Posted on 06/22/2012 5:02:20 AM PDT by thackney
State regulators have approved a pipeline transfer that’s part of Delta Air Lines’ plan to buy a suburban Philadelphia oil refinery and produce its own jet fuel.
The Pennsylvania Public Utility Commission on Thursday approved the transfer involving ConocoPhillips to Monroe Energy, LLC, the Delta subsidiary that will operate the facility in Trainer, Delaware County.
(Excerpt) Read more at fuelfix.com ...
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Commission chairman Robert F. Powelson extolled the PUC’s contribution to efforts to assist in the Delaware County refinery’s sale, which is being supported with $30 million in grants from the Corbett administration. Powelson called the commission’s role “an excellent example of how government can aid in economic development while still protecting the public interest.”
The $180 million sale, announced in April, is expected to close this month, according to the application with the PUC.
The refinery, which will operate under the name Monroe Energy L.L.C., is scheduled to restart operations in September, after Delta spends about $100 million to upgrade it to optimize jet-fuel production. The plant halted operations in September 2011.
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Delta says it won’t sell jet fuel on open market
http://in.reuters.com/article/2012/06/18/us-refinery-operations-delta-monroe-idINBRE85H12W20120618
Delta Air Lines Inc (DAL.N), which took the bold step of bidding for a refinery to keep a handle on fuel costs, said on Monday it would not be selling jet fuel on the open market once the deal closes.
Monroe will spend about $100 million to convert the 185,000 barrel-per-day refinery in Trainer, Pennsylvania, to increase its jet fuel output to 52,000 bpd or about 32 percent of output, cutting back production of gasoline.
“We will produce and sell the jet fuel to ourselves,” said Eric Torbenson, a spokesman for the airline, the second-largest in the United States.
Sounds like a good idea to me. I read recently that the amount of actual profit an airline makes on a flight amounts to that paid for one seat. A lot of their expenses are for fuel, so this could only help.
ping for later
The difference a Republican governer can make. I can’t imagine a “greenie” Democrat doing anything other than BLOCKING efforts to re-open a refinery. Good job, Corbett.
Delta is mostly non-union.
So no way they’d get protected status from the Baraqqi regime.
If it was one of the union airlines, you might be on to something.
Thanks, and you are correct, did not take that into consideration in the questions posed. Are all the big financial institutions that are too big to fail also unionized?
My guess is no, typically white collar outfits like that are mostly non-union.
There may be segments of workers that are union like janitors and maintenance, but likely a small fraction of the total.
I think this operation was barely profitable so it's not a slam dunk. My experience in business is that when big companies diversify into areas where they have no experience it often goes badly.
Thanks for the responses. My ignorance on these matters of too big to fail supersedes your responses, thus once more thanks. Have too much to learn and definitely not enough time. Thank God for FReepers.
It will divide the attention of executive management between two very different complex businesses. The result of that is usually not good.
I don’t get this. They claim they’ll save money, but they will still effectively be paying market rate, as every gallon they use could have been sold to someone else. It sounds like they will be increasing the amount of jet fuel refined, by restarting a shuttered plant and “retooling” it for jet fuel, but if that is economical why wouldn’t someone in the jet fuel industry do it? And how are they going to get the fuel to the planes, some of which need to refuel when they are thousands of miles away?
That’s true, they don’t have expertise in this area and it could be cumbersome. Perhaps they will structure it in such a way that it’s a quasi-independent unit or at any rate in such a way that they can easily spin it off if it becomes a problem.
One of Delta’s big advantages as a company is that they are non-union, so there might be big savings to them on the cost of fuel if they eliminate the unions from the mix. Then again, I’m not sure this is possible.
Monroe LLC, as in Monroe, LA, either has experience in the oil biz or has people who know both business and technical sides of refining.
I have preferred Delta for a long time, because they have a different attitude than “f___ you” airlines like AA and United. Only glitch was when they bought scummy NorthWest and stupidly keep on some of the NW folks who obviously tried to wreck Delta.
The other option is paying to transport fuel from other areas at more cost. This appeared to be the only option to bringing the refinery back into service. They don't need the refinery to turn much of a profit compared to a 3rd party refinery. They need a reliable source of fuel.
The refinery will once again be union workers.
USW members set to get back on the job in Trainer
http://delcotimes.com/articles/2012/06/13/news/doc4fd7eacf843c2133168845.txt?viewmode=fullstory
...Of the former ConocoPhillips employees, all 177 workers who applied and tested for jobs with Monroe were approved.
“You have a job if you want it,” Stephano said, adding that some people retired and some took other jobs.
He said there is still a need for about 35 other jobs, which provide some opportunity to the workers from Sunoco in Marcus Hook.
vertical integration
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