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Part 1: Where We Are Now

KYW Regional Affairs Council

"The Delaware Valley Unrefined"


By David Madden

PHILADELPHIA (CBS) -- What has brought the region to this stage, where two major oil refineries have been shut down and a third could join them in a couple of months?

You'd think with gas prices as high as they are, refineries are making money, right?  Not around here.

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(Sunoco CEO Brian MacDonald. Credit: David Madden)

"We've lost nearly a billion dollars in refining for the last three years," says Sunoco CEO Brian MacDonald (right), "and in order to secure the futures of our non-refining employees -- 7,600 employees -- we decided we had to exit the refining business."

Sunoco's refining plant in Marcus Hook, Pa. is already closed, and the Philadelphia plant could follow suit come July if a buyer isn't found.

For ConocoPhillips, it's was a matter of getting out of the northeast where, between antiquated equipment and higher labor costs, it costs more to refine crude, according to company officials.

But there's growth in refining in the Gulf of Mexico and the Midwest, says Robert Greco of the American Petroleum Institute.

"There, the larger refineries are getting larger and more efficient," he tells KYW Newsradio, "so you're likely to see some changes in the supply of products throughout the country as a result of these changes."

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(United Steelworkers local president Jim Savage. Credit: David Madden)

And Jim Savage (right), president of Philadelphia local 10-1 of the United Steelworkers union, says that trend is causing some of those now looking for work to consider a change of address.

"Some of these people are looking to move to the Gulf Coast, uproot their families, so they can find other refinery work," he says.

Those who don't relocate will likely have to adjust, and that won't be easy. And refinery workers are not the only ones affected, because the ripple effect -- particularly should the South Philadelphia refinery shut down -- will be significant in the region.


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