Following a series of explosions and a catastrophic fire that took days to extinguish, Philadelphia Energy Solutions — the largest oil refinery on the East Coast — is shuttering its South Philadelphia facility in two weeks, laying off more than 1,000 employees and causing gasoline futures to spike.
Here’s what you need to know about the refinery closure.
In a statement Wednesday, the company announced plans to prepare the South Philadelphia plant for sale, though it was unclear if there are any potential buyers, or what a buyer would do with the facility.
At 1,400 acres, PES is the largest refining complex on the eastern seaboard, with extensive infrastructure that would be valuable to other energy-related enterprises.
And while environmentalists dream of converting the refinery to a renewable energy facility, preparing the plant for anything but processing fossil fuels could take years.
Before it was known as PES, the South Philadelphia complex has a long history as an oil refining site. The Atlantic Refining Co. first opened for business in 1870 at Point Breeze. The Gulf Oil Corp. opened the second site at Girard Point in 1926. Sunoco, then under different ownership, acquired both plants in 1988 and 1994. Then, in 2012, Sunoco formed a joint venture with private-equity Carlyle Group. The joint venture declared bankruptcy in January 2018, and completed the $635 million financial restructuring Aug. 7. The refinery also has a history of explosions and fires going back decades.
Questions about the fate of the refinery emerged immediately after an explosion followed by two others rocked the PES refinery next to the Platt Bridge in South Philadelphia about 4 a.m. Friday, triggering a massive fire and sparking fears of an airborne toxic event. The explosion’s fireball was so intense and hot it was captured by a weather satellite in space. Five refinery workers suffered minor injuries. The estimated price tag for replacing the unit in the fire was pegged at $100 million.
Officials have said since the fire that the air quality in the area of the refinery remained safe. On Tuesday, Kenney said there was no lingering health threat.
Investigations into the cause of the explosion and related safety issues began Monday. No cause has yet been determined by four investigators from the U.S. Chemical Safety and Hazard Investigation Board at the scene, officials said Thursday. Events began around 4 a.m. June 21, when hydrocarbon vapors were released in the alkylation unit that converts crude oil, said Kristen Kulinowski, interim executive for the independent agency. Calling the explosion a “fundamental failure in the system,” Kulinowski said the investigation has been impeded by the extent of the damage to the site, describing the plant as “a lot of twisted metal and a lot of debris that had been scattered across a large area.”
Other agencies conducting investigations include the U.S. Occupational Safety and Health Administration (work safety), and both the federal Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Philadelphia Fire Marshal’s Office (cause of explosions and fire). The city also had assigned a task force to explore the cause of the fire and what steps might be needed to improve safety at the complex.