Employees’ union looks at options to closing of Tesoro fuel refinery

The union representing workers at Tesoro’s Hawaii refinery said Wednesday it is considering a campaign to save the facility from closing, including asking the state for financial assistance that would make the refinery more attractive to a potential buyer.

The move being contemplated by the United Steelworkers would be similar to what the union did last year to help find buyers for two refineries in the Philadelphia area that were slated to be closed, USW officials said.

The employees at the Campbell Industrial Park refinery are represented by the union’s Local 12-591 based in Mount Vernon, Wash. Pat Koge, the union’s unit chairperson at the refinery, said she will fly to Washington State next week to meet with the president of the local.

"We’re going to have a meeting to discuss this. At this point it’s too early to say exactly what direction we are going to take," Koge said.

Galen Prescott, a staff representative for Local 12-591 said the union will likely ask its international office in Pittsburgh to get involved.

San Antonio-based Tesoro announced Tuesday that it will close the refinery by April and convert it into an import, storage and distribution terminal. The move will result in the loss of jobs for 180 to 200 of the plant’s 240 workers.

Tesoro officials said the decision to close the 94,000-barrel-a-day refinery was made after the company tried unsuccessfully for a year to find a buyer for the facility.

A similar situation existed last year with a Sunoco refinery in South Philadelphia, said Lynne Hancock, a USW spokeswoman. Sunoco was on the verge of shutting down the refinery when the USW got involved and helped secure a $25 million package of state subsidies. The plant also will be eligible for tax abatements and tax-free bond sales.

The subsidies attracted the interest of The Carlyle Group, a private equity firm, which announced in July that it was investing an undisclosed amount in the 330,000-barrel-a-day refinery as part of a joint venture. Sunoco, which retained a minority stake, said the move allowed it to save 850 jobs.

The state of Pennsylvania also provided $30 million from a grant program to help prevent the closing of the Conoco­Phillips refinery in Trainer, Pa., about 20 miles south of Philadelphia. The refinery was bought by a subsidiary of Delta Air Lines, which said it would save about $12 million a year by refining its own jet fuel. About 400 workers were in danger of losing their jobs had the 185,000-barrel a day refinery closed.

"The union played a role in finding buyers in both cases," Hancock said. "We were the spark in keeping those refineries operating."

A spokeswoman for Gov. Neil Abercrombie said the United Steelworkers have not contacted the governor about state support for the refinery. In addition, Tesoro did not bring up the subject of state subsidies during discussions with the administration that took place before Tuesday’s announcement about the closing, said Abercrombie spokeswoman Louise Kim McCoy.

Tesoro officials said the company was proceeding with plans to sell the terminal, distribution and retail assets in Hawaii.

"Tesoro’s decision was based on internal strategic considerations. A number of interested parties reviewed the assets, but we did not receive credible bids for the operations," Tesoro spokes­man Lance Tanaka said in an email.

"Tesoro does not know what potential buyers might ask of state of Hawaii or federal officials."