An Unrefined Ending

The report examines the lifecycle of the Philadelphia Energy Solutions (PES) refinery, from its 2012 formation via private equity and public subsidies to its 2019 explosion and subsequent closure. It highlights how a reliance on discounted Bakken crude, high regulatory costs, and private equity management contributed to financial instability. The author argues that the lack of proactive city planning and community capacity left Philadelphia unprepared for the refinery's demise, resulting in a bankruptcy auction that determined the land's fate with minimal public input. Key lessons include the need for technical resources for community oversight, the importance of honest engagement with labor unions for worker transitions, and the increased operational risks associated with financially distressed refineries.

• The Philadelphia Energy Solutions (PES) refinery's initial profitability was driven by exploiting 'shut-in' Bakken crude supplies delivered by rail, which traded at a significant discount compared to Brent crude between 2011 and 2015.
• PES was forced into bankruptcy in 2018 due to a combination of losing its feedstock competitive advantage (as pipelines moved Bakken crude to other regions), aging infrastructure, and high costs of complying with renewable fuels standard (RFS) regulations.
• During its 2018 bankruptcy, PES successfully lobbied the EPA to excuse approximately $350 million in RFS compliance obligations, a move supported by the Trump administration's tendency to award hardship waivers to small refineries.
• The refinery's closure was precipitated by a June 2019 explosion caused by the rupture of a corroded elbow joint in the hydrofluoric acid (HF) alkylation unit, which the US Chemical Safety and Hazard Investigation Board found had eroded to 'about half the thickness of a credit card'.
• Operational risks may increase as refinery finances dwindle; in the case of PES, a $130 million maintenance turnaround project was abandoned just one week before its scheduled start in January 2019 due to financial concerns.
• The refinery failed to comply with regulatory requirements for public participation regarding the characterization and remediation of legacy soil and water contamination, and regulators negotiated solutions largely outside of public view.
• City leadership in Philadelphia failed to plan for the refinery's eventual closure, meaning the fate of the 1,300+ acre site was ultimately decided by a bankruptcy-court auction with minimal community or city input.
• Environmental and community organizations in Philadelphia lacked the discretionary funding and technical resources needed to fully respond to the refinery's complex financial and regulatory failures.
• Refinery management may use the political capital of unions to secure subsidies while withholding information about the facility's poor economic outlook, which can hinder unions from advocating for worker transition assistance.

APA

Simeone, C. E. (2023). An Unrefined Ending. Union of Concerned Scientists. https://www.ucs.org/sites/default/files/2023-03/unrefined-ending-pa-energy-solutions-refinery.pdf

Chicago

Simeone, Christina E. An Unrefined Ending. Union of Concerned Scientists, 2023. https://www.ucs.org/sites/default/files/2023-03/unrefined-ending-pa-energy-solutions-refinery.pdf.

Wikipedia

{{cite report |last1=Simeone |first1=Christina E. |title=An Unrefined Ending |publisher=Union of Concerned Scientists |date=March 2023 |url=https://www.ucs.org/sites/default/files/2023-03/unrefined-ending-pa-energy-solutions-refinery.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{simeone2023unrefined, author = {Simeone, Christina E.}, title = {{An Unrefined Ending}}, institution = {Union of Concerned Scientists}, year = {2023}, month = mar, url = {https://www.ucs.org/sites/default/files/2023-03/unrefined-ending-pa-energy-solutions-refinery.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }