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On August 1, 2020, Marathon Petroleum Company made a major announcement regarding their oil refinery in Martinez, California. In a terse statement the company said, “We will indefinitely idle these facilities with no plans to restart normal operations.” The announcement also included a refinery in Gallup, New Mexico.
You would think that closing an oil refinery in California would result in cheering and ecstatic celebrations from the state’s environmentalists and their allies in the ruling party in Sacramento.
And it did. Up to a point.
The union leaders, who on many occasions side with the environmentalists on critical issues and whose members worked at the plant, were not happy.
“The decommissioning of the Marathon refinery means the loss of thousands of good-paying California blue collar jobs at a time of great economic uncertainty,” said Robbie Hunter, of the State Building and Construction Trades Council of California.
Many of his members numbering in the thousands perform work at the plant during any given year.
And it’s not just the full time employees or the many contract workers at the refinery who the closure will affect. It will have a crippling impact on the surrounding community.
As stated by Marathon there is also the “multiplier effect” that inevitably happens when a large facility, be it refinery or factory, closes. And that is because, for every job at the refinery, there are eight in the community that support that one job.
Simply put, the economies of these communities will be devastated at a time when the COVID-19 pandemic has already wreaked havoc on them. It is a double hit.
Environmentalists and local politicians said that while they are pleased, they said there needed to be a “just transition” for the workers to the new green carbon free Utopia they are creating in California.
For years, they have been blaming the oil companies for all the pollution and damage to the environment. Then, when the companies finally close the refinery, they blame the companies. Just as Hollin Kretzmann of the Center of Biological Diversity did when she expressed her displeasure with Marathon for, “tossing their employees to the curb with very little warning.”
But whose responsibility is it to develop plans for a “just transition” for the workers of the refinery? And whose responsibility is it to develop plans to replace all the jobs and economic activity that will be lost by the “multiplier effect?”
Congressman Mark DeSaulnier, who represents the district where the Marathon Martinez refinery resides, said before the pandemic and the corresponding oil industry slowdown, he had begun working with environmentalists and unions to develop plans for the transition. But what has been accomplished?
It seems it was easier to cast blame at the oil companies all these years and use them as a political scapegoat than to do the hard work of developing plans for their eventual closure which he and other politicians and environmentalists championed.
But the closure of the Marathon refinery will bring other problems to California. The Marathon Martinez facility represents 8.5% of California’s refining capacity, which is not an insignificant number.
With the state’s unique complex seasonal formulations for gasoline that are produced and sold exclusively in California, any loss of refining capacity will inevitably increase prices at the pump.
Before COVID-19, the economy of the United Sates and California were booming. Gas consumption was high and poised to go higher.
Marathon Petroleum closed the Martinez refinery in response to economic circumstances much of which was beyond their control. They have done what they have done so that they can survive. It is a business decision.
As oil companies have learned the hard way over the years, they are damned if they do and damned if they don’t.
Greg Karras an environmental consultant who decried the closing of the Martinez refinery is a perfect example of how the environmental community talks a good game, but when it comes to developing real plans of action, they are all hat and no cattle.
In July of this year, he released a report he had prepared for the Communities for a Better Environment entitled, “Decommissioning California Refineries: Climate and Health Paths in an Oil State”.
In the report he states:
“The research reported in Decommissioning California Refineries, done for the environmental justice group Communities for a Better Environment, reveals specific answers to the parts of this urgent question framed by communities in the dominant oil refining state on the U.S. West Coast: What is the least-impact, most socially just, most feasible path to climate and health protection in California?”
The report poses “this urgent question,” using reams of statistics and speaking passionately about environmental justice to make his case, but nowhere does it offer specific plans about the “just transition” for displaced workers and “transitioning” the economies of the communities where the refineries are.
The halls of government and think tanks are lined with reports and studies like Karras’ that are long on posing philosophical questions on how the author thinks things should be, but are short the nuts and bolts of how to get there.
Real solutions need practical plans based on the real facts on the ground and not the wishful thinking of well-meaning activists and their hired consultants. Closing refineries to meet environmental goals is easier than dealing with the economic fallout that will follow.
California’s environmentalists and some political leaders have been wishing for the closure of the state’s refineries for many years. But a transition is more complicated than simply flipping a switch. More planning is needed, or we will be lamenting that we should have been more careful of what we wished for.