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Tesoro ups layoff estimate to 210 workers at Kapolei refinery

By Alan Yonan Jr.

LAST UPDATED: 11:35 a.m. HST, Mar 04, 2013

  Craig T. kojima / ckojima@staradvertiser.com @Caption1:The United Steelworkers union, representing workers at Tesoro's Hawaii  refinery, is considering a campaign to keep the plant operating.

Tesoro Corp. has told state officials that it expects to lay off 210 workers in May when it shuts down its refinery in Kapolei, more than the 180 to 200 employees  previously estimated  by the company.

Tesoro announced on Jan. 8 that it planned to close the refinery and  convert it into an import, storage and distribution terminal.

The updated layoff count was included in a letter Tesoro sent Feb. 28 to the state Department of Labor and Industrial Relations. Federal law requires employers to provide notice at least 60 days in advance of any mass layoffs of 100 workers or more.

“Approximately 210 employees will be separated from employment. At this time the company anticipates that a group of affected employees will be terminated sometime during a 14-day period beginning on May 1, 2013,” according to the notification letter written by Thomas Weber, vice president of Tesoro’s Kapolei refinery.

“This announcement and the above timetable are based on the best information currently available,” Weber wrote. “however, various factors may still affect these plans and the timing of employee separations.”

Tesoro is seeking a buyer for the terminal, as well as its local network of 31 gas stations.

San Antonio-based Tesoro put the underperforming refinery up for sale in January 2012, but was not able to find a buyer.

The Tesoro plant is the state’s largest of two refineries with a capacity of 94,000 barrels a day. It employs 240 people. The other refinery, operated by Chevron, has a capacity of 54,000 barrels a day.

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Kawipoo wrote:
Abercrombie does not care because he hates big bad oil. Even though these jobs are some of the highest paying jobs in the state he wants to replace them with low paying solar installer jobs. This state gets what it deserves. Nothing and a troll for governor.
on March 4,2013 | 09:56AM
frontman wrote:
Hope and Change................. don't you love it. Thank you obama
on March 4,2013 | 01:43PM
allie wrote:
has nothing to do with neil at all...
on March 4,2013 | 01:51PM
Kawipoo wrote:
He does because he is not business friendly. He and the state government continually say they don't want refineries located here.
on March 4,2013 | 04:05PM
niimi wrote:
I agree. meanwhile, $5 gas should hit us this year. $6 gas should be about 2 years away.
on March 4,2013 | 04:13PM
niimi wrote:
talk to your friend of a friend from Tesoro. Your gas prices are going up 20%. All your food, toys, home supplies will all go up in cost because all their fuel is going up in price, too. Your trip to the mainland will go up by $150 on a round trip to the West Coast.
on March 4,2013 | 04:07PM
turbo wrote:
THIS IS NOT GOOD!!!! Everyone in the state of Hawaii will suffer with higher petroleum prices. This affects prices that people don't even realize....Not only fuel for your cars, anything that gets delivered to a retail outlet or your home (which is almost everything). It will affect the tourist industry with higher jet fuel cost for the airlines and also less tourist spending because of the high cost of goods and service. Price of electricity will increase as HECO is years away from burning LNG (if even attainable). Too much things rely on petroleum right now to try and force a phase out, it need to be done very slowly and carefully so we don't disrupt our fragile economy. If Tesoro shuts down I will really regret the day when any type of fuel delivery disruption happens, the state of Hawaii will take CRACKS.
on March 4,2013 | 10:38AM
Wahiawamauka wrote:
We gonna get it!
on March 4,2013 | 01:41PM
allie wrote:
no hon. Hawaii will buy refined oil from the most competitive places we can. Umm..the old arrangement was a real rip[ off as the unrefined oil came from expensive Indonesia. Nearly 35 dollars a barrel difference between Indo. and West Coast or Texas oil.
on March 4,2013 | 01:53PM
niimi wrote:
Au contraire. All the specialty blends of fuels, diesel, jet fuel will now have to be shipped in. Volatiles cost a lot more to ship because of their D.O.T. hazard class as defined in part 49 of the Code of Federal Regulations (CFR).
on March 4,2013 | 04:09PM
niimi wrote:
I agree. When we lost 95,000 barrels per day refining capacity and can't make the range of products such gasoline, diesel, jet fuel, ship fuel, asphalt and fuel oil for electrical generation. All that goes away. Shipping in volatiles with a high hazard class will mean high freight costs for the specialty fuels.
on March 4,2013 | 04:12PM
iwanaknow wrote:
Can't Hawaii's Unions (and any others with big bucks....like Ellis (worth 41 BILLION, with a B, who bought Lanai) buy the refinery and save these jobs?
on March 4,2013 | 10:39AM
bruddahlee wrote:
Would you go out and buy some worthless item to save some employee's job?
on March 4,2013 | 11:40AM
Papakolea wrote:
The cost to do any type of refinery or value-added process in Hawaii is prohibitively high due to a lot of factors but mostly the lack of economies of scale. With the lower cost structure of refining overseas, Tesoro will be able to undercut Chevron so we'll see lower prices in the short term. Then Chevron will decide that in order to be competitive, they need to close the local refinery and convert to a storage facility. Don't expect lower prices, though. With a duopoly, there's very little incentive for price competitiveness. We'll really see it in our electricity cost since we'll no longer have the low-grade by-product from the refineries to burn for the electricity generators.
on March 4,2013 | 11:04AM
allie wrote:
on March 4,2013 | 01:53PM
Kawipoo wrote:
on March 4,2013 | 04:06PM
rkcu wrote:
Nope. Wrong. If this flawed theory were true, Aloha would have priced both Tesoro and Chevron out of this market since they have the ability to bring in product. Get it through your heads that like everything else in the Islands, IT'S THE SHIPPING!! To individually bring in every product that is refined from a barrel of crude will be more costly than refining it here. Both these oil companies did terminal studies and they both chose not to go in that direction. The only reason Tesoro is doing it now is it will be easier to sell it off, possibly to local companies, and get the hell outta Dodge. Our state just sucks at taking care of the businesses.
on March 4,2013 | 08:34PM
Maneki_Neko wrote:
Ever notice....when the State, City or private sector wants to justify a project or grant a variance they talk about the "multiplier effect" where the new jobs create so much more wealth as the dollars circulate in the economy but when a big layoff happens, nobody talks about the "reverse multiplier" which means that a loss of 210 jobs also cycles through the economy and creates much bigger losses than just the people involved. This is bad news for us.
on March 4,2013 | 11:13AM
Wahiawamauka wrote:
You are right Maneki_Neko.
on March 4,2013 | 01:45PM
publicuser wrote:
Anyone notice that Tesoro stock is near all-time highs again?
on March 4,2013 | 11:58AM
Wahiawamauka wrote:
Don't believe Abercrombie and his administration when they say gas prices should not be affected much. That is total SHIBAI ! Hold on to your wallets!! It's going to get interesting. LOL
on March 4,2013 | 01:40PM
tiki886 wrote:
If the main source of their revenue is exporting refined products to the mainland and not the local market, then it makes sense to refine petroleum closer to the main source of your revenue market and import the finished product back to Hawaii to minimize operating capital costs.

For the longer term, Tesoro already sees the writing on the wall that less bunker fuel will be purchased by HECO and less revenue will be generated because Hawaii's renewable/alternative energy goals and priorities will replace a good chunk of their business by 2030.

Hawaii may be less energy dependent on petroleum but at what cost?

on March 4,2013 | 02:18PM
9ronboz wrote:
Anti Business, anti military & anti tourism folks. Lets hope more big business does not do the same. People losing jobs and small business that does business with large company hurts the most.
on March 4,2013 | 02:33PM
lowtone123 wrote:
Tesoro is seeking a buyer for the terminal, as well as its local network of 31 gas stations. If their intent the whole time was sell off the whole thing couldn't they sell the refinery and keep these people employed?
on March 4,2013 | 03:14PM
steveoctober wrote:
They ran the refinery to the ground over the years, no upkeep done. Toxic, no one would touch it at this point.
on March 4,2013 | 04:08PM
niimi wrote:
Just wait until that storage facility is built perhaps in a year or so as all the fuel prices are going up 20% to 30%. Chevron's plant has narrow production capability and capacity. Tesoro made all the specialty fuels on island. All the jet fuel was made by Tesoro. All diesel was made by Tesoro. All the special blended fuels was made by Tesoro. All that goes away now. I see $5 to $6 gas here to stay. I see airline travel prices going much higher. I see a goods shipping costs going higher on-island because fuel will cost that much more. And all this is happening before Mayor Caldwell's 5 cent gas tax hike.
on March 4,2013 | 04:06PM
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