “I didn’t honestly believe that they wanted to find a buyer. I talked to four, five people that wanted to buy it. They said they didn’t get the information they needed.”

In March, following the layoffs of workers at the Trainer refinery in January and the bulk of the Marcus Hook workforce in February, the dynamic began to change.

It was then, Meehan said, “I’m beginning to believe that we could save Conoco. They’re not telling us specifically what they were negotiating but they said we’re making good headway.”

Then, Lynn Elsenhans, former Sunoco CEO, stepped down to allow MacDonald to take the helm on March 1.

“MacDonald on his own initiative began the process of reaching out to the stakeholders and trying to communicate to them his genuine interest,” Meehan said.

Brady agreed, “MacDonald was trying to put a good faith, a best effort forward. He was a more honest broker in trying to keep the plant open.”

The Philadelphia congressman said he had weekly conversations with the new CEO.

“We had conference calls back and forth forever,” he said, and then the capital and regulation hurdles began to be removed.

In the end, two of the three refineries - Trainer with Monroe Energy and Philadelphia with Philadelphia Energy Solutions - found owners to keep the facilities operating.

“It was not foreseeable at the outset that there was a solution,” Meehan said, “but the commitment of everybody to stay focused and believe in each other created the environment and capacity for these innovative approaches to root.”

Brady added, “I was absolutely shocked that it got done. I never thought it was going to happen.”

He spoke of the night at Lefty’s tavern in Marcus Hook after the USW Local 10-1 ratified an agreement with Philadelphia Energy Solutions in which a man approached him with his child in his arms and his wife standing by his side.

What he said left a tear in the eye of the seasoned politician.

“If this didn’t happen, we’d be here anyway,” the man told him. “We work hard, we drink hard.”

The only difference, the man said, was without their jobs, they would have gone home and fought with their families because of the stress of not being able to pay for their homes or for vacation.

“Now, that you saved our jobs,” the man told Brady, “I think you saved some lives here.”