Phillips 66: Ponca City Refinery
by Hugh Pickens, Ponca City Oklahoma
The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.
Major Sections of this report on Phillips 66 include:
Master Index of Articles about Phillips 66
by Hugh Pickens, Ponca City Oklahoma
The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.
Major Sections of this report on Phillips 66 include:
Introduction and Purpose
The purpose of this report is to provide a comprehensive overview of the Ponca City refinery and Ponca City's century old history as an oil refining center. The report is divided into five major sections that cover the refinery's history since its inception down to the present and discusses issues facing the refinery today under the tenure of Phillips 66:
- Ponca City and its Century-Old Oil Refining History
- Ponca City and the "Merger of Equals" with Phillips in 2001
- Ponca City and the Spinoff of Phillips 66 in 2012
- Latest News from the Ponca City Refinery
- How Much Money Does the Ponca City Refinery Earn for Phillips 66?
Ponca City and its Century-Old Oil Refining History
1911: Marland finds Oil near Ponca City
Over the past 100 years, Ponca City's history has been shaped for the most part by the ebb and flow of the petroleum industry. EW Marland decided to come to Ponca City after his wife's cousin, stationed at Fort Sill, introduced him to the Miller brothers whose famous 101 Ranch lay near Ponca City, Oklahoma. In 1908 E. W. journeyed to Ponca City and immediately decided that the surface geology indicated oil. Marland raised capital from financiers back in Pennsylvania and began drilling. Marland originally founded the 101 Ranch Oil Company, located on the Miller Brothers 101 Ranch, and after drilling seven dry holes, drilled his first successful oil well, called Willie Cries, in 1911 on land which he leased from the Ponca Tribe.[1][2]
E. W. Marland's life ran to legendary proportions. The Pennsylvania native won and lost an oil fortune in West Virginia, a much larger one in Oklahoma, was a high-stakes gambler, lived lavishly, spent great amounts on his community and his workers, was a businessman with a strong social conscience, an enthusiastic conservationist and gardener. He had boom-and-bust times in politics as well as oil. After losing his independent Marland Oil Co. to financial sharks led by the younger J.P. Morgan, Marland a Democratic convert and ardent New Dealer won a term in Congress and one as Oklahoma's governor. Two bids for the U.S. Senate were unsuccessful. After his first wife died in 1926, he created controversy by having the legal status of their adopted daughter, Lydie, changed so he could marry her. He drilled for and found oil from the Appalachians to California, over much of the West and into Mexico. He pioneered in drilling the rich Three Sands and Burbank fields of Oklahoma this by a man trained as a lawyer, an early-day coal prospector self-taught in geology.[3]
E. W. Marland loved playing poker. A first rate player, Marland learned poker as a fraternity member at the Sigma Chi fraternity house at the Univeristy of Michigan in 1891. He loved gambling intensely and was a fair loser and a modest winner. At Ann Arbor he never gave the impression of excitability while playing and was alart though silent. John Joseph Mathews recounts in his book "Life and Death of an Oilman: The Career of E.W. Marland" that one time a sharpshooter from another part of town came to the Sigma Chi house to play. Very soon he had chips piled before him on the table. Then suddenly he stood up, beamed on the others and said, "I guess I'll check out." As he raked in the money from the banker in exchange for his chips, he said with a smug smile, "the fact is, boys, I need the money." Marland showed shocked surprise on his usually unreadable face. The expression of incredulity impressed the others when the sharpshooter had gone with all the money, they bantered Marland. At each game thereafter someone at some time usually after winning a large pot would say, "The fact is, boys, I need the money."[4]
After Marland struck oil in Ponca City and had begun to build his oil empire, many a night E. W. and his lieutenants and friends would sit until daybreak playing poker. There were hundreds of private poker parties during a year. Sometimes there were lavish affairs at the Arcade Hotel, or at some private home. Marland continued to love playing poker and played with deep concentration, except that now he could afford to lose of to win as much as seventy-five thousand dollars.[5]
1917: Marland Oil Founded
Marland Oil Company was founded in 1917, when Marland assembled his various holdings including the 101 Ranch Oil Company into one unit, forming Marland Oil Company. Later, on January 3, 1921 Marland incorporated the Marland Oil Company in Delaware to acquire through an exchange of stock control of the Marland Refining Corp. and Kay County Gas Co. By 1920 it is estimated that Marland and his partners controlled 10% of the worlds oil production (the equivalent of Saudi Arabia in 2006) and that Marland was worth $85 million (over $1.0 Billion in 2015 dollars).[6]
From the outset Marland realized that to sustain long-range corporate growth he must form an integrated company encompassing drilling and production, storage and transportation, and refining, and retailing, similar to the very successful model used by the Standard Oil Company. The first step in this process was to dissolve the 101 Ranch Oil Company and replace it with the Marland Refining Company. Over the next several years Marland expanded his empire to include production in neighboring states, and by 1919 he had even started large-scale drilling operations in Mexico. The next step in bringing the feverish rate of growth under a more centralized and integrated operation came in early 1921 when Marland consolidated all of his oil operations under the auspices of the Marland Oil Company. Headquartered in Ponca City, where its major refining facility was located, the firm continued its phenomenal growth pattern by absorbing numerous small oil companies such as Comar Oil Company, Tom Jones Oil Company, Kenney-Cleary Oil Company, Francoma Oil Company, John S. Alcorn Oil Company, and many others whose highly competent executives Marland's company usually retained. Additionally, the company opened its first retail gasoline "filling station" in Pawhuska, Oklahoma, in 1920, and that aspect of the business began to experience rapid growth. Marland took a strong, paternal interest in his company and in his employees and provided numerous benefits not normally offered in that era. He furnished company housing at a nominal fee, provided free insurance to all employees, paid wages above the norm for the time, and is generally acknowledged to have provided the best employee benefits and working conditions in the state. Additionally, his donations to local charities and civic projects were enormous, and he sponsored legendary entertainment spectacles for both employees and the general public.[7]
1918: Marland Refinery Constructed
In 1918 Marland began construction of the Marland Refinery and the population of Ponca City doubled then trebled in a few months.[8] According to an article appearing in Petroleum Age in 1922, the refinery in Ponca City was already one of the largest refineries in the world by 1920:
Located in the heart of the Mid-Continent oil field, the greatest known light oil field in the world, by 1920 the company controlled, with its subsidiaries, over 200,000 acres of proven and valuable oil land within a radius of 100 miles from Ponca City, the headquarters of the company. A study of the map of Marland properties in Northern Oklahoma proves easily the strong strategic position the company holds through its oil resources and large reserves in some of the best pools of this district. Marland oil opened in 1920 the famous Hickman, or now better known as Burbank pool, in the Western Osage; in 1921 the Tonkawa pool in Noble County, within fifteen miles of Ponca City, which promises to produce large quantities of high-gravity crude. It controls almost entirely the Ponca field, one of the oldest and best producing fields in the Mid-Continent, with five producing sands; holds large parcels of oil and gas lands in the Eastern and Western Osage fields, in the Garber, Noble, Newkirk, Deer-Creek and in the Pawnee Payne district. Marland draws its crude from eighteen producing fields with 244 wells and produces, with its affiliated companies, the Comar and Alcorn Oil Companies, over 12.000 barrels per day, sufficient crude for its own refinery demand. Pipe lines extending 271 miles, with thirteen modern equipped pumping stations, radiate in three directions from Ponca City and connect Marland's two refineries with oil fields which have ample unmined production to supply sufficient crude oil for many years to come. The company operates in Ponca City a 10,000-barrel complete refinery, and at Covington a 1,000-barrel skimming plant producing a well-known brand of high grade gasoline and lubricating oils. Nearly two million barrels of steel storage for crude and finished products give the company a strong position in the market, and enabled Marland to begin the storage of gasoline when the refinery price was as low as 12-1/2 cents. The recent raise, totaling so far 3 cents per gallon has greatly increased the value of the 250,000 to 300,000 barrels gasoline the company keeps i» storage against the coming summer demand.[9]
"E. W. Marland's dreams were about to come true when I arrived in Ponca City. That was in 1919 and there were no buildings south of Grand Avenue on the east side of the railroad tracks," says Charles D. Hull, later to become Refinery Manager in 1952 and mayor of Ponca City. "Only a wheatfield occupied the area. Mr. Marland already had the nucleus of a refinery operating where today's Ponca City refinery stands, but it was a mere shadow of the present-day facility. Evidence of the many Marland philanthropies was already beginning to show up throughout the City.[10]
W. H. Shorty Rogers, a refinery supervisor, arrived in Ponca City just after World War I and was sent by the Henry Volk Machine Company to assemble the wax plant for Marland Refining Company. "One day I was offered a position with Marland at the then-fabulous salary of $175 a month and moving expenses from Louisville. The offer came in December, 1919 and was the most unique Christmas present I ever received. We moved to Ponca City the following month. Marland and McFadden would make daily inspections of the refinery. One of the first units in operation were the shell stills, and one one particular day following a flash fire, Mr. Marland showed up on horseback with a lighted cigar in his mouth. I stopped him and asked him if he didn't think the cigar was a safety hazard in the refinery. With a startled look on his face, he grabbed the cigar and slammed it into the ground, then thanked me for reminding him of it.[11]
By 1922 nearly 600 Marland stations were found in 11 mid-continent states, from North Dakota to Oklahoma and as far east as Indiana. Growth required capital, however, and Marland was continually strapped. Turning to investment banker J.P. Morgan and Company, Marland was able to secure financial backing for continued expansion, but with expansion came a hefty price. By 1928 Marland had been forced out by Morgan interests who placed former Texaco executive Dan Moran in charge. With orders from Morgan and Company to put Marland Oil back in the black, Moran set out to acquire key assets that would round out the Marland operation, allowing for increased financial stability. With this in mind, Marland management began to look around for a partner, a company with complementary assets, an operation that would perhaps consider a merger.[12]
Marland's exploitation of oil reserves generated growth and wealth that were previously unimaginable on the Oklahoma prairie, and his company virtually built the city from the ground up. Mansions—including the Marland Mansion and Grand Home—were built by Marland and his associates. The "Roaring 20s" came to an end for Ponca City shortly before the Great Depression. After the takeover bid by J.P. Morgan Jr., son of financier J.P. Morgan, Marland Oil Co. merged with Continental Oil Co. (Conoco) in the late 1920s.[13] It was known as Conoco for more than 70 years. The company maintained its headquarters in Ponca City until the 1950s and continued to grow into a global corporation.[14] Marland was later elected the governor of Oklahoma and as a U.S. congressman.
1928: Marland Loses Control of His Company
While in New York City in 1923 Marland received a phone call that would change his life and lead to the downfall of the oil empire he had created. J. P. Morgan, the financier and banker, wanted to talk to Marland. "I had a very pleasant meeting with Mr. Morgan and his associates," Marland later wrote. They asked me if they could be of any help to me by establishing a line of credit for me in their bank amd suggested they could close my lines of credit in Chicago, St. Louis, and Kansas City. This suggestion, besides being very flattering, was very agreeable to me." Marland needed $12 million to expand the Ponca City Refinery and get into the producing business in Texas, California, and New Mexico. Rather than borrow such a large amount, Marland agreed to let Morgan buy $12 million of stock in Marland Oil in return for representation on Marland Oil's board of directors. At first allowing Morgan to name three members to the company's other twelve board members seemed like a prudent move. Marland used the money to expand pipeline facilities, enlarge his fleet of tank cars to 3,100, and build 500 service stations. "He was walking the earth like a king in the company of bankers and brokers, wearing his crown with the ease of hereditary royalty, and viewing the nation's prosperity with personal pride," writes Ruth Sheldon Knowles.[15][16][17]
John Joseph Matthews recounts the story of Marland's fall in his book Life and Death of an Oilman.
One day in the autumn of 1923, E. W. received a telephone call in his hotel room in New York City. Mr. Charles Sabin of the Guaranty Trust Company of New York was on the telephone. He wondered if Mr. Marland would be coming downtown that day. E. W. assured him that he had business downtown that day. Why? Mr. Sabin said that he would like to have Mr. Marland stop in at his office and see him if Mr. Marland found it convenient to do so. E. W. called at the office of Mr. Sabin, who said that he had been talking with Mr. Morgan of Morgan and Company just the day before, and that Mr. Morgan had expressed a desire to meet Mr. Marland—as a matter of fact he had asked if he, Sabin, could arrange the meeting. Mr. Morgan had expressed a desire, said Mr. Sabin, to talk over the general situation of the oil business with Mr. Marland, adding that Mr. Morgan had told him that he was especially interested in talking over the business with Mr. Marland because he understood through a mutual friend, Mr. A. C. Bedford, chairman of the Board of Directors of the Standard Oil Company, that Mr. Marland was really well in-formed about the conditions in the Mid-Continent oil field.
Then he asked E. W. if he might arrange a meeting with Mr. Morgan. E. W. replied that he would be very glad to meet Mr. Morgan at any time. Thereupon Mr. Sabin telephoned to Mr. Morgan, then took E. W. over to the Morgan and Company offices, where he was introduced to the son of one of the great little gods of his boyhood and youth. Mr. Morgan and his partners gathered around Mr. Marland. They later had lunch together in the bank, and as they lunched there was the usual friendly chat and a show of great interest in this famed Oklahoman who had honored them. They told E. W. that they had taken very little interest in the oil business, but the business was of such great importance to the country that they felt they must take a more active interest in it and learn something about it; that their sole financial concern with oil up to that time had been as bankers and underwriters of an issue of the Standard Oil Company of New Jersey; that they had no affiliation with any oil company; that they had expressed a desire to Mr. A. C. Bedford to inform themselves about the oil business and that Mr. Bedford had recommended Mr. Marland as a man of high character—"one who was a student of the business and who had developed a very important unit in the industry. Mr. Morgan sat forward in his chair. He wondered if his firm could not possibly be of some help to Mr. Marland by establishing a line of credit for him in their bank and in the Guaranty Trust Company of New York to, one might suggest, take care of his current needs. Why not let them, the Morgans,
It would be more convenient for him. He wouldn't be compelled to worry about visiting the banks in Chicago, St. Louis, and Kansas City to keep his lines of credit open. In other words, the Morgan partners implied that it was all very well to have regional loyalty, but a man splashing a big canvas with vivid colors and bold lines shouldn't be disturbed with details like borrowing accounts of five million dollars scattered over the Middle West and Southwest, which he personally had to visit periodically in order to keep open. The offices where he sat were really the ganglion of the financial world, especially since the war of 1914-18. London might be dying hard, but facts were facts. He felt that he was a part of the affairs of the world as he sat there. Certainly the masters of the world were around him, seeking, deferring, pushing the cigarette ash tray closer to him so that he would not have to reach, giving over-the-shoulder nods and curt orders so that they could give complete attention to Mr. Marland, who was telling them the fascinating story of oil in the Mid-Continent field. He talked and the international bankers listened. And as he talked he saw himself as a world power, too. The arrangements were made whereby Morgan and Company would become the bankers of the Marland Oil Company of Ponca City, Oklahoma. Then the Morgan partners seemed to read his thoughts and suggested that he would certainly want to expand. E. W. said that he had, as a matter of fact, been very anxious to get into the producing business in Texas, California, and New Mexico, and to make further extensions of the refinery at Ponca City. He said that he would like to have five million dollars to invest (open up new fields) in California, five million dollars to invest in Texas, and two million dollars to make extensions to the refinery in Ponca City and to start in New Mexico. But, he said, he would not really feel safe in borrowing such a large amount for permanent investment, because it might take him two or three years to realize on such an investment.
They would learn, through E. W., about production, refining, and the working in general of an oil company. In exchange for this tutoring in oil, they could certainly be of use to E. W. with their advice on financial matters. The Morgan members of the board of directors of E. W.'s company pointed efficient fingers at an obviously inconvenient by-product of the Morgan-Mar-land arrangement. Why should all the fifteen Marland members be compelled to leave their work and make expensive trips to New York for meetings? Why not form an executive commit-tee, which would have the powers of the board of directors, and they could meet in New York. Then only E. W. himself and two others to be appointed to the executive committee from the Marland Company need come to New York. An executive committee was elected consisting of the three Morgan representatives and W. H. McFadden, Vernon F. Taylor, and E. W., of the original Marland board members and stockholders. From this time on Morgan and Company dominated from New York City the Marland Oil Company of the Cherokee Outlet of Oklahoma. "The influence of Morgan and Company upon my executive committee was, of course, dominant," said E. W. "The other members of the board of directors, men who had grown up with me in the oil business and who had theretofore been active in formulating and directing the policies of the company with me, attended directors' meetings thereafter only when necessary, and they voted 'aye' to every suggestion of the executive committee. In this manner the Morgan influence became supreme—and the builders of the company lost control of policy direction."[18]
On May 14, 1924 E. W. Marland reported at the annual meeting of stockholders in Wilmington, Delaware that the company had eaned $2.09 per share on 1,382,987 outstanding shares in the company.[19] On August 1, 1925 J. P. Morgan officially notified E. W. Marland that he was exercising an option to purchase an additional 150,000 shares of Marland common stock at $40 per share. This brought the Morgan total to 635,000 shares of stock for an aggregate price of $22,400,000.[20]
By the end of 1926, Marland Oil's books showed current liabilities of over $8 million, an increase of $5 million from 1925. Marland gradually lost control of his company. One of the first decisions of the new board of directors was to form an executive committee that would meet in New York City with three Morgan members and three Marland members. "Every plan of major importance I suggested for the development of the company was vetoed, wrote Marland. "[Morgan] said I took too much 'human' interest in my employees and that Morgan and Company felt that I need under me a President of the Company...who would be hard-boiled and two-fisted." After Marland Oil recorded losses in 1926 and 1927, the executive committee met and decided in 1928 that Marland relinquish the president's title. Marland had no choice but to agree. The committee asked Marland to help find a new president but Morgan had already secretly chosen Marland's replacement - Dan Moran.[21][22][23]
Ruth Sheldon Knowles wrote about Marland's final expulsion from the company he founded in The Greatest Gamblers: The Epic of American Oil Exploration:
When his company showed another loss in 1928, Marland realized the situation was serious, but had no doubt as to his ability to weather whatever financial storm might be brewing. The price of oil fell from $2 a barrel to $1. The West Texas and Greater Seminole fields flowed more oil than refineries could handle. Storage of crude and products reached alarming proportions. Everyone in the industry sensed trouble. The overproduction situation would become worse at the end of the year when the great Oklahoma City field was discovered. When Marland met with his executive committee in New York in May, 1928, he was shocked to find that the bankers had turned against him. They told him the company needed a firmer hand, a president who would not be influenced by his friendship for the men who had helped him build the company. They offered him the board chairmanship. When Marland dazedly made recommendations for the presidency, he learned the bankers had already selected a Texas Com-pany vice-president, Dan Moran, a hard-boiled operating executive who was the antithesis of the generous, grandeur-minded, polo-playing dreamer and prospector. The bankers made it clear that the offer of the board chairmanship with salary was a pension. Marland would not be permitted any voice in the company affairs. Furthermore, he was told he could not live in Ponca City as his presence there would interfere with Dan Moran's reorganization. Marland angrily resigned, asking his officers and old friends, who wished to resign also, to stay. It was a futile expression of love for what he had built. Dan Moran fired them all anyway.[24]
On September 28, 1928 the NY Times reported that reports were circulating in the financial district that E. W. Marland would retire within a few weeks. It was said that he no longer desired an active role in his corporation and that it was expected that J. P. Morgan and Co would increase their representation. Three men were mentioned to succeed Marland: Colonel Franklyn R. Kenny and C. C. Brown, Vice Presidents at Marland Oil, and F. V. Taylor from outside the company.[25] On October 30, 1928 the NY Times reported that Marland had resigned as President of Marland Oil effective November 1, 1928 but that he would remain a director and member of the Executive committee. At the same time Marland Oil announced that Daniel J. Moran, Vice-President and director of the Texas Corporation had been elected President of Marland Oil.[26]
According to W. H. "Shorty" Rogers who later became a refinery supervisor, employee reaction to the Conoco-Marland merger was generally philosophical. "Most felt it meant more job security since we would be working for a bigger company. The program of reorganization went from the top down and most employees felt it was good."[27] However, J. P. "Jack" Barrett, who went to work for Marland in 1917 and later became supervisor of bulk plant auditor says that when the Conoco-Marland merger occurred a general feeling of unrest swept through the work force and many employees were terminated. "We simply lived from day to day, doing our best and hoping we would not be among those cut loose. Those of us who survived the merger with our jobs intact became a close knit group and cooperation was splendid. We worked six days a week and on Sunday, our day off, we frequently got together for any excursion to the 101 Ranch to see Tony, the trained bear, the ostriches, and other exotic animals.[28]
1928 - 1947: The Dan Moran Years- "You need a tough man to survive hard times."
Dan Moran, Bulldog Manager
E. W. Marland's successor as President of Marland Oil was Dan Moran. Known as a bulldog manager, Moran had an explosive temper. "Moran liked to brandish the machete lopping off people's jobs whenever he felt like it," says Keely Marshall. "Back in the 1940s, I was loading scrap iron into a gondola car with another kid. It was August and the temperature was well over 100 degrees. My partner told me his safety boots were killing him and he sat in the shad to pull them off. At precisely that moment, who but Mr. Moran pulls up in his car. 'Nobody sits down on company time,' he says. The kid was fired on the spot."[29]
L. W. Vickery, later to become Manager of the Engineering Center, arrived in Ponca City in 1929 and still remembers the Dan Moran period in Conoco history. "I was personally involved in his nocturnal visits to the refinery and many stories are still told of incidents that occurred during those visits. Most of them are true, too. Moran wanted everything done RIGHT NOW! He was ruthless and demanding, but in the words of an executive under him, 'he got more done in the wrong way than any man I ever knew.' In the 1930's, he stressed the need for research and engineering and got them. Look at us now."[30]
Cecil Hewitt went to work in the transportation department at Conoco in 1930 after previously working for Marland Oil at its Walters, Oklahoma bulk plant. "My second year in the Garage, Mr. Moran decided the annual inspection tour staff would camp out, so I was chosen to go along to pitch tents and make camp," says Hewitt. "Mr. Moran ran the tour with the precision of a railroad timetable. A minute late for departure and you were left behind. How you caught up was your business. Knowing the man personally, I can say with all candor that I never met a nicer or fairer person anywhere. He never accepted excuses for inefficiency, but the employee who did his job properly received Moran's praise and support."[31]
J. P. "Jack Barrett" said he first met Dan Moran while waiting on the elevator in the Main Office Building. "After introducing myself to him, I asked how his brother Bill, was. Surprised, he asked me how I came to know Bill. I told him that he was in my outfit in World War I. This was to put me in good stead with Mr. Moran for the rest of his time with Conoco. Although we were never close friends, he was always civil to me."[32]
Moran Purges the Company of Marland's Influence
Moran's first management decision after taking over was to purge the company of the Marland influence, discharging most of Marland's operating executives, superintendents and managers who had grown up with the company alongside E. W. Marland. "The pink slips just kept coming," says Keeley Marshall. Marland himself fared no better. In May 1928 when J. P. Morgan took over Marland Oil, they requested that E. W. Marland relinquish the job of President to become the Chairman of the Board. The Chairman's job was "ornamental, at best. "The bankers made it clear Marland would not be permitted any voice in company affairs," wrote Ruth Sheldon Knowle. Later it got worse when J. P. Morgan's executive committee told Marland that Dan Moran couldn't run the company efficiently while Marland remained in Ponca City. Marland resigned from the company he had founded. Marland later became a successful politician, elected to the House of Representatibves in 1932 and Governor of Oklahoma in 1934.[33][34]
Moran Merges Marland Oil with Continental Creating Conoco
But behind the personal failings of Moran is the story of a man who reshaped and guided Conoco through the great depression and World War II. "When Moran took the wheel in 1928, the company was bleeding red ink, facing debt of $6.5 million ($90 million in 2015 dollars)," writes Russ Banham. "Prospects in the oil industry were poor, given the twin evils of overproduction and soft prices. Moran made it clear that the only way the company could survive was through iron-fisted control of every penny spent." Moran fired workers, gutted their salaries, and abandoned oil-producing property he felt was marginally profitable. "I assure you the decisions which have been executed were impelled by stern necessity," said Moran. "While necessarily painful to some, [they have] had the most salutary effect upon the organization."[35]
According to Banham, Moran set his sites on expanding Marland Oil's modest refinery capacity and marketing depth. Three months after taking over Marland Oil, on April 30, 1929, Moran merged Marland Oil with Continental Oil. "Continental needed a steady, inexpensive supply of crude oil, which Marland had aplenty. Meanwhile, Marland needed more marketing outlets for its refined products - Continental's strength." Rumor has it that the merger also satisfied the personal interest of J. P. Morgan. "J. P. Morgan wanted the merger simply because he was looking for any way to do away with the Marland name," says John Morrow, who retired as Conoco's group senior vice president of finance in the 1980s.[36]
Conoco Inc. was an American oil company founded in 1875 as the Continental Oil and Transportation Company. Based in Ogden, Utah, the company was a coal, oil, kerosene, grease and candles distributor in the West. Marland Oil Company (founded by exploration pioneer E. W. Marland) later acquired the assets (subject to liabilities) of Continental Oil Company, for a consideration of 2,317,266 shares of stock. On June 26, 1929, Marland Oil changed its name to Continental Oil Company and moved its headquarters to Ponca City, Oklahoma. The acquisition gave Conoco the red bar-and-triangle logo previously used by Marland. Conoco used the logo between 1930 and 1970, when the current red capsule logo was adopted. Ponca City remained the world headquarters of Conoco until the 1950s when the headquarters moved to Houston.
The merger worked. By 1937, Moran had eliminated the company's $43 million debt. To celebrate the company's propsperity during the great depression, Moran distributed 5,000 Christmas bonus checks to employees worth $770,000, one of the largest bonuses bestowed by a US company that year. "What Moran sought to build was not a great national company, but a tightly knit regional company, on the fringe of greatness playing its own special game," wrote Fortune Magazine in 1961. " And in this he succeeded admirably, [despite] is tyrannical one-man show." According to Banham, although Moran's legacy is forever wedded to his explosive temper and gruff demeanor, his extreme ways did successfully navigate the shoals of the great depression and kept the company alive. As one Conocoan recalled "You need a tough man to survive hard times."[37][38]
1947 1967: New President Leonard McCollum Transforms Conoco, Moves Company HQ From Ponca City to Houston
Leonard McCollum became President of Conoco in 1947 and led the company into innovative fields of foreign exploration, natural gas processing, fertilizers, detergents and plastics. When McCollum -- known as Mr. Mc -- came to Conoco in 1947, he found a medium-sized oil company operating mainly in the Middle West and the Rocky Mountain states. It was known for its conservatism and had assets of $209 million and a net income of $31 million. Twenty-one years later, in 1968, he was chairman and Conoco's assets stood at $2.3 billion, net income was $203 million and its payroll totaled 32,000. He retired as chairman in 1972. "He had dynamic ideas in business and was a pioneer in many areas," recalled his wife Eleanor. "He once bought a coal company for Conoco. They said he was crazy. It became their most lucrative investment."
Daniel Yergin wrote in The Prize: The Epic Quest for Oil, Money & Power about McCollum's transformation of Conoco from a regional oil company to a multinational energy conglomerate:
In 1947, [Conoco's] board brought in a new president. Leonard McCollum, who had been Standard Oil of New Jersey's worldwide production coordinator. McCollum wanted to focus on building up the company's North American production. But he soon found that Continental was at a competitive disadvantage. Lower-cost foreign oil was pouring into the United States in the late 1940s, winning the incremental demand, while Continental's domestic production was being restricted by prorationing in Texas, Oklahoma, and else-where. Continental, McCollum decided, would have to go overseas.
The company spent a good deal of money drilling dry holes in Egypt and elsewhere in Africa over the next decade. Yet, despite the headaches and disappointments, McCollum was convinced that it was better, when it came to crude oil, to be a "have" than to be a "have-not" company. "If you set out to be a 'have.' "he said. "you must have the audacity to acquire as much acreage as possible—to take a big bite. Though a small piece may look like a sure thing, you better take as much as you can so you don't miss:' In the mid-1950s, Continental took a considerable bite in Libya, in a partnership with Marathon and Amerada that was called the Oasis Group. At the end of the 1950s, Oasis began to strike it very big in Libya. But, just at that moment. the rules were being drastically changed in Washington, completely undercutting McCollum's original strategic rationale. The new import quotas pretty much precluded Continental at the time from bringing its cheaper Libyan oil into the U.S. market, as it had planned. That meant the oil had to go elsewhere, and "elsewhere," of course, meant Western Europe. the most competitive oil market in the world. At first, Continental sold its surging Libyan output to the established majors and independent refiners in Europe. "We were brand new, and we had to go out and beat the bushes." recalled one Continental executive. But the company had little flexibility, and it also had to offer considerable price concessions to its buyers. Thus, it faced the classic dilemma—dependence on others.
At the turn of the twentieth century. William Mellon had turned Gulf into an integrated company, with its own refining and distribution, so that he would not have to say "by your leave" to Standard Oil or anyone else. Now, sixty years later. McCollum would do the same. So. in three years, beginning in 1960, the company established its own downstream refining and distribution system in Western Europe and Britain. acquiring where it could, starting from scratch where it could not. Its higher-quality Libyan oil, which was particularly suited to making gasoline, pushed Continental to develop its own networks of gasoline stations. In addition, Continental negotiated long-term contracts with strategically placed independent refiners. It built a very efficient refinery in Britain, where it sold low-cost gasoline under the "Jet" name. By 1964, sixteen years after McCollum had initiated the foreign oil search, Continental was producing more overseas than in the United States. It had become a significant integrated international oil company, which had never been in McCollum's original plan. The multiplication of such companies, each organized as more-or-less autonomous chains, increased the competitive pressures in the marketplace and gave further push to the falling oil price. Their success would also stir up nationalist sentiment in the countries that supplied their oil. In short, the companies were most vulnerable at the extreme ends of the production chain, the wellhead and the pump.'[39]
Between 1947, when he first entered the boardroom of Conoco, and 1967, when he retired as CEO, McCollum constantly strove for improvement in his company and the oil industry. McCollum established new divisions of research and development, market research, and a planning and coordinating department. He possessed an extraordinary ability to delegate authority, inspire others and to see success where others saw failure. According to his wife, "He was a visionary who understood the oil industry."[40][41]
"The hottest brand going" became Conoco's gasoline trademark during McCollum's twenty year tenure. McCollum was a "go-getter" who joked about his fast pace: "I kept four company planes at my disposal to go north, south, east, and west. I couldn't waste time turning around."[42]
In 1949, McCollum, moved Conoco's headquarters from Ponca City to Houston - the center of the US petroleum industry. New offices were opened at the Sterling Building on Texas and Fannin Streets.[43] Although Ponca City lost its role as headquarters, Ponca City was the beneficiary of McCollum's decision to build Conoco's central research center 1952 and double the R&D center in size by 1962.[44]
Leonard McCollum (1902-1993) gained a reputation as a skilled oil industry leader during his early career with Standard Oil. He joined Continental Oil when it was a medium-sized company with $209 million in assets. When he retired as chairman, the company, renamed Conoco, was a multinational energy conglomerate with assets of $2.3 billion.
1950 to 1980: High Water Mark for Conoco in Ponca City
Many consider the 1950s and 1960s as the high water mark for Conoco in Ponca City. "Your new job puts you right in the middle of Conoco's worldwide diversified operations," read a Conoco employee handbook published in 1967. "More Conocoans - 3,300 of the oil company's employees -work here than in any other single location. Ponca City is the 'Service Center of the Conoco World.' This is the center for our research, engineering, accounting, computer, pipe line, purchasing, and transportation activities. The oil industry is perhaps the most stable in the country. And the many companies of the Conoco family are right at the top of the industry."[45]
"Since 1950, Conoco's growth has been notably dynamic, moving from a position as a domestic regional company to the full rank of major international," continues the handbook. "Almost 'overnight,' Conoco established a fully integrated petroleum operation in Africa and Europe. Conoco is a now company. Enjoying the best overall growth rate among the world's largest oil firms, Conoco is a billion-dollar corporation and interational in scope and operations. Its diversification activities include plastics, coal, plant foods, petrochemical, electronics, nuclear research, and cryogenics applied to worldwide transport of natural gas in liquid form."[46]
"Conoco spends about $10 million annually on research and engineering through the efforts of more than 500 scientists and technicians at the company's multimillion dollar research center at Ponca City."[47]
1966: Cities Service Sells Refinery to Sequoia
Cities Service Sells Units to Gulf Oil
1978: North Tower Completed
The Ponocoan reported on August 8, 1980 that a new ten story office building would be build at the Conoco Complex. "the need for this structure reflects our historic growth and existing office space demands," said Warren L. Jensen, vice President and regional coordinator, Midwest area. "It also reaffirms Conoco's commitment to Ponca City. The new South Tower was designed to house 1,000 employees with construction slated to be completed late in 1982. The South Tower was designed to be almost identical in size and design to the existing North Tower, completed in January, 1978. The main difference is that the South Tower has two additional floors, the addition of more elevators, and a central stairway. A one story office area connects the North and South Towers. Architects for the project were Frankfurt, Short, and Bruza of Oklahoma City.[48]
1978: Construction Begins on Research West
The Ponocoan reported on January 30, 1978 that construction had begun on the $13 million addition to Conoco's Research and Development Department with a 230,000 square foot building that will house 310 people. Research West would take approximately two years to complete and would house the Exploration Research Division and portions of Chemicals Research and Petroleum Products Divisions.[49]
1981: Dupont Acquires Conoco
In 1981, in what was called the largest acquisition in US history at that time, Conoco was purchased by DuPont Company, headquartered in Wilmington Deleware, over the July 4 weekend for $9.7 billion. At the time of the acquisition, DuPont announced that $2 billion in Conoco assets would be sold to reduce Conoco's debt. Dupont began by selling a west coast refinery for $100 million and a group of domestic properties were sold to Petro-Lewis for $750 million. [50]
WallStreet was sceptical of the acquisition as the NY Times reported that:
"Nobody on earth could figure out why Du Pont wanted them," said Thom R. Brown, an analyst at Butcher & Singer in Philadelphia. Shenandoah seemed to offer few resources, limited expertise, and scant protection from the profit-squeezing impact of the rising cost of the petrochemicals that Du Pont uses to make most of its products. Yesterday Du Pont, the nation's largest chemical company, announced that it planned to acquire Conoco Inc., the nation's ninth-largest oil company and second-largest coal miner. Once again, the analysts are surprised, but this time the relevance of the acquisition to Du Pont's feedstock concerns has nothing to do with it.
The problem, analysts said, is that Conoco is so large that they are groping to figure out how its acquisition would fit into Du Pont's overall strategic plans. A Du Pont spokesman said yesterday that the company could not comment on questions about its strategy pending filing of legal papers related to the acquisition offer. "As a result of this acquisition, Du Pont can forget about its image as a specialized company diversifying downstream into high technology," said John Henry, an analyst at E.F. Hutton. "It will become just a big commodities giant."
"I am a little concerned that it will divert management attention from the direction it should be going," Mr. Miles said. If the Conoco acquisition threatens to dwarf some of the expected developments on Du Pont's balance sheet that had attracted analysts, it nonetheless has a great deal of charm. "It is a conservative step," Mr. Henry said, "in that it makes the company bigger, stronger, less cyclical, and slower growing in the next few years. But it has got to be the most dramatic thing the company has ever done."[51]
The acquisition did little to benefit Ponca City. At the time of the acquisition, Conoco was by far Ponca City's biggest employer with 828 employees at the refinery and an additional 3,805 employees working in support services including financial, research, engineering, and service organizations.[52] Thirty years later only the refinery employees remain.
1984: Conoco Modifies Air Cleaner at Ponca City Refinery to Help Produce Liquid Fertilizer
In January, 1984 Conoco completed a $2 million refinery modification that made the air from Ponca City Refinery 30 percent cleaner and brought the city a commercial venture the fertilizer plant operated by Kerley Industries Inc. of Phoenix, Ariz. The changes cut refinery operating costs at the same time. In an innovative approach, Conoco engineers figured a way to capture waste gases previously lost in the atmosphere and put them to use. Old sulfur-recovery equipment was replaced by more efficient units and piping was erected to capture gaseous wastes produced during the refining process. The one-time wastes are piped to the nearby Kerley plant, which removes ammonia and sulfur compounds for use in liquid fertilizer. Conoco said its new equipment reduced sulfur dioxide emissions by 30 percent. It is the first system of its kind in Oklahoma and for Conoco.[53]
1985: Conoco Upgrades Ponca City Refinery
NewsOK reported on July 14, 1985 that Conoco Inc. is upgrading Ponca City Refinery with a new processing unit that is expected to improve production and profits. The equipment includes a hydrotreater reactor and an amine contractor that together adds hydrogen to the crude oil stock flowing to one of two catalytic crackers at the plant. The hydrogen improves quality of the stock, increasing light oil production. "This new equipment will allow us to increase production of higher-value, light oil products, including gasolines and diesel fuels," said refinery manager J.L. Dimond. Besides raising production and quality, the equipment will remove sulfur from the feedstock stream, resulting in cleaner air. The sulfur will be sold to a fertilizer company that opened its doors in Ponca City earlier this year. The newest equipment additions to the 134,000-barrel-per-day refinery will be finished about Oct. 1, Dimond said. This is the third upgrade in three years.[54]
1985: Ponca City Refinery Fights for its Life
News OK reported on July 21, 1985 that the Ponca City Refinery was facing a do-or-die situation. "An in-depth study of Conoco's refining operations by an executive management team has recently determined that the Ponca City refinery is the weakest link in Conoco refining operations," said plant manager John L. Dimond. "Unless the Ponca City refinery meets corporate profit objectives in a relatively short but unspecified time period, the refinery will be closed." That warning was passed along to the refinery's roughly 700 employees recently during meetings led by top Conoco officials including the firm's executive vice president and vice president of North American refinery. "The purpose of the meeting was to tell employees we're in a fight for our life," Dimond said. Since January, the refinery work force has been trimmed by 13 percent or 114 employees as a result of enhanced early retirement offerings to all eligible Conoco personnel systemwide, Dimond said. Overall, Conoco employed at its Ponca City complex more than 4,000 people, about 3,000 of whom work in the firm's major research, development and engineering departments.[55]
Through 1984, the Ponca City refinery "didn't make very much money, not enough to satisfy the corporation (Conoco's parent, Du Pont)," Dimond said. The refinery lost money during a 1985 first quarter that was "terrible," he said. During the second quarter, though, economic conditions were "reasonable," he said. His projections are that financial situation for the third and fourth quarters "will be somewhere in between the first and second." How long Du Pont would be satisfied with only marginal profits or even losses from the Ponca City plant "depends upon the attractiveness of alternate means for the disposition of assets," Dimond said. Also, competition among remaining refiners has become "intense," he said. "This competition is occuring in spite of the fact 111 U.S. refineries have shut down since January 1981 ... Survival is the prize awarded those refineries that are the most efficient."[56]
The keys to the "survival plan" are cost cutting and improved efficiency. Toward that end, Ponca City employees were asked recently for their ideas. The result was 470 suggestions, Dimond said. "Although the exact figures are closely guarded, I am at liberty to state that annual production (operating) costs in Ponca City must be reduced by about $10 million," he said. "I should emphasize that Conoco's management, the Ponca City refinery employees and support staff are committed to surviving this present crisis. Nonetheless, the crisis is very real and any projected increases in operating cost clouds the horizon."[57]
1990: Fire Damages Refinery Unit at Ponca City Refinery
NewsOK reported on May 23, 1990 that a spectacular fire that whipped orange fireballs 100 feet into the air and emitted a massive cloud of black smoke that was visible for miles across Kay County forced partial evacuation of the Conoco refinery complex. The inferno started about 6:15 p.m., after most of the 3,800 employees of the 1,300-acre complex were off duty, Hohensee said. "At this point the situation is stable, the fire is under control," Hohensee said at 7:45 p.m. "All emloyees have been accounted for." Nearby neighborhoods in south Ponca City were not evacuated. Ponca City police officer Bruce Piel said the blaze prompted authorities to evacuate children from a baseball field across the street. One member of the company's 16-man fire brigade was taken to St. Joseph Regional Medical Center and another was treated at the plant clinic after they showed signs of exhaustion, company spokesman Lynn Hohensee said. A hospital spokeswoman said the worker taken there was expected to be released Tuesday night. Retired Ponca City fire chief James R. Bates described the fire as a disaster. "They have flames everywhere," Bates said as he watched from his house two miles from the plant.
Hohensee said the fire was fueled by a propane supply. He said fire brigade workers, using a screen of water, made their way to the propane supply and cut it off. Refinery manager Dennis Parker said the fire was out at 9:35 p.m. Hohensee said the cause of the fire was unknown, and a damage estimate was not immediately available. Parker said damage would probably be in the millions. The fire began in the plant's dewaxing unit, where 12 workers were on duty, Hohensee said. He said the unit "dewaxes motor oil that is made into lubricants and then sold." The unit was built in 1941 and refurbished in 1970, Hohensee said. Officials said they originally thought the fire was contained to the dewaxing unit. But at 7:15 p.m. the fire spread to a nearby filtration building, Hohensee said. That building contains four large rotary filters that help separate wax from motor oil. The last major fire at the refinery was in 1973, Hohensee said. "I have never seen anything like this happen," said one 10-year employee, who did not want to be identified.[58]
1990: Conoco reaches Environmental Settlement with Ponca City
The NY Times reported in on April 5, 1990 that Conoco had reached one of the largest settlements ever recorded at that time in a lawsuit over environmental contamination offering 400 families that are neighbors to the Conoco refinery a package of measures worth from $23 million to $27 million, according to various estimates that will allow them to move away "from the acrid odors that have come to signify sickness and death in many households." Conoco executives said the settlement would permit them to create an uninhabited buffer zone around the plant. "We didn't do this for the money, and people are not going to have a good time spending it," said Anna Sue Rafferty, a leader of Ponca City Toxic Concerned Citizens, a community group that helped organize the suit against Conoco. "This has been my home for 34 years. I raised four children here. I love this house, but all I want to do now is get out of it." In response to years of complaints, Federal and state officials along with Conoco executives repeatedly told the plant's neighbors that no toxic substances were evident and that they faced no health risk. But recent tests performed by Conoco on samples of water found underground showed traces of benzene, a known carcinogen, according to Dennis Parker, the refinery manager. Adrienne Anderson, Western regional director of the National Toxics Campaign, which provided technical assistance to people in the area, said privately commissioned tests on water that had seeped into basements regularly showed dangerous levels of benzene, arsenic and about 20 other potentially harmful chemicals. Conoco, a fully owned subsidiary of E. I. du Pont de Nemours & Company, did not acknowledge any wrongdoing in the settlement. In a statement Monday, Mr. Parker noted that the agreement says, "No party admits any fault, liability or responsibility for any claims, injuries or damages claimed by any adverse party." Grace Klinger, who learned the chemistry of hydrocarbons to find out what was happening in her neighborhood, said: "When I was growing up, everyone just figured the stink was just refinery stink and if the company said it was O.K. then it was O.K. Now we know better, and it doesn't matter what Conoco says because the truth is out."[59][60]
1993: Major Downsizing at Conoco
Ponca City was hit by major downsizing at Conoco in 1993 when approximately 1,400 jobs were cut, resulting in an annual payroll reduction of $40 million. This precipitated an economic slowdown in the city and county in 1993 and 1994. The unemployment rate, which had always been well below the national average of six percent, jumped to 12 percent and unemployment compensation claims more than doubled from the previous year. While Conoco once accounted for 50 percent of the jobs in Ponca City, after the downsizing Conoco accounted for just seven percent, or 1,400 jobs. According to a study by the International Economic Development Council, "the town’s psychology and identity was rocked by the downsizing of its one major employer."[61]
1996: Phillips and Conoco End Merger Talks
On May 14, 1996 Phillips 66 and Conoco confirmed that they had been engaged in exclusive discussions to form such a joint-venture company which would, among other things, "market gasoline and other petroleum products under both the Phillips 66 and Conoco brands." However Bartlesville-based Phillips Petroleum Co. and Conoco Inc., Houston, agreed to end discussion of combining their U.S. refining, marketing, supply and transportation assets into a joint venture. Phillips Chairman and Chief Executive Wayne Allen and Conoco President and Chief Executive Archie Dunham said jointly Tuesday, "Both parties negotiated constructively and in good faith, but we were unable to reach agreement on significant commercial issues."
Allen said, "While we're disappointed that we could not reach an agreement, Phillips remains committed to improving the profitability of its RM&T (refining, marketing and transportation) operations." Dunham said, "Conoco and Phillips are both very successful and strong companies. We approached the negotiations on the basis that we would agree to create a joint venture only if it could be demonstrated that such a move would improve both companies' financial performance and be in the best interests of our shareholders. While it is disappointing that we could not reach agreement, Conoco is well positioned to compete in this market, and remains committed to providing quality products and service to its customers," Dunham added.[62]
1996: Fire at Ponca City Refinery
In July 1996, the plant experienced a fire in a hydro heater, which removes sulfur from the hydrocarbon feed stock for the manufacture of oil and gas products. No one was injured and production was not interrupted. A major fire occurred in May 1990 when a spectacular, propane-fed blaze swept through a dewaxing unit, causing more than $1 million in damage. [63]
1998: DuPont Divests Conoco
In a move that many investors believed was long overdue, E. I. du Pont de Nemours announced in 1989 that it would divest itself of 20 percent of its $22 billion Conoco oil subsidiary in a tax-free stock offering that could bring in as much as $5 billion. Charles O. Holliday Jr., DuPont's chief executive, said he would dispose of the rest of Conoco "as soon as practical." The Conoco divestiture was certainly not unexpected. DuPont bought the oil company in 1981 as insurance against the pricing and supply tactics of the Organization of Petroleum Exporting Countries. But oil prices have been far less volatile than it had feared, and DuPont continues to de-emphasize the petrochemical side of its business, so having Conoco as a captive source of raw material is of less strategic importance.[64]
The decision by DuPont's board struck much of Wall Street as a safe solution to the question of how best to divest itself of Conoco in a depressed oil market. Some investors feared DuPont would sell Conoco at a cheap price just to get rid of it. Others -- especially after British Petroleum PLC's $48 billion acquisition of Amoco Corp. -- hoped for a quick sale that would provide the same clean break but at a rich price.[65] Analysts were not surprised by the announcement that DuPont intends to sell its stake in Conoco. In fact, some wondered what took the company so long. "That's something they've [talked about] for a long time and they're finally acting on that," said Carol Freedenthal of Houston-based Jofree Corp. "I guess they've just got better places they can put their money than the oil and gas business." Edward Jones chemical analyst Bill Fiala said the move seemed imminent about a month ago after restructuring within DuPont did not include Conoco. "I think the writing was on the wall at that point," he said. "I think it's good for Conoco and good for DuPont. I think if Conoco's ever going to thrive, it needs to be a little more independent and a little more agile."[66]
Conoco's acquisition by DuPont cast a big shadow over Ponca City. According to the Daily Oklahoman, "when Conoco turned out to be the winner's prize in last summer's corporate takeover and bidding war involving Du Pont, Mobil Oil and Canada's Seagram, people here watched with more than idle curiosity. In fact, many were downright nervous."
But people's nerves have since calmed down. Delaware-based Du Pont, which emerged victorious in the fight for Conoco, completed its acquisition of that locally born oil company last Oct. 1. Du Pont has since demonstrated that life in Ponca City can go on as before even with Conoco, which most people had generally assumed was too big to be bought out, now reduced to the status of a Du Pont subsidiary. But local residents, many of whom not only get their paycheck from Conoco but were also long-time Conoco stockholders as were thousands of other Oklahomans, still had a lot of unanswered questions about Du Pont.
Many questions were answered last week when Du Pont board chairman Edward G. Jefferson came to town, accepting an invitation to address the annual meeting of the Ponca City Chamber of Commerce. Turning to Conoco, he told people that the Du Pont-Conoco merger, which turned out to be the most expensive in business history at $7.4 billion, offers long-term benefits for those connected with either firm.
While his own company is one of the nation's top research firms, Jefferson said he is impressed with Conoco's major Ponca City research facilities. He added that the combination of one company with a history of expertise in chemicals and chemical research and another with vast energy reserves and energy research should make both firms stronger and lead to development of many new products. He cited particularly the potential in tertiary oil recovery, an area Conoco plans to emphasize more in the future. Such recovery methods often employ the injection of chemicals into the ground, chemicals which Du Pont can provide. Jefferson also noted that the merger widens promotion possibilities for employees of both companies. He assured local residents that major Conoco accounting functions now located in Ponca City will remain there. "I see no basis for wanting to move them."[67]
Major downsizings followed, especially in the early to mid-1990s. Employee numbers in Ponca City fell from a high of 4,500 to a low of 1,800 - huge losses that left the city of 25,000 reeling, economically and psychologically.[68]
1999: Fire at Ponca City Refinery
In October 1999, an oil tank at the state's largest refinery burst into flames, injuring two workers and sending school children scurrying off playgrounds to safety. An estimated 50,000 barrels of fuel were consumed in the fire and damage was estimated at $1.5 million. A plume of thick black smoke rose over the city, scattering charred chunks of foam-like debris up to 5 miles from the Conoco refinery. Kenneth Ray, director of external affairs for Conoco, said the smoke was non-toxic but warned people with respiratory problems to stay indoors. Ray said the fire probably would be left to burn out and posed no danger of spreading. He said he didn't know what caused the 80,000-gallon tank to explode. A spokesman for Intergris Baptist Medical Center in Oklahoma City said both injured workers, who had been on a lift inspecting insulation around the tank, had burns to the face, back and arms, and one had a fractured hip. Their conditions and the extent of their burns wasn't immediately available.[69]
Ponca City and the "Merger of Equals" with Phillips in 2001
Other Stories About the Ponca City Refinery:
- Latest News from the Ponca City Refinery
- Ponca City and its Century-Old Oil Refining History
- Ponca City and the "Merger of Equals" with Phillips in 2001
- Ponca City and the Spinoff of Phillips 66 in 2012
- How Much Money Does the Ponca City Refinery Earn for Phillips 66?
- What Are Phillips' Plans for the North and South Towers?
- News, Issues, and Status at Other Phillips 66 Refineries
2001: The Creation of ConocoPhillips
Conoco Inc. and Phillips Petroleum Co. announced on November 18, 2001 that their boards of directors have unanimously approved a merger of equals and signed a definitive merger agreement. The merged company became the third-largest integrated U.S. energy company based on market capitalization and oil and gas reserves and production. Worldwide, it became the sixth-largest energy company based on hydrocarbon reserves and the fifth-largest global refiner. Upon completion of the merger, Archie W. Dunham, Conoco chairman and chief executive officer, would serve as chairman of ConocoPhillips and delay his scheduled retirement to 2004. James J. Mulva, Phillips chairman and chief executive officer, would become president and chief executive officer of the combined company, and also become chairman upon Dunham's retirement.[70][71]
The Associated Press reported that analysts described the combination as a deal done to survive. If Phillips and Conoco hadn't decided to join forces, analysts said they risked losing market share to competitors in an unhealthy business climate for all but the largest petroleum companies reported Alan Clenndenning. "This is absolutely a matter of survival - survival nor necessarily to thrive, but to guarantee they will survive, said Fadel Gheit, an analyst at Fahnestock & Co. In a conference callwith analysts, top Phillips and Conoco officials said the merger would allow them to save at least $750 million annually in part through the elimination of an unspecified number of jobs from the company's combined roster of 58,000 employees. "You cannot say you are cutting cost if you cut less than 5 percent, said Gheit. "And if you want to be aggressive with a sharp knife you can cut 15 to 20 percent, which I see as unlikely." Officials took pains to describe the deal as a merger of equals, tough under its terms, Phillips shareholders wil end up with a 56.6 percent stake in the new company.[72]
Businessweek reported in 2005 chief executive officer Mulva had conceived the bold $16 billion deal that created ConocoPhillips in 2002 that vaulted it into the league of energy giants so large they're called supermajors and was an aggressive risk-taker willing to place multibillion-dollar bets in the most volatile places on earth. All of the industry's big players are swimming in cash, reported Businessweek but Mulva is plowing some 70% of the company's expected cash flow back into the business, compared with 60% at Chevron Corp. and 35% at Exxon Mobil Corp.. "We're aggressive about where we want to be five years from now," said Mulva. "Even with the benefit of hindsight, Mulva has done a lot right," wrote Mark Morrison. "His aptly timed Conoco acquisition put the company in a position to benefit from a new global dynamic of rising energy demand that could last into the next decade. And his bold plans may ultimately prove that he adjusted more wisely and quickly to the changing world of energy than the other majors. Right or wrong, no one will accuse Mulva of being shy."[73]
According to Jim Mulva's presentation to financial analysts on July 14, 2011, ConocoPhillips' view was that the company needed to go up in size. That is one of the reasons for the merger -- to compete around the world. "We also felt, looking back 10 years ago, that there is going to be consolidation in the industry. And that made a lot of sense that we were pretty bullish about oil prices and we feltthe supply and demand situation of oil would get tighter with time."[74][75][76]
2001: Impact of Merger of Conoco and Phillips on Oklahoma Communities
KOCO reported on November 19, 2001 that merger of Conoco and Phillips in 2001 stunned residents in both Bartlesville and Ponca City. "This could be a bad deal for Bartlesville," said an unnerved Bartlesville resident Chuck Tate, who realizes how the economic fortunes of his town are tied to the huge oil company based. "I hope not, but I'm expecting the worst." Bartlesville's fortune has long mirrored the ups and downs of the company founded in 1917 by brothers Frank and L.E. Phillips. There was downsizing after the 1980s oil bust. Bartlesville embarked on a sustained effort to diversify its economy, luring new businesses and factories but nothing to compare to Phillips. During the oil boom 20 years ago, Phillips employed 9,000 locally, half the city's workforce. "Phillips has obviously been a huge part of this town, in my lifetime anyway," said local travel agency executive Gary Spears. "It's scary." Spears said all of his business is directly related to arrangements with Phillips or tied indirectly to travel by Phillips' employees or townspeople who benefit from the company. "When they say the Phillips' headquarters is not going to be here, it's a huge announcement," Spears said. "I don't know what that means at this point. Nobody does."[77]
ConocoPhillips will based in Houston, home to Conoco. It will keep a reduced presence in Bartlesville, Okla., where Phillips employs 2,400 at its headquarters and research facility. "This is really a growth story for Conoco and Phillips," said Conoco CEO Archie Dunham who is delaying a planned retirement to serve as chairman of the combined company. Phillips chairman James Mulva will be chief executive of the company, and become chairman when Dunham retires in 2004. Gov. Frank Keating said the merger was "unavoidable to ensure the survival in Oklahoma of both companies." "While some job reductions will result, I have assurances from the leaders of the new company that it will maintain an even stronger Oklahoma presence," he said.[78]
Also affected is Ponca City, 70 miles due west, where Conoco's refinery and offices employ 1,900 of the town's 26,000 people. "One of the great fears we've had in Ponca City was that Conoco might be the victim of a hostile takeover," said Ponca City Mayor Tom Leonard. "Now that they have created the third largest oil and gas company in the United States, that pretty much eliminates that risk."[79]
2002: Fire at Ponca City Refinery
A fire occurred at Ponca City Refinery in June 2002, when severe lightning and storms hit the Ponca City area. The plant's fire brigade quickly doused a small blaze thought to be related to a power surge from a lightning strike.[80]
2003: Archie Dunham Paid $25 Million Bonus for Merging Conoco with Phillips 66
Houston Business Journal reported on April 27, 2003 that a financial sweetener triggered by the merger of Conoco and Phillips 66 allowed ConocoPhillips Chairman Archie Dunham to pull in more than $31 million in 2002. Archie Dunham, CEO of Conoco in 2000, received a $25 million "change of control" payment and a corresponding "tax gross-up payment" which together surpassed $26.6 million. Dunham's bonus was made "in connection with the merger" of Houston's Conoco and Bartlesville, Okla.-based Phillips, according to Securities and Exchange documents filed by Houston-based ConocoPhillips.
ConocoPhillips Executive Vice President Jim Nokes received change of control payments exceeding $19.6 million. Nokes oversees refining, marketing, supply and transportation operations. His total compensation last year was more than $21.4 million. At the same time, the company's Rob McKee floated into retirement with golden parachute bonuses that totaled $22.9 million, a vast majority of which was a change of control payment. On March 31, McKee retired as the ConocoPhillips executive vice president over exploration and production. His total compensation of more than $24 million last year likely would have been hard to fathom when he joined Conoco Inc. in New Orleans as a junior engineer in 1967. The combined change of control payments for former Conoco Executives Dunham, McKee and Nokes amounted to approximately $64.8 million. "Those guys are getting rich," says one energy stock analyst.[81]
“Integrity and ethics are among the responsibilities of all our corporate leadership, especially myself,” said Dunham in 2012. “Integrity and ethics must be evident in not only our personal lives, but also in our professional conduct before they can be instilled in our employees.”[82]
Jim Mulva, Phillips CEO and president, missed out on a change of control payment, but still managed to earn more than $18 million in 2002. A majority of Mulva's money in 2002 came via a "long-term incentive payout" of more than $14.9 million. Mulva was chairman and CEO of Phillips before the merger, but now he shares top billing with former Conoco Inc. Chairman, CEO and President Dunham.[83]
2003: Worker Dies in Accident at Ponca City Refinery
On July 21, 2003 Tim Crank, 39 and another employee were removing a vertical pump and motor inside a gas plant. For some reason, a hydrocarbon was released inside the plant, triggering an explosion and fire. Crank died 10 days later.[84] A a preliminary investigation showed a hydrocarbon leak reached an ignition source. Crank had been with ConocoPhillips since 1996. At the time of the fire, he was a unit operator in the west plant. Company spokeswoman Shanley Wells said the company is much like a family and at 11 a.m. employees observed a moment of silence for Crank. "This is devastating news here for us, for all of us. We offer the family all the sympathy we have," she said. This was the first fatality resulting from an accident at the Ponca City refinery since 1946, Wells said.[85]
The explosion and fire on July 21, 2003 shut down several units at the Ponca City Refinery. ConocoPhillips CEO Jim Mulva said that ConocoPhillips planned to run its Ponca City refinery at about 62 percent of capacity in the third quarter. The plant has the capacity to produce about 105,000 barrels of gasoline a day and 74,000 barrels a day of distillate fuels, which include heating oil and diesel. "We think the lost profit opportunity impact on net income in the third quarter is about $30 million," Mulva said.[86]
Two employees and a contract worker were injured when the fire on the Ponca City refinery's west side started about 11 am. Plumes of black smoke filled the sky, but by evening, the smoke had decreased. Plant manager Ron Armstrong said he had no estimate of how long the fire would burn, but that it didn't seem to threaten other parts of the refinery. "The fire is contained. We're just letting it burn itself out," he said. Temperatures topped 100 degrees as 60 firefighters from several departments fought to contain the blaze.[87]
The last known fire at the plant was June 2002, when severe lightning and storms hit the Ponca City area. The plant's fire brigade quickly doused a small blaze thought to be related to a power surge from a lightning strike. In October 1999, two workers were burned when fuel ignited in an 80,000-barrel storage tank. An estimated 50,000 barrels of fuel were consumed in the fire and damage was estimated at $1.5 million. In July 1996, the plant experienced a fire in a hydro heater, which removes sulfur from the hydrocarbon feed stock for the manufacture of oil and gas products. No one was injured and production was not interrupted. A major fire occurred in May 1990 when a spectacular, propane-fed blaze swept through a dewaxing unit, causing more than $1 million in damage. On New Year's Eve 1990, fire damaged one of the Ponca City plant's three crude oil processing units. The unit refines crude oil into such products as gasoline, propane, kerosene and diesel fuels, and was processing 56,000 barrels a day before the fire. No one was injured.[88]
According to Conoco, rebuilding the damaged parts of the refinery and investigating the fire that erupted there will be a substantial undertaking. The cause of the fire, the extent of the damage and the cost of that damage remain unclear, but the company's management may receive a report on what sparked the fire as early as this week, said ConocoPhillips spokeswoman Shanley Wells adding that the majority of the refinery's operations weren't damaged by the fire. The company has convened at least four teams: a short-term team to help restart the operations that weren't damaged, a long-term team to focus on the refinery's rebuilding efforts, a team to investigate the incident and a team to conduct a damage assessment, the spokeswoman said. Additional personnel from other refineries also are assisting in the recovery effort, she said. "This is a huge undertaking," Wells said. "Within those various teams are subteams. We have a lot of personnel and resources focused on this."[89]
2005: ConocoPhillips Closes Demonstration Plant in Ponca City Eliminating Up to 120 Jobs
On October 21, 2004 ConocoPhillips announced that it would shut down its demonstration plant eliminating up to 120 jobs. The plant was built to test technology designed to convert natural gas into liquid fuels. "It is never easy to make this kind of announcement," said George Paczkowski, ConocoPhillips vice-president of downstream technology in Ponca City, "but we've known this demonstration plant was temporary since we built it. The plant was scheduled to close in July, 2005 eliminating 80 full-time positions and 40 contract jobs. Paczkowski said many of the full-time workers would be reassigned to other positions at the company.[90] "We started the plant to prove our technology to turn natural gas into diesel, and then to provide data for the design of a commercial plant," said ConocoPhillips spokeswoman Shanley Wells-Rau. "In 2005, we said that we successfully developed and proved the technologies. But the company never has moved on to build one commercially. It was never meant to be a long-term, commercial plant."[91]
The Daily Oklahoman reported on December 20, 2008 that ConocoPhillips had sold the company’s natural gas-to-liquids demonstration plant along with the technology behind it for an undisclosed amount of money. The plant was a demonstration project that opened in 2003 and closed in 2005 and had the capability of producing 400 barrels a day of liquid fuels from natural gas. The buyer was Industrial Properties, based in Kansas City who plan to dismantle the plant to resell its steel and equipment.[92]
2009: ConocoPhillips Moves 700 Jobs Out of Ponca City
On November 7, 2008 ConocoPhillips announced that the company was planning to downsize their operation in Ponca City and that all 700 office worker positions in Ponca City were being for relocated to Bartlesville or Houson. On November 8, 2008 ConocoPhillips first announced that all 700 office worker positions in Ponca City are being considered for consolidation or relocation. "Consolidation and relocation are options we're looking at," said company spokesman Tracy Harlow. "Any and all options are still on the board right now." Most of ConocoPhillips' nonrefinery jobs in Ponca City werefocused in the credit card, information technology, facilities and other support operations, she noted. A steering committee, including ConocoPhillips managers, was looking at options. The review started November 2008 and had not narrowed into specifics so far, Harlow said. The 750 people employed in refinery operations would not be affected by the review.[94]
The Tulsa World reported on February 17, 2009 that ConocoPhillips had decided to relocate all of its 750 non-refinery positions out of Ponca City within two years and that first 250 jobs will be moved in 2009 with 180 jobs going to Houston and 70 jobs to Bartlesville. The positions moving first include jobs in technical services, research and development, engineering and support, human resources and Internet technology, among others. Management met with hundreds of Ponca City employees to tell them the news. "It’s a difficult time in general for all ConocoPhillips employees," said ConocPhillips spokesman Tracy Harlow. ConocoPhillips originally planned the Ponca City relocation study as a standalone effort in 2008 but falling energy and credit markets forced ConocoPhillips to consider layoffs and include Ponca City into its overall business efficiency study. "We made the strategic decision to consolidate locations for the most effective corporate operations,” Harlow said. “Obviously we are conserving cash right now, so cash will limit relocations in 2009.”[95]
Business Week reported that Ponca City took a hit from ConocoPhillips in February 2009, when the company said it planned to move 750 non-refinery jobs out of the city of about 26,000 to Bartlesville and Houston. But the refinery has remained a key part of ConocoPhillips' operations, said ConocoPhillips spokesman John Roper. Rich Cantillon, president and CEO of the Ponca City Chamber of Commerce, said ConocoPhillips upgraded the refinery last year and is performing another upgrade this year. No new oil refineries have been built in the U.S. since 1976, which is another positive sign for the Ponca City facility's future. "It's not going anywhere," Cantillon said. "We are good to go. Ponca City is a happy, good community. ... It's fascinating to see how (the split) will all play out, but we'll always have the refinery. There won't be any more job loss for Ponca City when it comes to (ConocoPhillips). There could be job growth."[96]
City officials were disappointed in ConocoPhillips' announcement that 750 jobs will be relocated from Ponca City, but expect the community to bounce back. "We would have liked to have seen them expand here. We have plenty of office room for them and had hoped they would grow their operation here," said City Manager Craig Stephenson. "We also understand it's a corporate decision." Mayor Homer Nicholson said Conoco has been a good corporate citizen and he is glad ConocoPhillips has decided to leave Oklahoma's largest refinery in Ponca City. "We are thankful," he said. "We were hoping the business optimization study would give them a reason to expand their business in Ponca City. Unfortunately, that did not happen," Nicholson said. "We have weathered larger reductions in force than this one," the mayor said.[97]
Effect of ConocoPhillips' Downsizing on the Community of Ponca City
The Tulsa World reported in 2009 that Conoco employed more than 5,000 people in Ponca City before the oil bust of 1985, the year Dave Myers, executive director of the Ponca City Development Authority, pinpoints as "the beginning of the end for us being a company town." The end itself came in 2002, when Conoco merged into ConocoPhillips and began transferring departments en masse to the Phillips campus in Bartlesville. In November 2009, the company announced it would probably transfer the final 700 office jobs out of Ponca, leaving only 750 jobs in the refinery.[98]
Until a few months ago, Fred Holmes worked in research and development with more than 100 other technicians. Then he and his wife had to choose between early retirement or transferring to Bartlesville, an hour and 20 minutes east of Ponca. "It was a 12-hour day any way you look at it," Holmes says. "She couldn't put up with it then, and I didn't want to do it now." After a few weeks, his wife quit the company and invested in a downtown bridal shop, Affairs to Remember. Now Holmes works there, too — recently moving the shop to a larger storefront and adding a catering service. But Homes still resents the company for, as he puts it, "abandoning Ponca City." While he had a small business to fall back on, Holmes has watched friends and co-workers move away to look for jobs elsewhere. "You used to be able to wake up in the morning and know you had a job and know that your family would be provided for," he says. "Now, nobody knows what's going to happen next."[99]
Mike Dove took early retirement when the company moved his entire department to Bartlesville. When he grew up during the '60s, a job with the company seemed like "the ultimate prize," Dove says. Like many of his classmates, Dove went off to college not to escape Ponca City, but so he could come back and stay. "You could pretty much count on a job for life, and it gave you a sense of security and stability. "By the '90s, that wasn't the case at all." For his own two children, both now adults, staying in Ponca City was never an option. "Finding a job," Dove says, "pretty much means going somewhere else."[100]
KOCO reported on November 7, 2008 that City development executive director David Myers said the diversity of the economy would lessen the effect of possible job losses. "The impact of this economically is not nearly as severe as the impact emotionally," said Myers adding that city leaders didn't want to depend on a single employer that could make or break the community and that other employers also make up a big portion of the economy. "Sensor testing is a $6 billion worldwide industry, and we're the only place in the world where you come and have your sensor tested by a neutral third party," Myers said. "Our real concern is with the individual families that might be impacted by this, and we want to make sure that there are some viable alternatives for them to stay here in Ponca City because most of them do want to stay here," Myers said. Barber Barney Barnwell said he has been in this situation before and so has the community. "We can survive," he said. "Ponca can survive."[101]
2010: Possible Sale of Ponca City Refinery
In May 2010, there was a lot of discussion in Ponca City about the possibility that ConocoPhillips was interested in selling its Ponca refinery to another oil company and getting out of Ponca City especially after ConocoPhillips Chairman and CEO Jim Mulva met with corporate analysts in October 2009 for the ConocoPhillips Q3 2009 Earnings Call and announced that the company's capital budget would decrease by about 12 percent in 2010 and that ConocoPhillips planned to divest $10 billion in refining, exploration, and production assets in a bid to improve its financial position.[102]
At the earnings call on October 29, 2009 Mulva was asked specifically about the possibility that ConocoPhillips might divest itself of some of its refineries and Mulva said that the company was "going through a more strategic assessment [of its refineries] because there are some that are less sophisticated. We will think long-term when the market gets a little bit better about selling some refineries. We think that is going to be subsequent to the next two years for 2012, 2013 and we have in mind a number of facilities that we think might have some value to someone else."[103]
The Tulsa World and the Bartlesville Examiner-Enterprise report that Mulva appeared before a packed house at the Bartlesville Community Center on May 21, 2010 to present the annual company update, talk about ConocoPhillips' plans for the future, and clarify the company's plans for Bartlesville and for the Ponca City refinery.[104]
Mulva told his audience that employees in Bartlesville and Ponca City have little to fear. Although ConocoPhillips announced last year that it was tranferring or eliminating all 700 non-refinery jobs in Ponca City, ConocoPhillips plans to keep the Ponca City refinery with it's 750 employees. "We will retain only the largest and most sophisticated refineries," Mulva said. "Ponca City is a large and sophisticated refinery that is important to our refinery portfolio."[105]
Mulva added that he didn't forsee any change in the 3,100 ConocoPhillips employees in Bartlesville, and that there was actually room to accommodate an additional 800 to 1,000 more employees in Bartlesville. "There's no change in our long-term plans for Bartlesville," Mulva said. "It's a very important global support center for ConocoPhillips."[106]
"Ponca City Still a Competitive Refinery"
The announcement reinforced a statement made in February 2009 at the time that the announcement was made that ConocoPhillips non-refinery employees in Ponca City would be relocated over the next three years. "The refinery in Ponca City continues to be a competitive refinery," said John A Carrig, President and Chief Operating Officer of ConocoPhillips, when he talked to students as part of the Distinguished Speaker Series at the Michael F. Price College of Business at Oklahoma University. "Like all of our facilities, we are continuing to make investments to enable it to thrive. I don't see any particular change in the outlook for it."[107]
Jim Mulva reiterated in his conference call to financial analysts on July 14, 2011 that in answering a question by Ed Westlake of Credit Suisse that "if we have an alternative to sell one of the less sophisticated refineries in a way, we are not going to delay until this is done accomplishing and doing that."[108][109][110]
Ponca City and the Spinoff of Phillips 66 in 2012
Other Stories About the Ponca City Refinery:
- Latest News from the Ponca City Refinery
- Ponca City and its Century-Old Oil Refining History
- Ponca City and the "Merger of Equals" with Phillips in 2001
- Ponca City and the Spinoff of Phillips 66 in 2012
- How Much Money Does the Ponca City Refinery Earn for Phillips 66?
- What Are Phillips' Plans for the North and South Towers?
Implementation of the ConocoPhillips Split
On May 1, 2012 Phillips 66 issued a press release announcing that Phillips 66 had emerged as an independent downstream energy company with industry-leading businesses in refining and marketing, midstream, and chemicals. Created through a spin-off of these assets from ConocoPhillips, Phillips 66 begins regular trading on the New York Stock Exchange this morning under the ticker symbol PSX. "Our strategic approach combines one of the world's most competitive refining and marketing operations with rapidly growing midstream and chemicals businesses," said CEO Greg Garland. "Phillips 66 will be clearly differentiated from pure-play refining companies with specific plans for enhancing returns and growing shareholder distributions. We have an exciting future ahead of us."[113]
On November 11, 2011 the Tulsa World reported that Phillips 66 would be the name for the new independent oil and gasoline refining and marketing firm, created as ConocoPhillips splits into two companies. ConocoPhillips will keep the current name of the company and will concentrate on the exploration and production side while Phillips 66 will include refining and marketing portions of the company. Each company will be run independently and will have different tocker names in the stock market. The refinery in Ponca City employs about 700 people while Bartlesville will be the global center for the Phillips 66 technology organization as well as the transaction services organizations for both companies.[114] ConocoPhillips CEO Jim Mulva will resign once the split is complete and Greg Garland will be the new CEO of Phillips 66.[115] The decision to name the new entity for Phillips 66 is because of name recognition and branding. "Phillips 66 has strong brand recognition and value, and it provides a link between our rich history and our exciting future," Garland said Thursday in a news release. "Our name reflects an independent spirit and drive."[116]
On April 4, 2012 ConocoPhillips' board of directors gave its final approval for the spin-off of its downstream businesses into Phillips 66.[117] ConocoPhillips executive vice president and CFO Jeffrey Sheets announced on April 23, 2012 that ConocoPhillips is putting its final touches on its spinoff of Phillips 66 this week, and the transaction will take place as scheduled on May 1, 2012.[118]
Garland Says the Spin-off of Phillips 66 Was Executed Flawlessly
Greg Garland told investors and securities analysts at the 2012 Barclays CEO Energy-Power Conference in New York on September 5, 2012 that spin-off of Phillips 66 was executed flawlessly. "I think it's a real tribute to the dedication and the capability of the Phillips 66 employees. They did a great job of getting our feet underneath this. The Company has stood up. We're ready to go. The systems are operating well. We've been running well and capturing good opportunities in the market.[119]
How the Spinoff Affects Ponca City and Bartlesville
Rod Walton writes in the Tulsa World on April 28, 2012 that with the spinoff, Ponca City may not be affected as dramatically by the split as Bartlesville. Going back to the 2002 merger shows that Bartlesville and Ponca City were affected differently leaving the two cities in different situations today."[120]
Conoco employed nearly 1,900 people in Ponca City at the end of 2001, while Phillips had a workforce of 2,500 in Bartlesville. The ConocoPhillips numbers shrunk to only 750 refinery workers in Ponca City but swelled to 3,500 at the shared services center in Bartlesville. Ponca City is now purely a refining town, with Ponca City having lost all 750 non-refinery jobs during the three-year repositioning plan. "Today, we're a refinery town," said David Myers, executive director for the Ponca City Development Authority. "No doubt about it: the merger was not kind to Ponca City." "The dark humorists in that city used to joke that Ponca City got the first name in the merger but little else," writes Walton. "ConocoPhillips opted to shut down a carbon fibers plant early on and eliminated the rest of the 750 non-refinery jobs beginning in 2009.""[121]
The Bartlesville Examiner-Enterprise editorialized on April 29, 2012 that Jim Mulva has "proven to be a true friend to the City of Bartlesville."[122] According to Rod Walton, Bartlesville was a big beneficiary of the ConocoPhillips merger and seems to have lived a charmed life economically over the past ten years. Although the home of Frank Phillips doesn't employ 9,000 company workers as it did in the early days, the 1,000 employees added since 2002 have kept downtown buildings such as Plaza and Adams full of mid-level computer, credit and other support personnel. But now Bartlesville operations are in flux and there is much uncertainty about the future. "All employees are being moved to one of the two companies, with co-workers who once sat side to side now literally shifted to separate buildings," writes Walton. ConocoPhillips will employ about 1,700 people in the downtown Plaza and Frank Phillips Tower Center buildings and in the Adams warehouse. Phillips 66's Bartlesville workforce will number 1,900 people, housed in the main Adams and Phillips buildings and the Research and Development Center on the west edge of the city.[123] The Bartlesville Examiner-Enterprise reported on April 29, 2012 that the "split or 'repositioning' as it has been called by company officials, has required many existing local employees to shift jobs and even physically move from one building to another within the extensive downtown Bartlesville office complex" adding that "while no one can predict the future with perfect clarity, Bartlesville appears no worse for the wear during this complex process."[124]
ConocoPhillips CEO Ryan Lance and Phillips 66 CEO Greg Garland reassured its employees in Oklahoma in an op-ed they wrote for the Bartlesville Examiner-Enterprise titled "ConocoPhillips, Phillips 66 have deep roots in Bartlesville" that "ConocoPhillips and Phillips 66 together employ nearly 4,500 people in Oklahoma, an increase in recent years. Going forward, we will both maintain Global Services Centers in Bartlesville providing essential finance, information technology and other vital support to our personnel around the world. Elsewhere, Phillips 66 will continue operating the Ponca City Refinery, by far Oklahoma’s largest, and will remain the leading gasoline marketer. ConocoPhillips will continue producing oil and natural gas from the Anadarko Basin and the Panhandle area." Lance and Garland added that "we continue encouraging both current and incoming employees to maintain our proud tradition of community service. Bartlesville is a special place to work, live and raise a family, and we want to help keep it that way. This is an exciting time for ConocoPhillips and Phillips 66. All of our Oklahoma communities are great homes to our people and businesses, and we both look forward to long and bright futures here."[125]
"The Phillips and Conoco merger has taught everyone, Poncans and Bartians alike, to simply expect the unexpected," writes Walton. "In other words, who knows what ConocoPhillips and Phillips 66 will look like 10 years down the road?" "We do have a strong Conoco retiree group that lives here," says Dave Myers. "There's still talk in the community, still those who'd like to go back to the old days. I think most people have moved on."[126][127]
The Bartlesville Examiner-Enterprise reported on September 12, 2012 that Greg Garland visited Bartlesville on September 11, 2012 to speak to the Chamber of Commerce and told members of the chamber that Bartlesville is of strategic importance to Phillips 66. “As we were approaching the repositioning and spinning Phillips 66 out of ConocoPhillips, there was never any question that Bartlesville would continue to be a strategic and important part of our company, in the support of our company operations, for a very long time,” Garland said. Garland added that Phillips is “pretty much at capacity” in Bartlesville. “I don’t see us moving a lot of people into Bartlesville,” he said, adding that Bartlesville will always be a core asset for the company. “There’s not big plans to move in a big section of the workforce. We just don’t have the capacity or the space here today to do that.”[128]
Visit of Phillips 66 Leaders to Ponca City
On March 27, 2012, the Ponca City News reported that leaders from Phillips 66 visited Ponca City and were met by community leaders.
On the Phillips 66 side were Bob Herman, Future Lead of Health, Safety and Environment; Pete Stynes, Ponca City Refinery Manager; Larry Ziemba, future Lead of Refining, including Projects and Procurement, and President, Global Refining; Chantal Veevaete, future Human Resources; and Tim Taylor, future Commercial, Marketing, Transportation and Business Development.
On the Ponca City side were City Manager Craig Stephenson; Lee Evans, Chair of the Ponca City Area Chamber of Commerce; David Myers, Ponca City Development Authority; Rich Cantillon, Chamber of Commerce/Tourism Bureau; Carl Renfro, community leader; and Larry Murphy, Chair of the Ponca City Development Authority.[129]
Phillips 66 CEO Greg Garland, although originally scheduled to visit Ponca City with his management team, was not able to attend. Ponca City Mayor Homer Nicholson, retired from ConocoPhillips after 38 years service, was also unable to attend.
Proposal to Rename Phillips 66's Refinery to the "Marland Refinery in Ponca City"
On March 12, 2012 a web site was created asking the management of Phillips 66 to consider honoring EW Marland, the oil pioneer who built the refinery in 1919 and developed the oil industry in North Central Oklahoma by restoring the name of the Phillips 66 refinery in Ponca to its original name, "Marland Refinery in Ponca City," as a gesture of goodwill to the community of Ponca City.
"The Ponca City News" recently announced that with the split of ConocoPhillips into two companies, the ConocoPhillips operation in Ponca City, Oklahoma will soon be renamed Phillips 66.
Frank Phillips, the founder of the Phillips 66 Oil company, was a man who knew how to use his courage and initiative and great administrative ability to create industry and wealth in Oklahoma leaving a legacy in the oil company that bears his name that will always be a monument to his memory.
But there is another Oklahoma oil pioneer who was equally important in developing the oil industry and bringing prosperity and advancement to Northern Oklahoma and that man was EW Marland.
EW Marland pioneered the use of geological techniques in the oil industry and was years ahead of his time as an employer providing housing, loans, medical care, and other benefits for thousands of employees who worked at his refineries and pipelines but Marland lost everything to the powerful JP Morgan banking interests - even losing his name on the oil company that he founded in Ponca City.
It is altogether fitting and proper that Phillips 66 honor the heritage of oil development in Northern Oklahoma by recognizing Frank Phillips and EW Marland.
The executives of Phillip 66 have honored the memory of Frank Phillips by choosing to name their new company for Phillips. We think Phillips 66 should honor the legacy of oil pioneer EW Marland by naming their refinery in Ponca City for Marland, the man who started the refinery and brought advancement and development to North Central Oklahoma.[130]
It would mean a great deal to the residents of Ponca City for Phillips 66 to acknowledge the history and heritage of the oil industry in Oklahoma by honoring these two great oil pioneers, Frank Phillips and EW Marland.
Renaming the refinery the "Marland Refinery in Ponca City" will serve as a symbol going forward of the partnership between the oil industry and the citizens of North Central Oklahoma that honors the legacy of these two great oil pioneers.[131]
A full page advertisement by Phillips 66 announcing its "intent on continually earning the trust of the communities we serve and operating with the highest levels of integrity" appeared in the Ponca City News on May 1, 2012.[132] A quarter-page advertisement congratulating Phillips 66 on its creation and asking Phillips 66 to honor the legacy of EW Marland appeared in the Ponca City News on May 1, 2012.[133][134]
Archie Dunham Says That He Disagrees with the Decision to Split Off Phillips 66 from ConocoPhillips
David Hunn wrote in the Houston Chronicle on September 28, 2016 that sixteen years ago, on his way to a black-tie fundraiser in Oklahoma City, Archie Dunham, then chief executive of the Houston oil company Conoco, stepped out of hotel elevator just as Jim Mulva, his counterpart at Phillips Petroleum of Oklahoma, emerged from another nearby. "Low prices and rising costs were driving a wave of mergers in the industry, including the blockbuster combination of Exxon and Mobil, and leaving smaller companies like Conoco and Phillips vulnerable to takeover," writes Hunn. "Dunham didn't like the idea of getting gobbled by a major oil company; he took the opportunity to broach the idea of a merger - a merger of equals - with Mulva." Big oil companies had been circling Conoco for some time when Dunham found himself in a hotel lobby with Mulva, the Phillips CEO. Dunham, in a recent interview, said Phillips seemed like a good partner to him. They had strengths in different parts of the world that complemented each other, he said, but they also came from essentially the same place. "We felt like our cultures, values, were very similar," Dunham said.
After running into each other at the Renaissance Waterford on that evening in 2000, Dunham and Mulva quickly parted, wary of being spotted together and tipping anyone off to their discussion. But they soon met again, secretly, in Colorado. Alone in a room in the Broadmoor Hotel in Colorado Springs, they talked for four hours about business, family and values. A few months later, on a stormy day in November 2001, the two men met in Tulsa, Okla. to announce the merger that would create world's sixth biggest integrated oil company. The new firm would have $50 billion in revenues, $60 billion in assets, 8.7 billion barrels in oil reserves and 58,000 employees worldwide. Dunham persuaded Mulva to name the new company ConocoPhillips, and keep it headquartered in Houston. The city's easy access to international flights made the decision practical. "Besides, I was a Houstonian," Dunham said. "I wanted Houston to have the headquarters." In exchange, Dunham took the chairman slot; Mulva became chief executive.
Dunham retired in 2004. In 2012, the company split again, spinning off its refining, retail, and marketing operations to form Phillips 66, while ConocoPhillips focused on oil exploration and production. Mulva, still CEO then, said that two independent companies focused on their respective industries would be more competitive. He insisted both were big enough to compete and generated enough cash to invest in their futures. Dunham stayed out of the fray, he said recently. He wrote letters to the board, arguing that an integrated company can use cash from its refining business to fund oil exploration - but he never sent them. According to Hunn, the separation is a decision with which Dunham disagrees, even now.[135]
News and Views from the Ponca City Refinery
Introduction
In 1908 E. W. Marland came to Oklahoma after losing his fortune in the Pennsylvania oil fields in the panic of 1907 and by 1920 had reestablished himself and started the Marland Oil Company building the Marland Refinery in Ponca City, Oklahoma. Marland was a visionary and not only pioneered the use of geophysical techniques in the oil industry but was years ahead of his time as an employer providing housing, loans, medical care, and other benefits for the thousands of employees who worked at his refineries and pipelines. The refinery EW Marland built in Ponca City in 1918 has provided employment, opportunities, and benefits to tens of thousands of citizens of Northern Oklahoma in the almost 100 years since the Marland Refinery in Ponca City was built.
This report contains news and commentary about Ponca City, the Ponca Refinery, E. W. Marland and his legacy, Phillips 66 and other Phillips 66 refineries around the world, ConocoPhillips, and the petroleum industry in Oklahoma.
Other Stories About the Ponca Refinery:
- Ponca City and its Century-Old Oil Refining History
- Ponca City and the "Merger of Equals" with Phillips in 2001
- Ponca City and the Spinoff of Phillips 66 in 2012
- How Much Money Does the Ponca Refinery Earn for Phillips 66?
- What Are Phillips' Plans for the North and South Towers?
News from the Ponca City Refinery
Latest News about Phillips 66 and the Ponca Refinery
July 19, 2019: Independent Chemist Says FCC Catalyst Released from Phillips 66 Ponca City Refinery Shouldn't be That Dangerous at All
KFOR reported on July 19, 2019 that according to independent oil and gas chemist Jeffrey Havard of Havard Industries, the FCC Catalyst released from Phillips 66 Ponca City Refinery on July 16, 2019 was part of the Zeolite family. "It's used to break down the crude oil into its individual components such as gasoline and diesel," says Havard. "Instead of an acid that can be spilled and have vapors that come off, this is a dry form. So this catalyst is a natural catalyst, naturally occurring minerals that have salts and things in them that you would typically find in environmental conditions," said Havard. "I've been past that plant many many times, given the fact that it`s a natural mineral, I wouldn't think the catalyst part I would really say shouldn`t be that dangerous at all. Inhaling it? Maybe to a small extent, but I would think unless you are working at the refinery itself that the levels you would be exposed to are far lower," said Havard.
News 4 contacted the family of the woman that went to the hospital with the 6 kids. She reportedly still has a sore throat and is now represented by an attorney.
According to a statement from DEQ, "DEQ has been on-site at the refinery and in contact with Phillips 66 personnel. Philips 66 did file an immediate notice with DEQ and met the requirements for that notice. It is our understanding that there was a release of the catalyst due to an unplanned shutdown of a unit. DEQ will investigate the matter further and is currently evaluating the information in the Catalyst Fact Sheet provided by Philips 66 to determine possible next steps."[136]
July 16, 2019: Mysterious Smoke from Refinery Worries Ponca City Residents, Sends Seven Residents to the Hospital
KFOR reported on July 17, 2019 that a cloud of smoke on July 16, 2019 near the Phillips 66 Refinery in Ponca City has some Ponca residents worried. "First I thought it was something burning 'cause I saw a bunch of smoke but then I saw a cloud. The cloud was pretty dark," Ponca City resident, Patricia Hoffman talking about a large smoke cloud in the street between the Phillips 66 refinery and her house. One resident called police after seeing the smoke: "I'm over here at McFadden and Palm and the whole neighborhood is filled with smoke. It smells tar-y. Like tar or something burning. I don't know whether it's Conoco or- I mean, the smoke is so thick in here you can't hardly see to, you know, the other side of the street," said Ponca resident, Gary Winter. "Big cloud of smoke about 12:30, 1 o'clock, it did smell really toxic though," said Monique Hamilton, Ponca resident.
Phillips 66 released this statement: "At approximately 1:00 p.m. local time, a unit upset occurred at the Phillips 66 Ponca City Refinery, located at 1000 S. Pine Street, resulting in a brief release of catalyst which is used in the refining process. After the release, seven individuals from the community sought medical attention at a local emergency room and have since been released. Our emergency response team immediately responded to the incident. No external readings have been detected by monitoring equipment at our fenceline or adjacent community. The safety of our community, the environment, and our people are of the utmost importance to Phillips 66, and these priorities will guide our efforts as we investigate the cause of this incident. For residents' awareness, our community hotline is (580) 767-7130."
One woman was with 6 kids at the splash pad across from the refinery when she saw the cloud of smoke. She said she immediately got a sore throat and that some of the children complained of throat and eye irritation. She says they went to the Alliance Health Center in Ponca where they initially went inside the emergency room but then were all taken outside where first responders treated them. On Wednesday, the woman treated in the parking lot says she still has symptoms. She told News 4 she spoke with several people associated with Phillips 66 and no one would tell her exactly what that catalyst was. "It makes me kinda worried to live that close and that kinda worries me because my grandkids wanna come visit me or something it might be dangerous for them," said Patricia Hoffman.[137]
The Ponca City News reported on July 18, 2019 that the Ponca City Fire Department was requested by the hospital to send units to assist with the decontamination of the irritating chemical on the affected kids. Reports indicate that the PCFD was on scene at the hospital for 42 minutes assisting hospital staff. The responding PCFD units were provided with a Safety Data Sheet (SDS) of the released chemical, which was called a catalyst, by Phillips 66.
Local residents of the area reported on social media that the gas cloud was so thick it obscured the street. Videos and photos of a thick steam-like cloud were also posted. It was originally reported on the Ponca City police log as a steam release from the refinery. Further inquiries were referred by the Ponca City Police Department to the Kay County Sheriff’s Office because the refinery is physically outside the city limits. A representative from the Oklahoma Department of Environmental Quality (DEQ) said that Phillips 66 is required to submit an incident report by 4:30 p.m. the following work day after any event of this type.[138]
The Ponca City News reported on July 19, 2019 that Phillips 66 filed an “Immediate Notice” with the Department of Environmental Quality (DEQ) in reference to the catalyst release listing the pollutant released from Ponca City Refinery’s Fluid Catalytic Cracking (FCC) unit as “Opacity.” FCC catalyst, which helps convert crude oil to finished products like gasoline in the refining process, is a gray, powdery material whose primary component is like pottery clay. It also contains small amounts of metals and metal oxides that are normally also found in outdoor soil and dust. Studies on short-term exposure to FCC catalyst show that it is unlikely to cause health effects beyond slight eye and respiratory tract irritation. It is not anticipated that a single short-term exposure to FCC catalyst dust in the air would increase the risk of long-term health effects.[139]
Steps to Take Following Exposure
The Ponca City News reported on July 20, 2019 on issues concerning the release of FCC Catalyst from Phillips 66 Ponca City Refinery on July 16, 2019.
The substance released in the recent refinery unit upset, according to Phillips 66, is Fluid Catalytic Cracking (FCC) Catalyst. Phillips 66 says that “studies on short-term exposure to FCC catalyst show that it is unlikely to cause health effects beyond slight eye and respiratory tract irritation.” The Phillips 66 statement continues “it is not anticipated that a single short-term exposure to FCC catalyst dust in the air would increase the risk of long-term health effects.”
While that is true, there is some additional details. In addition to amorphous silicate (fine silica dust), spent FCC catalyst contains toxic materials like vanadium, arsenic, aluminum, magnesium, molybdenum, cobalt and nickel; heavy metals that are known carcinogens. While materials like this are toxic, how toxic they are and how they affect the body is determined by how long and how often a person is exposed, and what amount of the material is ingested (either by breathing it in, swallowing it, or through the skin and eyes). Ingestion of any type of small particle, especially though inhalation, is harmful to human health. Basically, if something is small enough to be inhaled through the nose, it can trigger respiratory or cardiovascular problems. Amorphous silica, which is the primary component of FCC catalyst, when inhaled, is associated with an increased risk for inflammation and emphysema, according to the National Center for Biotechnology Information (NCBI).
The report in the Ponca City News also discusses how "there are concerns in the medical community about the effects on residents when the details of any refinery incident occurs and the details of the incident, e.g. exactly what was released, how much was released, what does the dust contain, and what it means to the community medically, aren’t provided."
Scientists who study the impact of environmental incidents on the community have found that ambiguity and uncertainty surrounding the cause and content of refinery incidents can lease to “psychological distress for exposed population because of fear of potential health problems, the uncertainty of the threat, lack of control, actions of other perceived to cause the threat or reacting against it, and stigmatization.
According to a study published on serious refinery incidents in the journal ‘Risk Analysis’ in June, 2008, “Coping may not be sufficiently effective, and stress-induced disease may eventually arise.” That study concluded that “Environmental health hazards threaten the physical and mental health of exposed populations.” It continues “…concern about such hazards may lead to negative health consequences that are perhaps as important as direct physical harm from such hazards.” In other words, people do not have to have direct exposure to any chemical or substance inadvertently released to have real, significant health consequences from the release, according to the NIH.[140]
What is FCC Catalyst that was Released in the Upset?
FCC catalyst, which helps convert crude oil to finished products like gasoline in the refining process, is a gray, powdery material whose primary component is like pottery clay. It also contains small amounts of metals and metal oxides that are normally also found in outdoor soil and dust. Ponca City Now reported on July 18, 2019 that Phillips 66 spokesperson Diane Anderson provided a fact sheet from the Center for Toxicology and Environmental Health, L.L.C, written in September 2018 abut FCC Catalyst:
What is FCC catalyst? Many refineries use a process called Fluidized Catalytic Cracking (FCC) that utilizes a FCC catalyst to convert heavy petroleum products, such as oil, into lighter petroleum products, such as gasoline. FCC catalysts’ appearance is generally powdered and is primarily comprised of amorphous silica and clay-like materials and small amounts of metals or metal oxides.
How may I be exposed to FCC catalyst? The FCC catalyst is intended to be contained in the FCC Unit, however, a process upset or malfunction of this unit could release FCC catalyst into the air. An individual’s exposure to FCC catalyst following a release will depend on the individual’s proximity to a release site and on how much time has passed since the release. Persons directly exposed to airborne FCC catalyst may inhale these particles. After time, the released FCC catalyst will deposit on outdoor surfaces downwind of a release site. Exposure may also occur via ingestion when a person puts their hands on a surface with FCC catalyst residue on it and brings their hand to their mouth (hand-to-mouth contact) while eating, smoking, etc.
What happens to FCC catalyst following a release in the environment? Local weather conditions will largely influence the dispersion of FCC catalyst following an accidental release into the environment. Wind speed and direction will affect the movement of lofted FCC catalyst particles, diluting and spreading them downwind from a release site until they eventually reach the ground and settle on outdoor surfaces. The evaluation of surface soil and water may be necessary through the collection of environmental samples with a comparison to appropriate health-based screening levels to determine the extent of potential impact, if any.
What are the potential health effects of FCC catalyst? Exposure to airborne FCC catalyst particles immediately following a release may cause reversible shortterm coughing and wheezing in sensitive individuals. However, it is unlikely that a single short-term exposure to FCC catalyst in air would be associated with an increased risk of long-term health effects. In recent FCC release incidents, health authorities noted minor potential health effects, such as short-term, reversible coughing or wheezing by those exposed to FCC particulate. Similarly, accident investigators have not reported any potential long-term health effects of concern.
How can I protect myself from the adverse health effects of FCC catalyst exposure? In the event of an accidental release of FCC catalyst, remove yourself from an environment containing the catalyst to limit inhalation and dermal exposure. You may be advised to “shelter in place” to limit your exposure. “Shelter in place” means to go indoors, close all doors and windows, turn off fans, air conditioners, and forced-air heating units that bring fresh air from the outside (only air inside the building/residence should be recirculated). Keep a radio turned to the emergency response network or local news stations to get updated information. Remain indoors until advised that the event is over. After the air has cleared, limit direct contact with visibly-impacted surfaces.
Are there exposure standards or guidelines for FCC catalyst designed to protect my health? While no exposure standards have been established or guidelines published specifically for FCC catalyst, exposure guidelines for individual compounds that may be present have been derived by various health authorities. Testing can be performed to determine the levels of these individual compounds in air and on surfaces. In recent FCC release incidents, testing in the surrounding community generally showed post-incident levels were consistent with background levels, and no long-term impacts to human health or the environment were observed.[142]
According to an article in the Royal Society of Chemists published on September 18, 2015 titled "Fluid catalytic cracking: recent developments on the grand old lady of zeolite catalysis," by Eelco Vogt and Bert Weckhuysen, "it is estimated that ∼2300 metric tons of FCC catalyst are produced per day,2 or ∼840[thin space (1/6-em)]000 metric tons per year. This implies that, on average, approximately 0.16 kg of FCC catalysts are used for the conversion of a barrel of feedstock. This equals about 0.35 lbs per bbl, in units more conventionally used in the field, making use of vacuum gas oil (VGO). Heavier feedstocks, such as resid, require more catalyst material (0.4 lbs per bbl) while lighter feedstocks, such as heavy gas oil (HGO), require less catalyst (∼0.15 lbs per bbl).2 The leading worldwide FCC catalyst producers are W. R. Grace, Albemarle and BASF, while local producers like CCIC in Japan and Sinopec and Petrochina in China have smaller market shares."[143]
May 3, 2019: Phillips 66 Rodeo Refinery Fined Again for Polluting San Pablo Bay
KQED reported on May 3, 2019 that California state water regulators announced that Phillips 66 will pay $80,000 for violating chlorine limits in water it released from Rodeo Refinery into the bay more than a dozen times over a five-month period last year. Water regulators documented 16 instances during eight days between last July and November when chlorine was released from the facility, according to the San Francisco Bay Regional Water Quality Control Board's proposed settlement. "Phillips 66 has a history of violations," the board wrote in this week's proposed settlement.
"Chlorine is a problem for aquatic life. We need to control the chlorine concentrations that are discharged in order to keep the fish and other aquatic life protected," said Bill Johnson, who heads the board's division that focuses on enforcement and pollution reduction, adding that his agency did not see any dead fish in the area because of the releases. The board found that company crews did not address the root cause of the violations. Investigators found that the refinery did an "insufficient" job of mixing in bisulfite into the water to remove chlorine from its discharges.[144]
May 2, 2019: Fire Crews Battle Blaze at Phillips 66 Refinery in Carson
KTLA reported on May 2, 2019 that fire crews were called to a blaze at the Phillips 66 oil refinery in Carson on May 2, 2019. Smoke could be seen billowing from the Phillips 66 refinery facility at Sepulveda Boulevard and Alameda Street around 5 p.m. Firefighters declared the flames extinguished shortly before 7:20 p.m., Los Angeles County Fire Department officials said. No injuries were reported, officials said. Air quality measurements taken Thursday afternoon were normal, but authorities planned to continue to monitor readings.[145]
May 1, 2019: Mulva family to donate $50 million for 'world-class' cultural center in De Pere, Wisconsin
The Green Bay Pres Gazette reported on May 1, 2019 that former ConocoPhillips CEO Jim Mulva and his foundation will donate $50 million to create the Mulva Cultural Center, a glass-encased showroom for traveling cultural exhibits and activities in 60,000 square feet of space that will serve, in the words of architect Scott Duncan, “as De Pere’s living room.” “Nothing that we’re doing with this center is dependent on financial support either by sponsors or by the city,” Jim Mulva said. “For people to attend and see the exhibits will be essentially no or nominal costs.” The Mulvas envision hosting traveling exhibits about dinosaurs, 101 inventions that changed the world, the Titanic, the Civil War, antique cars shows and other exhibits like those they’ve seen in New York, or that have visited Minneapolis, Milwaukee and Chicago.
De Pere Mayor Mike Walsh called it a world-class project that he predicted would “both inspire and transform our region culturally and artistically for generations to come.” Such a project will only enhance what is being done at other cultural attractions throughout the county, such as the Neville Museum, Brown County Executive Troy Streckenbach said. “It’s a game changer for the city of De Pere, a game changer for Northeastern Wisconsin,” Streckenbach said.
He and Walsh had high praise for the Mulvas, who spent their formative years in De Pere before moving to Texas, where Jim Mulva made his fortune as president and CEO of ConocoPhillips. Upon his retirement four years ago, they returned to De Pere, where they built a home. “Your roots do pull on you,” Jim Mulva said. This project is a way of giving back to the community, he and Miriam said. The building remains very much in the planning stages. The Mulvas intend to present the city with a formal, detailed plan a year from now, with construction to begin in the spring and summer of 2020. The building would become operational in 2022.[146]
April 24, 2019: Typical Worker's Pay Nears $200,000 at Phillips 66
The Wall Street Journal reported on April 24, 2019 that Oil-and-gas drillers and refiners had some of the highest-paid median workers in the energy and utility sectors in 2018, according to The Wall Street Journal analysis of annual pay disclosures for hundreds of big U.S. companies. Phillips 66 paid its median worker $196,407, the highest of any company in the sector. Phillips 66 both boosted its 2018 median pay by about 15% in 2018 compared with 2017. Exxon raised its median pay about 6%. Most publicly traded firms are disclosing their median employee pay for a second straight year, along with compensation for top executives.
Data reflect disclosures by companies in the S&P 500 and many companies in the S&P 400 and S&P 600 indexes for fiscal years ending after June 30, 2018, and disclosed in securities filings through April 23, 2019. Federal regulations require companies to disclose the total compensation of their median employee starting with the first fiscal year that began after Jan. 1, 2017. The same regulations require companies to calculate the median employee's total compensation with the same method used to determine total pay for chief executives. However, companies have substantial discretion regarding the types of pay used to identify their median employees. Companies are grouped with the primary industry sector and industry group assigned to them by S&P Global Market Intelligence. For this article, utilities and energy sectors have been combined.[147]
April 23, 2019: Environmental Groups Says with No Emergency Plan, Phillips 66 Funded Bayou Bridge Pipeline Violates Permit
The New Orleans Times-Picayune reported on April 23, 2019 that theAtchafalaya Basinkeeper environmental group says the pipeline began operating on April 1 without having an approved emergency response plan. The state Department of Natural Resources said it would investigate the complaint, but said the pipeline’s operation falls under federal law, and the federal Pipeline and Hazardous Materials Safety Administration say the pipeline is complying with federal regulations. The pipeline is operated by Houston-based Energy Transfer Partners, its majority owner. Phillips 66 Partners owns 40 percent of the pipeline.
The Basinkeeper complaint pointed out that the federal pipeline agency had informed it on April 11 that Bayou Bridge had not yet submitted the response plan. But in an April 16 letter submitted as part of motions on behalf of DNR in a state Supreme Court case involving the pipeline, a PHMSA official said that Energy Transfer Partners had submitted a similar “Integrated Contingency Plan” that includes the 162-mile Bayou Bridge segment, but that PHMSA had not yet approved that plan.
A spokeswoman for Energy Transfer, in a Friday response to questions, dismissed the Basinkeeper complaint. “There is no validity to these allegations,” said Alexis Daniel. “The Bayou Bridge pipeline has been safely transporting crude oil since April 1.”[148]
March 15, 2019: Massive Fire Erupts at Phillips 66 Oil Refinery in Carson
KTLA reported on March 15 that a large fire broke out at the Phillips 66 oil refinery in Carson. At least three pumps at the facility were involved in the fire, authorities said. Authorities shut down Sepulveda Boulevard between Alameda Street and Wilmington Avenue as firefighters continued dumping water on the flames Friday night, sheriff's officials said. The flames were declared out about 9:30 p.m., according to Los Angeles County Fire Department Capt. Tony Imbrenda. Private refinery firefighters, Los Angeles County firefighters and the Long Beach Fire Department joined in the effort, officials said. Experts were monitoring the air quality, but Los Angeles County Sheriff's Department officials said there were no signs of a hazard.[149]
February 6, 2019: Trade Secrets Worth $1 Billion Stolen from Phillips 66 Bartlesville Facility
Clearance Jobs reported on February 6, 2019 that Hongjin Tan, a “materials scientist” who resigned in early December from the Disruptive Technologies team at Phillips 66 Research Center in Bartlesville, OK, where he was working on large-scale energy storage projects, stole trade secrets from Phillips 66 with a value greater than $1 billion. A criminal complaint filed by the U.S. Department of Justice describes how Hongjin Tan stole hundreds of files, including files related to the $1 billion product. These files would have permitted the manufacture of Phillips 66 unidentified product, but believed to be associated with large-scale battery technology.
The day after Tan’s resignation in early-December, Phillips 66 contacted the FBI after a review of their internal computer system where they found that he had copied hundreds of files, as described in the complaint. This was the company’s insider threat program/protocol at work, paying dividends. Tan had told his employer he was returning to China in a few weeks to care for his parents. The FBI investigators allege that Hongjin Tan stole the documents to take with him to China, where he had lined up his next “opportunity.” Tan was offered the position of Energy New Material Engineering Center Director in Xiamen, contingent upon his “guarantee that the information you have already provided and will provide is real and effective.” Tan was arrested December 20, 2018, when a subsequent search of his residence uncovered a thumb drive containing the Phillips 66 files. On December 29, Tan was ordered held without bail given he was a significant flight risk. Tan has not yet been formally charged with a crime. One may expect that he will be indicted on charges associated with theft of trade secrets and perhaps economic espionage.[150]
January 12, 2019: Phillips 66 grant enables Ferndale Clubhouse to launch STEM program
My Ferndale News reported on January 12, 2019 that the Boys & Girls Clubs of Whatcom County (BGCWC) announced this week they have received a $265,000 grant from Phillips 66 to be used toward an organization-wide program to provide science, technology, engineering and mathematics (STEM) equipment and educational programs.[151]
January 6, 2019: Tulsa Judge Finds Evidence Chinese National Stole Trade Secrets from Phillips 66 in Bartlesville
NewsOK reported on January 6, 2019 that U.S. Magistrate Jodi Jayne found following a preliminary hearing in Tulsa federal court that there was probable cause to believe Hongjin Tan, a legal U.S. resident and Chinese national, had stolen trade secrets from Phillips 66 while employed in Bartlesville. The 35-year-old Bartlesville resident has been jailed without bail since the FBI arrested him Dec. 20 on a theft of trade secrets criminal complaint.
An arrest affidavit alleges that Tan took restricted files containing battery-related technology that has earned Phillips 66 an estimated $1.4 billion to $1.8 billion in sales for an undisclosed product. The company planned to market the product in China and in cellphone and lithium-based battery systems, according to the affidavit. Evidence presented during the preliminary hearing and in the arrest affidavit outlined how federal agents found a document on Tan’s laptop computer, via a search warrant, that purported to be a job offer from a Phillips 66 competitor at a state-owned company in Xiamen, China.[152]
January 3, 2019: Phillips 66 Donates $40,000 to Kay County Sheriff's Department
The Ponca City News reported on January 3, 2019 that the Kay County Sheriff’s Department recently received a $40,000 grant from Phillips 66 to update their radio equipment. “The Kay County Sheriff’s Department requested a donation from Phillips 66 Ponca City to upgrade our outdated radio system. We received the $40,000 grant which will allow us to purchase and install hand-held radios equipped with earpieces and microphones, in-car radios and accessories, dispatch upgrades that will be the gateway for additional radio channels, Motorola upgrades and other accessories,” said Sheriff Steve Kelley. This new equipment will enhance communication across the county. Kelley said county officials recently added a repeater and second antenna. The antenna helps to ensure that the repeater does not loose signal and contact between car or portable radios that enforcement officers use.[153]
December 23, 2018: Oil Tankers May Carry Harmful Tar Sands Through San Francisco Bay to Phillips 66 Oil Terminal
KPIX Channel 6 reported on December 23, 2018 that oil tanker traffic through the the San Fransisco Bay Area is on target to get heavier and potentially riskier as Phillips 66 wants to expand their marine terminal to more than double tanker traffic, from 59 to 135 ships a year. The most recent spill in 2016 sent dozens of East Bay residents to the hospital. Public records show Phillips 66 has been fined by the air district more than a dozen times each year for emissions violations. Yet the Phillips 66 refinery recently received approval to process an additional 4,000 barrels of crude a day. “Not only is there no spill response plan for a tar sands spill … there have been two spills at that marine terminal,” said Nancy Reiser. “The money that goes to operate the Bay Area Air Quality Management District comes from permits to increase production so with every permit they grant they get more money."
KPIX 5 asked Pam Leong, in charge of issuing permits to Bay Area refineries why a refinery with such a lengthy history of emissions violations would be allowed to expand. Leong’s response: “Regulations are specified in the rules. If they meet those regulations they are allowed to get their permit by law.” Phillips 66 turned down KPIX request for an interview, but in a statement said the marine terminal application is not related to, nor reliant upon, any other recent or future projects at the refinery.[154]
December 12, 2018: Phillips 66 Donates $85,000 to Ponca City University Center
The Ponca City News reported on December 12, 2018 that Phillips 66 has announced a grant to fund programs that will further science, technology, engineering, and mathematics (STEM) opportunities — helping to foster the next generation of innovators in Ponca City. “Phillips 66 supports STEM education and views this program at the University Center as an opportunity to make a difference in the lives of students, not only in Ponca City, but the surrounding area,” said Darin Fields, Phillips 66 Ponca City Refinery Manger. “We look forward to the Create Lab challenging students and encouraging them to take more STEM classes in their respective schools and realize that they can have fun with science, technology, engineering and math.”[155]
September 10, 2018: Construction of Phillips 66 Financed Bayou Bridge Pipeline Halted by Property Rights Challenge
The New Orleans Times-Picayne reported on September 10, 2018 that a legal challenge from Atchafalaya River Basin landowners and environmental groups has temporarily halted construction of the controversial Bayou Bridge Pipeline, financed in part by Phillips 66. The injunction was filed in July after members of the Atchafalaya Basinkeeper, a preservation group, noticed pipeline workers cutting trees and digging trenches on a 38-acre marshland in St. Mary. The property's owners had not granted access to the property and opposed the pipeline's construction through the basin, which contains one of the largest swamps in North America.
Energy Transfer Partners contends it has the right to build on private property through expropriation, a process similar to eminent domain that allows private companies to take property for public benefit. Under the agreement reached Monday, Energy Transfer Partners agreed not to enter the property until it completes the expropriation process, Alexis Daniel, a spokeswoman for the company said. Groups opposed to the pipeline say the agreement freezes construction until at least late November, when another hearing is scheduled with a judge in Louisiana's 16th Judicial District Court. Energy Transfer Partners had planned to complete the pipeline in October. Now the company is aiming to finish by the year's end. "This represents a significant victory for the conservation of the Atchafalaya Basin and for the rights of private landowners who lawfully resist their property being seized for private gain," said property owner Peter Aaslestad.[156]
September 4, 2018: Climate Activists Protest Tar Sands Refining at Phillips 66 Rodeo Refinery Without Proper Review
SF Bay Area Indymedia reported on September 4, 2018 that climate and environmental justice advocates say local air regulators mandated to protect air quality and the climate are taking significant steps to allow increased tar sands refining and creeping refinery emissions from Phillips 66 Rodeo Refinery. A recent public records request reveals that BAAQMD staff issued an administrative permit on August 16, 2018 to increase production capacity at the Phillips 66 refinery by 61.3 million gallons per year.
“This permit allows for increased heavy oil processing, or hydrocracking, at the Rodeo facility, and will enable the refiner to process the increased amounts of Canadian tar sands oil it proposes to bring in across San Francisco Bay via nearly tripled oil tanker traffic in a wharf expansion project,” the groups said. “This small but highly significant step actually allows Phillips 66 to begin implementing its goal of switching its San Francisco Refinery over to tar sands. The Rodeo refinery is connected to its sister refinery in Santa Maria by pipeline; together they make up the larger San Francisco Refinery. Two years ago, multi-community protest shut down a Phillips 66 proposal to increase tar sands deliveries by oil train to the Santa Maria facility,” the groups said. "The company is trying to sneak its expansion past regulators and the public by pretending each little increase is unconnected, but we aren't fooled,” said Sejal Choksi-Chugh, Executive Director of San Francisco Baykeeper regarding the permit.
"Tar sands bitumen is the most carbon-intensive, hazardous and polluting major oil resource on the planet to extract, transport, and refine. Despite this, the Air District staff is intentionally bypassing California Environmental Quality Act (CEQA) review and refusing to evaluate the climate impacts of its permit, which opens the gates to increased tar sands refining,” the groups said.
The groups said the permit was issued without any public review or notice while Chief Air Pollution Control Officer Jack Broadbent was meeting with First Nations representatives and touring tar sands mining sites in Alberta, Canada. Pennie Opal Plant of Idle No More SF Bay said, “It is wildly irresponsible for Phillips 66 to add to the problems that are causing sick refinery communities and the climate disruption impacting us in California and around the world. Phillips’ expansion proposal must be stopped and the Bay Area Air Quality Management District is the agency to stop it.”[157]
August 20, 2018: Phillips 66 Agrees to Settle Alleged Violations of the Clean Air Act at Wood River Refinery
Greenwire reported on August 20, 2018 that Phillips 66 Co. would pay a $475,000 fine and spend some $500,000 on a lead paint abatement project as part of a tentative deal to settle alleged violations of the Clean Air Act and two other major federal laws at its Wood River Refinery in southwestern Illinois, according to a proposed consent decree recently lodged with a federal court.[158]
The suit alleged the Wood River refinery has leaking valves and pumps that caused excess emissions of dangerous chemicals. In large amounts, some of the compounds released by the refinery can reduce lung function and irritate the human respiratory system, according to the suit. The lawsuit includes documents from a 2014 inspection that reportedly revealed hydrocarbon emissions escaping from three vents and 17 seams on the roof. Part of the vents were deteriorated and the seams were not monitored. Benzene, a chemical that is a natural part of oil and gasoline smoke and also found in volcanoes and forest fires, was reportedly leaking from 14 locations on-site, according to a follow-up inspection in 2014 included in the lawsuit. According to the settlement, the refinery will make $10.8 million worth of changes to the facility to comply with federal and state standards.[159]
August 14, 2018: Phillips 66 Financed Pipeline Has Almost Unlimited Powers of Eminent Domain in Louisiana
Vice News reported on August 14, 2018 that Phillips 66 financed Bayou Bridge Pipeline, is causing major headaches for homeowners along the route because not everyone wants it crossing their backyard. In Louisiana, oil pipeline companies have almost unlimited powers of eminent domain, meaning they can take private property in court when landowners refuse to sell. And Energy Transfer Partners and Phillips 66, the companies behind Bayou Bridge, hasn’t been shy about using this right along the pipeline’s 163-mile route.
Unlike gas pipelines, which are federally regulated by FERC, oil pipelines that don’t cross state lines are regulated by the states themselves. In Louisiana, the law automatically gives oil pipelines the right to use eminent domain, and the Public Service Commission doesn’t get involved. Anne Rolfes, executive director of environmental group the Louisiana Bucket Brigade, said property owners ultimately have no option to object to a pipeline crossing their land. “We've realized that there isn't any oversight and that the state isn't carrying out its function regarding eminent domain,” said Rolfes. “I think it's an issue on which really conservative lawmakers are quite concerned because it's about companies seizing private property.”[160]
August 12, 2018: Phillips 66 Lays Off Employees in Bartlesville and Houston
The Bartlesville Examiner-Enterprise reported on August 12, 2018 that workforce reductions have occurred this year in Bartlesville and Houston. “Phillips 66 can confirm that workforce reductions have taken place as part of our business transformation program,” said Phillips 66 spokesman Dennis Nuss. “Fewer than 100 employees overall were impacted. Most of the affected employees were at our Houston or Bartlesville locations. We do not anticipate any further planned reductions in 2018.”
Phillips 66′s employs approximately 2,000 people in Bartlesville and 14,000 employees globally. Garland said the community should be prepared for additional changes. Some of the reductions, Garland said, will be dealt with through natural attrition. “It’s probably premature for me to say what the number is going to be, but it will be a number that will move over time as we think about it,” Garland said on July 24. “I also mentioned we’re running like twice the attrition rates we would normally run. Part of that is a great economy and people being able to go to work. Partly it is from people choosing to retire, but when we are running the attrition rates we are running, that really mitigates the amount of people.”
“As we go through [2018, 2019 and 2020], this is a journey that we are on with no definitive end-point for us,” Garland said. “I think the world will always continue to change, but the important thing for us is that we are trying to set the company up to be successful for the next 100 years.” Even with the changes in job functions and responsibilities, Garland said Phillips 66 is committed to Bartlesville and the overall health of the company’s presence in the area.[161]
July 7, 2018: Phillips 66 Shuts Down Alliance Refinery to Recover Body of Refinery Worker Killed in Accident
The New Orleans Times-Picayune reported on July 7, 2018 that Jerome Matthews, a refinery worker at the Phillips 66 Alliance Refinery near Belle Chasse, died this week in an accident at the refinery, and emergency personnel retrieved the body Saturday evening (July 7) following a shutdown of the facility. Floyd Young, who worked with Matthews for refinery contractor HydroChemPSC, described what took place to Fox 8. "He was working the night shift. There were three of us. It was very slippery and nasty on top of the tower where we were working, and he was grabbing the hose and he slipped and fell into the coolant tower," Young said.
Phillips 66 spokesman Dennis Nuss said said the incident happened around 9:30 p.m. Wednesday and involved an employee of HydroChemPSC who was working in a basin of the refinery's primary cooling tower. Matthews was seen falling into the water basin, which is about 15 feet deep. Attempts to recover Matthews' body were unsuccessful, and a deliberate shutdown of the refinery began in order to allow emergency responders safe access to the basin. The shutdown process takes at least 48 hours in order to assure safe access to the cooling tower basin. The shutdown was completed Saturday night, and Matthews' remains were recovered and turned over to the Plaquemines Parish coroner, according to Phillips 66.
The company said it is investigating to determine what caused the accident. The Occupational Safety and Health Administration is involved in the investigation of the accident. Jerome Matthews left behind a wife and two children. He had only worked a few months for HydroChemPSC but had several years of experience. "If he knew he was in a situation that could cost him his life, he wouldn't of stayed in that type of environment," Matthews' widow Racquel told Fox 8.[162]
July 4, 2018: Worker Dies in Accident at Phillips 66 Alliance Refinery
The New Orleans Times-Picayune reported on July 7, 2018 that a refinery worker was killed in an accident at the Phillips 66 Alliance Refinery near Belle Chasse on July 4, 2018. Phillips 66 spokesman Dennis Nuss said said the incident happened around 9:30 p.m. Wednesday and involved an employee of HydroChemPSC who was working in a basin of the refinery's primary cooling tower. The worker, who was not identified, was seen falling into the water basin, which is about 15 feet deep.[163]
June 28, 2018: Phillips 66 Awards $1.5 Billion Contract for Fractionator Plant at Sweeney
Global Construction reported on June 28, 2018 that Philipps 66 has awarded an EPC contract to local firm S & B Engineers and Constructors for the development of two new gas fractionation plants at its site in Texas. Part of a wider expansion project costing around $1.5bn, the work will result in a 300,000 barrel per day (BPD) expansion in capacity and is set to create 2,000 jobs during the construction phase. Phillips 66 will also add storage capacity and pipeline infrastructure to support the new capacity at its Sweeny Hub in Old Ocean.
The project is expected to complete in 2020, brining total capacity up to 400,000 BPD with 15mn barrels of storage capacity. Once operational, 25 new permanent positions will be created. Greg Garland, chairman and CEO of Phillips 66, said earlier this month when the project was announced: “The Sweeny Hub is strategically positioned to provide fractionation capacity for rapidly growing Permian Basin NGL production and access to US Gulf Coast petrochemical, fuels and LPG export markets.”[164]
June 20, 2018: Phillips 66 Worker Allegedly Exposed to Asbestos at Borger Refinery in '50s, Estate Files Lawsuit
The SE Texas recorded reported on June 20, 2018 that from 1955 to 1979, the late Gerald Sullivan worked at Phillips Petroleum at its Borger facility, where he was allegedly exposed to asbestos. According to a lawsuit, Gerald worked as an insulator where he used and was exposed to toxic materials, including asbestos dust and fibers. As a result, he developed mesothelioma, an asbestos-related illness, and “died a painful and terrible death” on Jan. 4, 2017. Seeking exemplary damages, Dennis Sullivan, representing Gerald’s estate, filled suit against Phillips 66 on June 13 in Jefferson County District Court. The suit alleges Phillips knew about the dangers of asbestos but still allowed workers to work with asbestos products without warning or implementing proper safety measures. The plaintiff asserts Phillips acted with malice, entitling him to exemplary damages.[165]
June 13, 2018: Phillips 66 to Expand Sweeny Hub with 300,000 BPD of New Fractionation Capacity
AP reported on June 13, 2018 that Phillips 66 announced it is proceeding with an expansion of the company’s Sweeny Hub incuding the construction of two 150,000 barrel-per-day (BPD) natural gas liquids (NGL) fractionators in Old Ocean, Texas, additional NGL storage capacity, and associated pipeline infrastructure. The project is expected to cost up to $1.5 billion and begin commercial operations in late 2020. “We are pleased to move forward with the Sweeny Hub expansion, a key part of our Midstream growth strategy that further optimizes our integrated NGL value chain,” said Greg Garland, chairman and CEO of Phillips 66. “The Sweeny Hub is strategically positioned to provide fractionation capacity for rapidly growing Permian Basin NGL production and access to U.S. Gulf Coast petrochemical, fuels and LPG export markets.”[166]
May 24, 2018: Protesters Arrested at Work Site of Phillips 66 Funded Bayou Bridge Pipeline
The New Orleans Times-Picayune reported on May 24, 2018 that two protesters were arrested at a Bayou Bridge Pipeline work site in St. James Parish on May 2, 2018 after about 20 protesters participated in blocking construction in response to the state's decision to appeal a judge's ruling against the pipeline. "St. James residents haven't been listened to," Alicia Cooke, one of the two women arrested, said in a statement. "We've been fighting this pipeline on every level through every legal means for over a year. I'm not sure how many more ways Louisianans can say we don't want this or need this." Protesters from the Louisiana Bucket Brigade, 350 New Orleans and other groups have been monitoring construction and reporting suspected permit violations. Blocking bulldozers and other heavy equipment on Thursday was an attempt to "enforce the law that (DNR) is failing to enforce," the Bucket Brigade said in a statement.
A spokeswoman for Texas-based Energy Transfer Partners, which is building the pipeline jointly with Phillips 66, said work is being done according to state- and federally-approved permits. "Our construction activities have been and will continue to adhere to the stipulations of our permits," Energy Transfer's Alexis Daniel said in an email. "Our commitment to the safe construction and operation of this pipeline remains unchanged."[167]
May 22, 2018: Construction of Phillips 66 Funded Bayou Bridge Pipeline Continues in Defiance of Judge
Courthouse News reported on May 22, 2018 that construction of the Bayou Bridge Pipeline through sensitive coastal lands continued despite a state judge’s ruling that the Louisiana Department of Natural Resources illegally issued a permit for it. The Bayou Bridge Pipeline is jointly owned by Energy Transfer Partners, which merged with Sunoco in 2012, and Phillips 66. State Judge Alvin Turner Jr., of the 23rd Judicial District Court in St. James Parish, ruled April 30 that the permit for construction through a coastal zone violated state law. On May 15, Judge Turner reiterated that construction through the zone must stop. In siding with plaintiffs, including HELP St. James, Gulf Coast Restoration Network, The Atchafalaya Basinkeeper and BOLD Louisiana, Judge Turner found that the department did not apply state-mandated guidelines that direct the activities of companies involved in oil and gas, a fact he called “troubling.” Turner found that construction of the pipeline will leave St. James residents without an emergency and evacuation route in the event of a chemical spill. And a chemical spill, according to statistics, is likely.
Anne Rolfes, founding director of the Louisiana Bucket Brigade, said the Department of Natural Resources is turning a blind eye to environmental violations while another state agency is trying desperately to save the coast. “The state is speaking out of both sides of its mouth,” Rolfes said later in an email. “On the one hand pouring hundreds of millions of dollars into a coastal zone program, and yet looking the other way as Bayou Bridge Pipeline LLC digs up and destroys [the coast]. The Department of Natural Resources is giving Bayou Bridge a pass to damage the coastal zone and suffer no consequences.”[168]
May 17, 2018: Pay for Phillips 66 CEO Greg Garland Towers Over Median Salary of Workers
The Houston Chronicle reported on May 17, 2018 that data released by U.S. companies for the first time this year highlights the wide gaps between the pay of CEOs middle-of-the road workers, a gap that has ballooned in recent decades as executive compensation packages have grown richer and workers’ earnings have largely stagnated. Phillips 66, Houston’s biggest publicly traded company, reported CEO Greg Garland’s total compensation at $23.8 million and its median worker was paid $170,988, a 138-to-1 ratio. At U.S. oil refiner Marathon Petroleum, an Ohio company with two refineries and offices in Houston, CEO Gary Heminger made $19.7 million in 2017, compared with the median employee’s $21,034, a 935-to-1 ratio.
Consultants said the increased transparency around worker pay could lead to uncomfortable conversations with employees who make salaries below the median. Ramesh Anand, president of American Personnel Resources and a recruiter in Houston, said if people suddenly realize they’re being underpaid by some 25 percent or that there’s a major difference between salaries at their competitors, they may just decide to move on. “If you come in on the low side and you want to get the best people, you might need to rethink your pay scales,” said Brian Youngberg, an oil company analyst at Edward Jones in St. Louis. “It makes everyone think about it.”[169]
May 15, 2018: Phillips 66 Pays $100,000 For Air Quality Violations at Rodeo Refinery
The San Fransisco Examiner reported on May 15, 2018 that Phillips 66 has agreed to pay nearly $100,000 to settle air quality violations at its Rodeo Refinery settling a group of 13 notices for violations that occurred in 2015. The notices addressed brief violations of emissions limits, venting of odorous gases that did not result in a public nuisance, a failed accuracy test of a monitoring system and violations of a leak detection and repair program or minor administrative violations. All the violations have been corrected, the district said.[170]
May 10, 2018: Phillips 66 Increases Quarterly Dividend to 80 Cents
Bartlesville Radio reported on May 10, 2018 that the board of directors of Phillips 66 has declared a quarterly dividend of 80 cents per share on Phillips 66 common stock, an increase of 14 percent.[171]
May 7, 2018: Judge Rules Permit for Phillips 66 Funded Bayou Bridge Pipeline is Illegal
The New Orleans Times Picayune reported on May 7, 2018 that the Louisiana state Department of Natural Resources violated provisions of a state law designed to protect the public and environment in issuing a coastal use permit for construction of the controversial Bayou Bridge Pipeline, and the permit must be reconsidered, according to a state district court judge in St. James Parish. The state agency overseeing the pipeline permit eliminated state-required environmental and safety protections for neighborhoods in St. James Parish and coastal areas that the pipeline will pass through by improperly applying provisions of the state's Coastal Zone Management Act, 23rd Judicial District Court Judge Alvin Turner Jr. ruled in his April 26 decision, made public Monday (May 7).
"We do not typically comment on pending or current litigation," said Energy Transfer Partners spokeswoman Vicki Granado. "We would like to reiterate, however, that we will continue to follow all of the stipulations of our permits, as we have always done."
Two St. James residents among those filing the suit praised the ruling in a press release announcing the decision. "It seems like the state agency didn't think too much about the people who live here when it was giving Bayou Bridge this permit, and neither did Bayou Bridge," said Harry Joseph Sr., pastor of Mount Triumph Baptist Church in St. James. "So we went to court, to somebody who we felt would listen to us, and he did." "Here in St. James, we are in desperate need for an evacuation plan that will allow us to get out fast when something spills or explodes," said Genevieve Butler, a St. James resident. "More facilities keep coming, and each one puts us at more risk, but none of them want to do anything about our situation. Well, now Bayou Bridge has to step up. I hope all the others see this ruling as a sign that they have to give our community the protection we deserve."
Elizabeth Livingston de Calderon, a supervising attorney with the Tulane Environmental Law Clinic representing environmental and community groups that filed suit challenging the permit, said the ruling will require construction to stop on the 162-mile pipeline until DNR reconsiders the permit, once a formal judgment is issued in the case, which could take another week or so.[172]
April 30, 2018: Marathon Buys Andeavor in Biggest Oil Refining Deal in History Passing Phillip 66 as Largest Independent Oil Refiner
Bloomberg reported on April 30, 2018 that Marathon Petroleum has agreed to buy rival Andeavor for $23.3 billion in the biggest-ever deal for an oil refiner creating the largest independent fuel maker in the U.S. “Why wouldn’t you do this deal?” said Greg Goff, Andeavor’s chief executive officer. “The time is right now, because for this industry, the wind is behind our backs.” Marathon is focused in the Midwest and Gulf Coast, while Andeavor concentrates on the western U.S., including refineries and pipelines it acquired in last year’s merger with Western Refining Inc.
The combination, which will use the name Marathon, would overtake Valero Energy Corp. as the biggest in U.S.-based oil refiner by capacity, generating about 16 percent of the nation’s total, according to Bloomberg calculations. The combined company would pass Phillips 66, valued at $51.9 billion, as the largest U.S. independent refiner by market capitalization. The combined entity expects to be well-positioned to capitalize from upcoming regulations to reduce pollution from ships. Andeavor’s port assets in California, coupled with Marathon’s in the U.S. Gulf Coast, will give the combined company the ability to sell lower-sulfur ship fuel.[173]
Chemical Online reported on April 27, 2018 that Phillips 66 announced first-quarter 2018 earnings of $524 million and adjusted earnings of $512 million. This compares with fourth-quarter 2017 earnings of $3.2 billion and adjusted earnings of $548 million. Fourth-quarter 2017 earnings included a $2.7 billion benefit from U.S. tax reform. “We had a strong start to the year," said Greg Garland, chairman and CEO of Phillips 66. "We delivered solid earnings, operated well, advanced strategic initiatives, and continued rewarding our shareholders with significant distributions. Our earnings reflect the benefit of our diversified portfolio, and we are also seeing positive, ongoing impacts from U.S. tax reform. CPChem has fully recovered from Hurricane Harvey and contributed strong results in the quarter, while successfully starting up its new world-scale ethane cracker. We recently completed yield-enhancing projects at the Bayway and Wood River refineries, and successfully executed major turnarounds at multiple refineries.”
“Building on our strong record of rewarding our shareholders, we distributed $3.8 billion through share repurchases and dividends during the quarter," Garland continued. "We repurchased over 37 million of our shares, representing a 7 percent reduction in shares outstanding during the quarter. Since our company’s formation in 2012, we have returned over $20 billion to shareholders through dividends, share repurchases and share exchanges.”[174]
April 25, 2018: Phillips 66 Issues all Clear After Gas Leak at Borger Refinery
The Borger News-Herald reported on April 25, 2018 that people in the downwind area around Borgerm ay notice a pungent or irritating smell from the Phillips 66 Refinery but that there is no cause for concern with the public. "The smell alone is not a cause for concern," says an official source. "If anything rises to a level to become an issue to the public, we will post updates. During these types of incidents it is not uncommon for rumors and speculation to begin. This will be the official source for information regarding this situation. Please monitor our page for any updates."[175] The all-clear has been given by officials at the Phillips 66 plant regarding the incident.Officials say at no time during the monitoring were any levels detected to indicate a concern for the public.[176]
April 21, 2018: Phillips 66 Working to Provide Fuel for Lubbock, Amarillo After Maintenance Issue at Borger Refinery
Lubbock Online reported on April 21, 2018 that Phillips 66 is working to provide alternate fuel supplies to the Lubbock and Amarillo areas in response to possible shortages caused by a “maintenance” issue at its Borger Refinery in the Panhandle. “Due to maintenance at the Borger Refinery, fuels production from the refinery is currently less than during ordinary operations,” spokesman Joe Gannon said in a statement. “Phillips 66 is working diligently to provide gasoline and diesel fuel in the Amarillo, Lubbock and Albuquerque areas. To address any shortages in our fuel supply, we are working with our contracted customers to provide alternate supply via other Phillips 66 refineries, exchanges, and third-party purchases and by utilizing backup terminal locations where possible. Gannon declined to elaborate on the nature of the maintenance issue experienced at the Borger refinery, but said any possible shortages from the issue should be “short term” and “isolated.” “It should be resolved fairly quickly,” he said, but added “we don’t have a timeline.”[177]
April 17, 2018: Towering Flareup from Phillips 66 Ferndale Refinery Seen from Miles Around
KGMI reported on April 17, 2018 that a flaring event at the Phillips 66 Refinery in Ferndale had some neighbors concerned as a power disruption caused the facility’s safety system to activate to place all refinery units in a safe state causing the flare-up and loud noises that accompanied it. The refinery's Public Affairs Director, Josh Summers says there were no injuries or shelter in place calls and air monitoring found no off-site impacts.[178]
April 10, 2018: Phillips 66 Funds Stem Summer Camps for 100 Bartlesville Middle School Students
Bartlesville Radio reported on April 10, 2018 that thanks to a grant from Phillips 66, Rogers State University's summer STEM and Career Exploring Opportunities Camp will provide a five-day camp for 100 Bartlesville area students who will be starting 9th grade this fall with indoor and outdoor interactive activities designed to teach new STEM competencies and explore STEM career opportunities. Technology Vice-President for Phillips 66, Ann Oglesby says the company hopes the camp will encourage local students to pursue further education and careers in STEM disciplines. She goes on to say the ultimate goal is to inspire the students to one day generate solutions to new challenges and technological innovations in business.[179]
April 9, 2018: Phillips 66 Borger Refinery Restarting Units after Two Month Turnaround
The BOE Report reported on April 9, 2018 that Phillips 66 is continuing to restart units at its Borger Refinery as it wraps up a planned two-month, plantwide turnaround, said sources familiar with plant operations. The refinery restarted a coking unit and a reformer over the weekend, the sources said. All units shut during the plantwide overhaul begun inmid-February were expected to be back to normal operations thisweek, the sources said. Phillips 66 spokesman Dennis Nuss confirmed that planned maintenance was under way at the refinery, but declined to say which units were involved or when the work would be completed.[180]
April 5, 2018: Phillips 66 CEO Greg Garland is 16th Highest Paid CEO in US
24/7 Wall Strteet reported on April 5, 2018 that Phillips 66 CEO Greg Garland is the 16th highest paid CEO in the US. Garland received 23.7 million in total compensation in 2017. To identify the highest paid CEOs at America’s 100 largest companies, 24/7 Wall St. reviewed total CEO compensation at each of the 100 public companies with the highest reported revenue in fiscal 2016. All compensation figures are as of the last published proxy statement.[181]
April 5, 2018: Protesters Block Phillips 66 Funded Bayou Bridge Pipeline Construction Supply Site
The Advocate reported on April 5, 2018 that two women from New Orleans dressed up as crawfish and chained themselves inside barrels parked in front of an industrial yard supporting the Bayou Bridge Pipeline, funded in part by Phillips 66, while about 20 protesters blocked access to the industrial yard for more than three hours starting at 6 a.m. About five trucks were trapped inside until the Calcasieu Parish Sheriff’s Office arrived about 9 a.m. All but two — Heurich and Prevost, the crawfish-festooned teachers in the barrels — complied with an order to disperse, said Anne Rolfes, founding director of the Louisiana Bucket Brigade, which organized the protest. The protesters remained at the site but moved a distance away.[182]
April 4, 2018: Phillips 66 Could Suffer from Trump Tariffs Against China
Seeking Alpha reported on April 4, 2018 that according to analysts some 40% of the 106 U.S. products goods under threat of tariffs from China are plastics, petrochemicals, petroleum products and specialty chemicals at a time when the industry is investing heavily in new production. One targeted U.S. export is propane; Phillips 66 is involved in the U.S. propane export business and could be affected. China has been investing in plants that turn propane into propylene, and those facilities have been counting on a steady supply of pure U.S. propane. [183]
According to the NY Times, President Trump’s decision to impose tariffs on imported steel and aluminum has also prompted a stampede by companies pressing for exemptions and exclusions that could be worth billions of dollars in trade. The American Petroleum Institute sent 12 top executives from energy companies including Phillips 66 to lobby Trump and Vice President Mike Pence. The assembled group explained that free trade has been a boon to the industry and stressed the importance of steel to its operations, according to a person briefed on the meeting. The trade group issued a statement saying that its executives “highlighted a host of the industry’s priority issues, including the importance of trade policies that recognize the integrated nature of North American and global markets.”[184]
April 4, 2018: Phillips 66 Westlake Refinery Donates $30,000 to Southwest Louisiana Alliance Foundation
American Press reported on April 4, 2018 that Phillips 66 Lake Charles Manufacturing Complex donated $30,000 to the Southwest Louisiana Alliance Foundation Inc. to be used for a new science, technology, engineering and mathematics program at the College Street Career and Technical Center and the Westlake High School Career and Technical Center to equip 72 Calcasieu students with the skills necessary to be successful in working with computer coding and robotics. “We don’t want to be all one thing in Southwest Louisiana,” said Richard B. Smith, vice president of business and workforce development. Over time and working with even young children, the alliance hopes to create a STEM educational career path that includes computer programming, app and game design and “all the things kids are already doing but aren’t actively being trained in.”[185]
March 29, 2018: Equipment on Phillips 66 Funded Bayou Bridge Pipeline Vandalized
The Advocate reported on March 29, 2018 that vandals cut hydraulic hoses and electrical lines, broke windows and spray painted messages on backhoes and bulldozers on Bayou Bridge construction equipment in Assumption Parish causing estimated damage of at least $50,000 but possibly much more. Deputies are still investigating, though the company has blamed environmental extremists based on some of the spray painting. Company officials declined to say what was spray painted on the construction equipment. "We understand there will always be varying opinions about critical infrastructure projects like the Bayou Bridge Pipeline and we respect the rights of all to peacefully protest, however destruction of equipment is not peaceful," the company wrote in a statement on its social media accounts.
Anne Rolfes, founder of the Louisiana Bucket Brigade and one of the familiar faces at previous demonstrations said vandalism is not a tactic her coalition employs. "I don't know who would've done that. We don't condone that type of damage," she said. At the same time, "I'm not surprised," Rolfes added. Both sides have accused the other of hypocrisy. Pipeline builders argued that damage to equipment or infrastructure can actually harm the environment, though they did not delve into whether that was at issue in the recent case. Rolfes fired back that if Energy Transfer Partners, which owns Bayou Bridge, cares so much about the environment it should bring down the number of spills the company reports.[186]
March 25, 2018: Phillips 66 Research Center Really Contributes to the Culture of Bartlesville
The Pawhuska Journal reported on March 25, 2018 that the Phillips 66 Research Center sits on a sprawling 440-acre campus that is home to Ph.D.-level researchers and other employees of the company’s Technology organization. “It’s striking to me how the presence of the Phillips 66 Research Center really contributes to the culture of Bartlesville. Here we have a strong community of world-class researchers and engineers doing cutting-edge work, and they help foster an emphasis on curiosity and learning that feeds into the wonderful schools and community resources here,” says Ann Oglesby, vice president, Technology. Phillips 66 is one of the only downstream energy companies to have a full-scale research and development program. Dedicating the time and resources to better understand, monitor and manage the environmental impact of energy manufacturing is one of the ways Phillips 66 fulfills its vision to provide energy and improve lives. “We’re focusing our technology program to help our operations run better by using less energy and less water. We’re investing in sustainable technologies and renewable energies,” said Greg Garland, Phillips 66 chairman and CEO. “All of this has the combined effect of making us a better business that runs smarter and takes care of the communities where we live and work.” vv
In the fuel cell program, researchers are developing a device that converts the chemical energy contained in natural gas directly into electrical power. Because of this direct conversion, which doesn’t involve combustion, the process has very low emissions and generates electricity with approximately two times the efficiency of a natural gas power plant. One of the most high-profile successes to come out of the research center involves flexible solar cells. Working with these solar cells, Phillips 66 researchers have broken a number of world records for power conversion efficiency, bringing the technology closer to the possibility of commercialization. Phillips 66 solar cell technology is based on proprietary conductive polymers. They can be manufactured with low-cost printing technology, and will enable the development of flexible, lightweight and transparent solar power modules. “Their unique features open the doors to many interesting applications such as building materials with integrated solar cells,” Heald said. “They’re environmentally friendly, and we’re getting closer to making them viable for real-world applications.”
For Phillips 66, technology’s role for the next 66 years is certain to be significant, as researchers make progress on energy production that’s cleaner, more efficient, and more sustainable. It’s a great example of the real-world meaning of Phillips 66′s values of safety, honor and commitment.[187]
March 22, 2018: Chevron Phillips Underestimated the Costs of Training Construction Crews in Safety and Productivity
The Midland Report reported on March 22, 2018 that Mark Lashier, Chief Executive of Chevron Phillips, a joint venture between Chevron and Phillips 66 that recently completed a new ethane cracker at its Cedar Bayou complex at Baytown that has the capacity to produce 1.5 million tons of ethlyene a year, says that the company had no problem finding labor to construct the cracker, but underestimated the cost of training construction crews to adhere to a high level of safety and productivity. Lashier added that reducing the cost to complete a new wave of petrochemicals projects will be critical to remain competitive as the industry expands along the Gulf Coast to meet burgeoning demand for plastics and consumer goods in emerging markets in China, India and elsewhere. “Shale is here to stay,” he said. “The key issue is to addess is rising capital costs.”[188]
March 19, 2018: Environmentalists Protest Phillips 66 Permit They Say Increases Processing of Tar Sands Oil at Rodeo Refinery
SF Gate reported on March 19, 2018 that environmental activists gathered outside the San Francisco offices of the Bay Area Air Quality Management District to protest a permit adjustment they said significantly increased the Phillips 66 refinery in Rodeo's ability to process tar sands oil. Advocates with the Center for Biological Diversity said that a permit that was quietly approved by the district January 25, 2018 allows a significant increase in the operational capacity of a refinery "hydrocracking plant," which converts crude oils like those from the Canadian tar sands to more valuable petroleum products like fuel.
The district, however, disputes the claim saying that the permit was issued, and it allows the refinery to produce 65,000 barrels of oil per day, but according to deputy air pollution control officer Damian Breen that permit did not increase the amount of oil the facility can produce. Breen said the Center for Biological Diversity is responding to a clerical error, which has since been addressed, indicating that the old permit only allowed for 42,000 barrels per day. That document was inaccurate, according to Breen, and the hydrocracking plant in question has been permitted to produce 65,000 barrels a day for roughly 10 years.[189]
March 19, 2018: Phillips 66 Proposes 94-mile Pipeline from St. James to its Alliance Refinery
The Times Picayune reported on March 19, 2018 that Phillips 66 wants to build another 94-mile crude oil pipeline from what it calls the St. James oil market hub to its Alliance Refinery in Plaquemines Parish. A significant part of the path of the proposed pipeline would cross through wetlands in the Barataria Basin and Breton Sound Basin, and across Lake Salvador, according to a map accompanying a brief summary provided to local officials by the company earlier this month. However, the proposed route would be within existing pipeline corridors. "The pipeline would provide Louisiana refineries with new access to U.S.-produced crude oil, reducing reliance on foreign crude and keeping them competitive in the global market for energy projects," says a one-page "Ace Pipeline Summary" that's been sent to a number of local government officials.
Anne Rolfes, founding director of the Louisiana Bucket Brigade, one of the organizations that has opposed Phillips 66 funded Bayou Bridge pipeline, raised questions about this latest proposal, including the failure to inform the public about the pipeline plans. "This is what corruption looks like: our government helping an out-of-state oil company to secretly expand," she said. "They have done this out of the public eye, with no input, and there's a reason for it: they are polluters, they should be ashamed, they should be banned from Louisiana. Instead our so-called leaders roll out the red carpet. "Nothing about the Bayou Bridge process has been honest - from the secret meeting our governor had with Bayou Bridge employee Mary Landrieu to the claims of providing jobs for locals," Rolfes said. "Up-and-down the pipeline route the license plates of the construction workers are from out of state. It will be the same with this additional section."[190]
March 15, 2018: Appeals Court Allows Phillips 66 Funded Bayou Bridge Pipeline Construction to Proceed
The Times-Picayune reported on March 15, 2018 that by a two-to-one vote, judges in the 5th U.S. Circuit Court of Appeal in New Orleans struck down a ruling by a federal judge in Baton Rouge that had halted the pipeline's construction through the environmentally-sensitive Atchafalaya Basin putting construction of the controversial Bayou Bridge oil pipeline back on track. Judge Edith Brown Clement wrote that the district court "abused its discretion in granting a preliminary injunction" halting the pipeline's construction. The district court should have allowed the case to proceed with the Army Corps of Engineers providing its reasons for permitting the pipeline, she wrote. Environmental groups opposed to the pipeline say they'll appeal Thursday's decision.
One of the three appeals court judges filed a dissenting opinion. Judge W. Eugene Davis agreed with Dick that the Corps had not explained how the company's mitigation plan would reduce the pipeline's impacts. The Corps "must explain how the out-of-kind mitigation measures replace the 'lost functions and services' of the bald-cypress/tupelo swamp," Davis wrote.[191]
March 9, 2018: As Gasoline Demand Declines, Chevron Phillips Looks to Petrochemicals
The Houston Chronicle reported on March 9, 2018 that in 2010 Ron Corn and his team at Chevron Phillips, intrigued by budding oil and gas production in the Eagle Ford basin south of San Antonio, anticipated a seismic shift in domestic energy output and convinced company executives to build a multi-billion-dollar processing plant in Baytown to produce ethylene, a natural gas-derived feedstock for plastics. "It was quite a radical concept,” said Corn, who now serves as the company’s senior vice president for petrochemicals. “There hadn’t been a whole lot of construction.” Eight years later, that early bet promises to pay off in spades for Chevron Phillips, a joint venture of the oil company Chevron and Houston refiner Phillips 66. The processing plant, known as a cracker, is near completion as petrochemicals emerge as a savior for an oil and gas industry facing a future of electric cars, renewable power and intensifying efforts to wean the global economy from fossil fuels.
The growth in petrochemicals is a key reason that oil industry executives and analysts are discounting predictions that peak oil demand — the point at which oil consumption begins a steady, long-term slide — is imminent. The International Energy Agency anticipates that petrochemicals will account for a quarter of the growth in global oil consumption during the next five years, replacing gasoline as the driver of crude demand. “Unlike refining, and ultimately unlike oil, which will see a moment when the growth will stop, we actually don’t anticipate that with petrochemicals,” says Andrew Brown, upstream director for Royal Dutch Shell.
Chevron Phillips’ Corn said that even during the oil bust, his team never doubted the potential of the massive Baytown cracker, the company’s only one in the United States so far. The facility, now undergoing the final steps before startup, will expand the company’s U.S. ethylene and polyethylene production capacity by 40 percent. “We believed we were building a very competitive asset,” Corn said. “It was a big step for us.”[192]
March 7, 2018: A New Generation of Activists Organize in the Shadow of Phillips 66's Wilmington Refinery
Jesse Hardman published an article in High Country News on March 7, 2018 about the 10-square-mile South Los Angeles community in close proximity to three oil refineries including Phillips 66 Wilmington Refinery, that has the dubious distinction of having some of the worst air quality in a city that already has the country’s worst ozone levels. A 2013 California state cap-and-trade law offered incentives for big polluters to become greener. But one study suggests that the program has inadvertently made air quality worse in places close to refineries and power plants, like Wilmington. Here’s how it works: Under the law, big polluters like oil refineries and power plants must buy permits that allow them to emit greenhouse gases. The number of permits available is reduced year by year, in an effort to gradually bring down the state’s overall carbon emissions. But rather than lower their emissions to meet the program’s targets, oil companies like Tesoro, which operates in Wilmington, choose to buy up other companies’ allowances, or pay to offset the damage they cause elsewhere, by planting trees in Alaska, for example. This gives them free license to continue polluting in their immediate areas.
In Wilmington, oil companies start their PR push early. Twenty-four-year-old activist Ashley Hernández remembers getting free backpacks and pencils with oil company logos as a kid. “You get popcorn from them every Halloween,” she said. For more than six decades, Phillips 66 has co-opted that holiday, painting one of its 3-million-gallon gas storage tanks orange to create an enormous grinning jack-o-lantern — “Smilin’Jack” — that towers over the community. Employees in bright yellow safety vests stand beneath chemical tanks and smokestacks, giving local families bags of caramel corn and plastic balls marked with the Phillips 66 logo. “They do community events, they’ll fund carnivals, they’ll do youth trips. They do it with an aim to silence them,” said Hernández, noting the hold that local industries have over her working-class parents, originally from El Salvador. After decades spent making a life in Wilmington, Hernández and her family would find it hard to just leave.
Sylvia Arredondo is at the helm of a growing movement made up mostly of women of color who grew up here but left to get an education, and then later returned to battle the industries that are poisoning their families. Their fight is a legal and political challenge to oil companies and local air-quality regulatory bodies. But it’s also an exercise in civic engagement, one that even Wilmington’s older generations have joined, despite their fear of being deported or losing their jobs at the local oil facilities. As a child, Arredondo attended classes in a wealthier district, but returned to Wilmington in time for high school. By then, she knew that her community’s poor air quality was something wealthier neighborhoods would never stand for. One of her college textbooks called her city a “toxic hotspot.” “Before that class, I didn’t know what environmental justice was,” Arredondo said. Now she fights for it as the civic engagement coordinator for the nonprofit Communities for a Better Environment, and as the president of Wilmington’s neighborhood council.[193]
March 1, 2018: Judge Explains Why She Stopped Construction Through Atchafalaya Swamp of Phillips 66 Funded Bayou Bridge Pipeline
Courthouse News service reported on March 1, 2018 that U.S. District Judge Shelly Dick said the Bayou Bridge Pipline, funded in part by Phillips 66, threatens the health and longevity of the Atchafalaya Basin, the largest river swamp in North America and agreed with environmentalists who filed the lawsuit that the centuries-old cypress and tupelo trees in the path of the pipeline are irreplaceable. “While an injunction could delay the schedule for this project, it is well established that temporary economic harm does not outweigh permanent environmental degradation such as loss of forests – especially ancient trees – or damage to wetlands,” Judge Dick wrote. Dick’s order halted all work in the Atchafalaya Basin until the case has been tried. Company attorneys said the Corps of Engineers’ permit requires Bayou Bridge Pipeline to restore the Basin’s “pre-existing wetland contours and conditions” when the project is done. However, Judge Dick said the Corps of Engineers did not show it took into consideration past and present cumulative environmental impacts. “The Corps’ and BBP’s [Bayou Bridge Pipeline’s] myopic view that they are only required to consider the impacts of this singular project is not consistent with the regulations or applicable jurisprudence,” Dick wrote.
Dick noted in her order that documents show the Louisiana Department of Environmental Quality raised concerns that running the pipeline through the Atchafalaya “would add to the cumulative effect of ecologically detrimental hydrologic alteration, and the pipeline would obstruct planned efforts to restore hydrologic function.” Plaintiffs said the Corp’s plans to mitigate wetland losses did not measure up to what is lawfully required. Judge Dick agreed. Typically, environmental mitigation programs are undertaken in the same region as the project that caused the environmental destruction. Plaintiffs showed they had proposed that the Corps of Engineers require Bayou Bridge Pipeline to clean up spoil banks left in the wetlands from previous pipeline constructions that did not follow state and federal protocol. Instead, however, the Corps required Bayou Bridge to purchase environmental mitigation credits for projects far away from the Atchafalaya Basin, in violation of regulation, Dick found.[194]
February 26, 2018: Lawsuits Filed Over Contractor's Death in Explosion at Phillips 66 Partners Paradis Pipeline Station
Houma Today reported on February 26, 2018 that Phillips 66 and the widow of Josh Helms, killed on February 9, 2017 in a natural gas pipeline explosion at the Phillips 66 Partners Paradis Pipeline Station, have filed lawsuits in state District Court in Thibodaux against Blanchard Contractors and its insurers. Mandy Helms is suing individually and on behalf of her minor daughter. According to the lawsuits, a Blanchard employee opened or operated valves without making sure they were aligned. This caused the release of natural gas and, subsequently, an explosion, the lawsuits say. Phillips 66 says it lost everything at the station. The company is suing for unspecified damages, including emergency response, cleaning, building temporary re-routing facilities, and replacing and rebuilding structures and equipment. Mandy Helms is also suing for unspecified damages, including loss of income and medical and psychological services related to her husband’s death. Phillips 66 said six people were working at the site when the fire occurred: three of its employees and three contract workers from the Cut Off-based Blanchard Contractors. Two contract workers were taken to area hospitals.[195]
February 26, 2018: Appeals Begin to Halt Work Stoppage on Phillips 66 Funded Bayou Bridge Pipeline, Say Cost is Almost $1 M Per Day
The Advocate reported on February 26, 2018 that according to ETP spokeman Alexis Daniel construction within the Atchafalaya Basin has stopped on Bayou Bridge Pipeline, a $700 million joint venture between Energy Transfer Partners and Phillips 66. Bayou Bridge lawyers have asked the judge to suspend her work stoppage order, saying the construction halt would cost the company almost $1 million daily. They have asked Judge Dick to resolve that request by Tuesday and want the suspension of the work stoppage while they pursue an appeal with the U.S. 5th Circuit Court of Appeals. In Bayou Bridge’s motion, lawyers argued that Judge Dick could not have meant to stop work on the entire pipeline's length. They noted the environmental groups that sued last month over the line have only argued about the line’s potential effect on the Atchafalaya. The attorneys also noted that Dick's two-page order did not specify its breadth, saying it enjoined "in only the most general terms 'further action on this project.'" The lawyers added that if the order does extend to the entire project, the cost to Bayou Bridge Pipeline LLC would be as much as $1.675 million per day.
The plaintiffs in the suit and the protesters who gathered Monday in Belle Rose are both battling Bayou Bridge, but to different ends. Much of the testimony in the suit discussed the harm being done to the Atchafalaya Swamp. The plaintiffs urged the U.S. Army Corps of Engineers to order the pipeline company to perform meaningful work to offset the damage locally, such as by repairing existing oil infrastructure. The protesters, meanwhile, viewed the pipeline as inherently unsafe and demanded its complete removal. Margaret Logue, 23, one of three protesters who refused to leave the Belle Rose-area construction site off La. 70 and was later arrested Monday, called on Bayou Bridge and the state government to respond to their demands. “We believe in the power of the people to stand up peacefully and prayerfully against a government and a company that have proven themselves unwilling to and incapable of protecting our greatest treasures: our water, our air, our land and our people,” she said.[196]
February 23, 2018: Federal Judges Stops Construction of Phillips 66 Funded Bayou Bridge Pipeline
The Advocate reported on February 23, 2018 that U.S. District Court Judge Shelly Dick has issued an order prohibiting the companies building the Bayou Bridge pipeline from continuing construction. The judge's order has halted construction of the pipeline planned through the heart of the Atchafalaya Basin, granting the request of environmental groups opposed to the project. In the order issuing a preliminary injunction, Dick wrote that she was enjoining further work on the pipeline "in order to prevent further irreparable harm until this matter can be tried on the merits." “The court’s ruling recognizes the serious threat this pipeline poses to the Atchafalaya Basin, one of our country’s ecological and cultural crown jewels,” Jan Hasselman, an Earthjustice attorney, said in a statement. “For now, at least, the Atchafalaya is safe from this company’s incompetence and greed.” Alexis Daniel, spokeman for Energy Transfer Partners, a joint owner of the pipeline project, declined comment. "The Judge did not issue any opinion explaining her order. Until such time as that is issued, and we can review, we will have no further comment."
Construction on the $175 million, 162-mile pipeline has already begun. The line would transport crude from Lake Charles, home to Phillips 66's Westlake Refinery, to St. James, Louisiana, connecting to an existing line that originates in Nederland, Texas. The project is 60 percent owned by Energy Transfer with the remainder owned by refiner Phillips 66. Once complete, the Bayou Bridge system will have capacity to transport up to 480,000 barrels of oil per day to refineries along the Mississippi River. It is projected to start service by the second half of 2018. The line also would move oil from Texas and as far as North Dakota, through connections with Energy Transfer’s Dakota Access, to Gulf Coast refiners. Louisiana is home to around 3.5 million barrels per day of refining capacity, according to the U.S. Energy Information Administration. Energy Transfer’s 1,172-mile (1,885-km) Dakota Access crude pipeline was thrust into the spotlight following massive protests near its construction site in North Dakota. Although protesters were able to temporarily halt construction, it began service in mid-2017.[197][198]
Pipeline attorney William Scherman previously said in a story published Feburary 8, 2018 that Bayou Bridge is prepared to spend $20 million to perform offsetting environmental projects known as wetlands mitigation. However, Scott Eustis, community science director for the Gulf Restoration Network, testified the mitigation would take place 55 miles away. Clemson ecology professor William Conner said the project the Corps agreed to would replant bottomland hardwood forests, not swamps. "It's two different kinds of forest performing two different kinds of function. … I don't think the mitigation will replace what is going to be cut, simple as that," Conner said on the stand.[199]
February 16, 2018: California Bill Would Triple Fines for Refinery Violations
The Benicia Herald reported on Feburary 16, 2018 that Sen. Bill Dodd (D-Napa) has introduced a new bill to prevent harmful emissions from oil refineries by increasing fines for serious violations of emissions standards that lead to sickness in individuals or forcing sheltering-in-place orders. Dodd’s bill, Senate Bill 1144, aims to triple existing fines for refineries that violate emission standards if they cause health problems or impact more than 25 people.
Dodd represents Rodeo where in September, 2016, an oil sheen connected to a tanker at the Phillips 66 refinery in Rodeo spilled into the San Pablo Bay sending an odor that sickened people in nearby areas– including Vallejo. The state’s Office of Emergency Services reported that area hospitals and medical facilities treated 120 patients for headaches, nausea, dizziness, and burning of the eyes, nose and throat, according to the news release. The Phillips 66 refinery was subsequently issued a notice of violation by the Bay Area Air Quality Management District.[200]
February 16, 2018: Chevron and Phillips 66 May Build Second Ethane Cracker at Baytown
The Houston Business Journal reported on February 16, 2018 that Chevron Phillips Chemical, a joint venture of Chevron and Phillips 66, may build a second ethane cracker at the company’s Cedar Bayou plant in Baytown within the next several years, now that it’s nearing completion on the first. Phillips CEO Greg Garland, speaking at Credit Suisse’s annual energy summit, said the global market for petrochemicals could support further investments like the Cedar Bayou facility. “Over the course of the next decade or couple decades, we’ve got billions of people coming into the middle class in India and China and throughout Asia, and they’re all going to be consumers,” Garland said. “So we think that bodes well long-term for demand for the customer-facing products like the polyethylene we produce at CP Chem.” The company is already doing initial work around a potential second cracker project today, Garland said, but he said he wouldn’t expect a final investment decision on that until 2019, which would put a lot of the heavy lifting for the project in the first couple years of the next decade.
Phillips 66 has a 2018 capital budget of $2.3 billion, $1.4 billion of which will go toward growth, excluding spending at the company’s joint ventures, Garland said. Long term, Garland thinks $2 billion to $3 billion is about right for the company’s annual spending, he said. “You don’t have to go back that far, and we’re spending $6 billion a year,” Garland said. “You’ve got to do projects that suit your cost of capital and create value for shareholders. Looking around that opportunity set out there, I just don’t see than many things I really want to invest in.” Garland said he thinks that, in 2018 and 2019, Phillips 66 will stay at the low end of the capital guidance range.[201]
February 8, 2018: Opponents of Phillips 66 Funded Bayou Bridge Pipeline Clear Legal Hurdle to Stop Construction
The Advocate reported on February 8, 2018 that U.S. District Court Judge Shelly Dick has kept a fight alive to shut down construction of the Bayou Bridge pipeline, funded in part by Phillips 66, determining that allowing construction to continue would cause "irreparable harm" because construction crews would continue cutting down centuries-old cypress trees. Dick has yet to determine if the plaintiffs have a chance of winning the suit to pull the permit but indicated she would make a ruling Friday following more arguments. Opponents are asking U.S. District Court Judge Shelly Dick to block construction while the court considers rescinding a necessary U.S. Army Corps of Engineers permit. Should the suit continue, the judge determined, there would be reason to halt construction while the full matter is argued. Having cleared that hurdle, the plaintiffs, represented by attorneys from the nonprofit Earthjustice, will now have to demonstrate that the Corps was wrong to issue the permit.
Pipeline attorney William Scherman said Bayou Bridge is prepared to spend $20 million to perform offsetting environmental projects known as wetlands mitigation. However, Scott Eustis, community science director for the Gulf Restoration Network, testified the mitigation would take place 55 miles away. Clemson ecology professor William Conner said the project the Corps agreed to would replant bottomland hardwood forests, not swamps. "It's two different kinds of forest performing two different kinds of function. … I don't think the mitigation will replace what is going to be cut, simple as that," Conner said on the stand.[202]
February 7, 2018: Phillips 66 Announces Quarterly Dividend
Businesswire reported on February 7, 2018 that the board of directors of Phillips 66 (PSX) has declared a quarterly dividend of 70 cents per share on Phillips 66 common stock. The dividend is payable on March 1, 2018, to shareholders of record as of the close of business on Feb. 20, 2018.[203]
February 7, 2018: Phillips 66 Funded Bayou Bridge Pipeline Rerouted Around Resistance Camp
Truth Out reported on February 7, 2018 that the controversial Bayou Bridge pipeline, funded in part by Phillips 66, has been rerouted to go around the L'eau Est La Vie resistance camp. Located southwest of Baton Rouge, the camp lies on land purchased in December by pipeline opponents, who call themselves water protectors. It is thought to be the first time that water protectors have purchased land that lies in the path of a proposed pipeline. Water protectors have been camping out at L'eau Est La Vie since December, protecting the land and preparing it to be used by the surrounding communities as a hub for environmental education and sustainable agriculture.
Energy Transfer Partners confirmed the pipeline will go around the camp. "In this case, we were able to adjust the route to increase our co-location with other utilities in the area," said Alexis Daniel, a spokesperson for Energy Transfer Partners.[204]
February 6, 2018: Seventeen Tons of Highly Toxic Chemicals Escaped from Chevron Phillips' Chemical Plant in Baytown During Hurricane Harvey
The New York Times ran a major story on February 6, 2018 about the 2,500 sites that handle toxic chemicals in the United States, 1,400 of which are located in areas at high risk of flooding. The report highlighted the spill at Chevron Phillips' chemical facility in Baytown, Texas, operated jointly by Chevron and Phillips 66, where Hurricane Harvey swamped their chemicals plant, causing the release of 34,000 pounds of sodium hydroxide and 300 pounds of benzene — both highly toxic.
"By the time the murky flood waters had receded from the sprawling Chevron Phillips chemical plant in Baytown, 34,000 pounds of sodium hydroxide and 300 pounds of benzene — both highly toxic — had escaped through a damaged valve. The plant, a joint venture between Chevron and Phillips 66, is one of many that filled the region’s streets with a stew of chemicals, debris and waste in the days after Hurricane Harvey and its torrential rains.
Employees later pumped some of the tainted water into 80 steel tanks. But most of the product “was lost in the floodwater,” David Gray, an Environmental Protection Agency spokesman based in Dallas, said in an email. A Chevron Phillips spokesman, Bryce Hallowell, declined to give further details of the spill. He stressed that the plant “was at the center of this incredibly powerful storm.” The chemical site lies in a moderate-risk flood zone, defined by the government as having a 0.2 percent chance of flooding in any year. It was at least the third time in three years that the Chevron Phillips facility blamed heavy downpours for chemical leaks. The Chevron Phillips plant also reported one of the largest Harvey-related emissions of chemicals into the air.
But even as flooding risks increase, chemical companies continue to build in vulnerable areas. A boom in plastics manufacturing has brought billions of dollars of investment to the Gulf shoreline. The Chevron Phillips site had been in the midst of adding a new $6 billion ethane processor, one of the biggest investments in the Gulf’s fast-growing petrochemicals industry. Despite repeated flooding, the chemicals manufacturer still considered the site, at Cedar Bayou, to be “the optimal location” for its new ethane facility, Mr. Hallowell said. He declined to detail protections that have been considered or installed, or whether they were designed to withstand future floods.[205]
February 5, 2018: Phillips 66 Benefits from $2.7 Billion Federal Tax Break from Donald Trump
Kallanish Energy reported on February 5, 2018 that Phillips 66 reported fourth-quarter 2017 earnings of $3.2 billion, benefiting from $2.7 billion in federal tax changes. Excluding that tax change, adjusted earnings in Q4 were $548 million, compared with $858 million in Q3, the company said. The tax benefit comes from the re-evaluation — through the lens of U.S. tax reform — of certain deferred tax liabilities that Phillips 66 would have claimed on prior balance sheets. In other words, Phillips 66 had been expecting, and listing on its balance sheet, future tax liability that it will no longer have to deal with because of President Donald Trumps' recent tax reform bill.
For Phillips 66, Valero Energy Corp., Marathon Petroleum Corp. and Andeavor, the four biggest independent oil refiners, the U.S. tax code overhaul has been more profitable than their actual business. They posted one-time tax gains of $7 billion combined in the fourth quarter, matching their net incomes for all of 2016, according to data compiled by Bloomberg. Marathon's board was so enthusiastic it approved a 15 percent dividend increase. Even without the tax gain, Phillips 66 beat earnings estimates by 19 cents. It's an extra boost to an industry already riding high from fat margins after from turning raw crude oil into fuels and strong worldwide demand for gasoline and diesel.
Phillips reported Q4 drops in earnings in refining and chemicals. The Q4 earnings for refining dropped from $550 million in Q3 2017 to $371 million in Q4 2017. Although the company’s refineries “ran at 100% capacity utilization,” shrinking profit margins led to a decline in refining earnings in Q4, compared to the third quarter. For chemicals, the earnings were $27 million in Q4, down from $121 million in Q3 2017. The company’s full-year 2017 midstream earnings were $464 million, up from $280 million in full-year 2016. That was due to higher pipeline and terminal volumes as well as an increase in the value of the company’s stake in DCP Midstream, a natural gas pipeline company.[206][207][208]
January 31, 2018: Phillips 66 Community Outreach Representative Diane Anderson is Ponca City 'Citizen of the Year'
The Ponca City News reported on January 31, 2018 that the Ponca City Area Chamber of Commerce has honored Phillips 66 community outreach representative Diane Anderson as the 'Citizen of the Year'. Anderson is a founding member of the Attucks Community Alliance, a nonprofit organization that provides neighborhood resources, where resources are lacking or non-existent. If not for this group and for the center, the community would be without a valuable place for its children and without a meeting venue for the community as a whole. It is a daily struggle to keep the doors open and the people involved. She is a current member of the University Center Foundation Board, the Ponca City Main Street Board, various Chamber of Commerce activities including Education & Workforce development, Business Council and Ambassadors. Anderson served 3 terms as City Commissioner with two of the three in the capacity as Vice-Mayor and has been instrumental in the organization of activities associated with the Martin Luther King, Jr. committee and the Juneteenth Celebration Committee.[209]
January 30, 2018: New Pipeline Will Serve Phillips 66's Santa Maria Refinery
The Santa Maria Times reported on January 30, 2018 that ERG Operating Co. has been authorized to install a petroleum pipeline system from Cat Canyon to the Sisquoc Pump Station and Pipeline is expected to eliminate 7,000 tanker truck trips along that route each year. Skip Grey, assistant director of County General Services, told supervisors the 2.9-mile pipeline system, consisting of two eight-inch pipes in a single trench, will have a capacity of 25,000 barrels of oil a day. Although there will be two pipelines, only one will carry crude oil at a time, officials said. The second would only carry oil if the first is shut down for maintenance or repair. If the line carrying oil had to be shut down due to an unforeseen problem, the second pipe would allow the “heavy crude” to be pumped back to the 10,000-barrel heating tanks so the temperature required by Phillips 66 could be maintained until the flow could be restarted. the pipeline will be equipped with a state-of-the-art supervisory control and data acquisition, or SCADA, system that will monitor the status of the line and crude oil movement and provide real-time data so company officials can shut down the line should a problem be detected.[210]
January 25, 2018: Judge Rules Phillips 66 Funded Bayou Bridge Pipeline LLC Can Keep Land-Grab Records Secret
Courthouse News reported on January 25, 2018 that Bayou Bridge Pipeline LLC, funded in part by Phillips 66, has no obligation under the state’s public-records law to hand over documents about its claim to easements across hundreds of residents’ private properties. “There is nothing that shows here that the records plaintiffs seek are public records,” East Baton Rouge District Court Judge Michael Caldwell said in his ruling from the bench. In a lawsuit filed last week on behalf of the groups by the New York-based Center for Constitutional Rights, the environmentalists claimed 400 parcels of private property are being taken for the construction of the Bayou Bridge Pipeline. Three environmental groups – Atchafalaya Basin Keeper, Louisiana Bucket Brigade and 350 New Orleans – argued before Judge Caldwell that records about Bayou Bridge Pipeline LLC’s land grabs along the route of the proposed pipeline must be disclosed. Bayou Bridge Pipeline LLC has tried to seize even unwilling homeowners’ land on the pretext “it has legal authority to exercise eminent domain and take private property because it is a ‘common carrier’ under Louisiana law and that its proposed pipeline is ‘in the public interest and necessity,’” according to the complaint. Judge Caldwell ruled that because BBP is neither a nonprofit nor an entity of the state, it is under no obligation to turn over records about its eminent-domain requests. Before handing down his decision, Caldwell acknowledged the pipeline is a “hot topic” and a “matter of great public interest.” “But what is before me today does not address the merits – whether the pipeline is or is not a good idea,” the judge said. “It is only a public-records request.”[211]
January 24, 2018: Phillips 66 Funded Bayou Bridge Pipeline Begins Construction In Louisiana Amid Protests, Legal Challenges
The Advocate reported on January 24, 2018 that coonstruction has begufn the Bayou Bridge pipeline has begun which will carry crude oil between a hub in Lake Charles and a terminal in St. James Parish but also cut through the environmentally sensitive Atchafalaya Basin, even as opponents pursue multiple legal challenges to block the 163-mile line across southern Louisiana and some have promised to stand in the way of the bulldozers and backhoes. "We are excited to be able to conclude the more than 2 year permitting and have begun construction activities," said Energy Transfer Partners spokeswoman Alexis Daniel. The company declined to identify where work had begun but environmental groups have spotted heavy equipment in areas like Bayou Lafourche that they believe are staging there to build the pipeline.[212]
The Bayou Bridge Pipeline is a joint venture between ETP and Phillips 66 Partners, LP, in which Energy Transfer has a 60% ownership interest and serves as the operator of the pipeline.[213]
January 11, 2018: Groups Sue To Stop Phillips 66 Funded Bayou Bridge Pipeline, Which Received Permit For Greater Capacity Than Publicized
KATC reported on January 11, 2018 that several Louisiana groups including the Louisiana Crawfish Producers Association, West; Gulf Restoration Network; Waterkeeper Alliance; and Sierra Club have sued the US Corps of Engineers to stop the Bayou Bridge pipeline project claiming claims that the Corps violated federal environmental laws in its approval of the project. The National Environmental Policy Act requires agencies to prepare an environmental impact statement for "major Federal actions significantly affecting the quality of the human environment." The plaintiffs claim that the Corps disregarded a lot when it found the project would have no significant impact, like the pipeline company's spill record and the project's potential impacts on flooding and restoration projects, among other factors. The plaintiffs claim the Corps also failed to consider alternatives to the proposed project, as NEPA requires, like connecting to existing pipelines or a "restoration alternative" that would require the company to remove legacy spoil banks in the Basin.
“We have a right to a healthy environment. If the Cajun people of Louisiana had challenged the first pipeline when it came through Louisiana, we wouldn't be facing the environmental mess that we have in coastal Louisiana and the Atchafalaya Basin,” Jody Meche, a commercial crawfisherman with the Louisiana Crawfish Producer's Association, West, stated in the release. “It is the right thing to do to challenge the construction of a new pipeline by Energy Transfer Partners, which has a track record of flagrantly violating environmental laws.”
As proposed, Bayou Bridge was to carry up to 280,000 barrels of oil a day, but the final permit allows the project to carry up to 480,000 barrels of oil — another issue with which the plaintiffs take issue. "This dramatic increase in capacity within a fixed pipeline diameter has significant consequences for the risks of spills, and their impacts. However, these consequences were neither disclosed nor analyzed by the Corps in the permitting process," the suit claims, also adding that the existing pipeline system is operating under capacity — even as it was described as critical infrastructure.[214]
January 8, 2018: Former ConocoPhillips CEO Jim Mulva Concerned About Maintaining Riverfront Views For His Proposed Mulva Cultural Center in De Pere
The Green Bay Press-Gazette reported on January 8, 2018 that Jim Mulva and his wife want unobstructed river views to the northwest for a $7 million cultural facility they will personally pay for called the Mulva Cultural Center in De Pere. The proposed center, slated for a 1.5-acre site on vacant land near the Claude Allouez Bridge, would look directly west across the river toward St. Norbert College, which has benefited from tens of millions of dollars in contributions from the couple. The proposed two-story Mulva Cultural Center could be 30,000 to 40,000 square feet and include space for performances and art exhibits as well as a rooftop viewing area.
The city is exploring height limits on buildings to preserve river views. The city is in the process of hiring a consultant to study whether height restrictions would be economically viable, what kinds of businesses can succeed with height limits and how the proposed center can best align with the rest of downtown. Real estate broker Rich Susens said he’s skeptical that South Broadway will see much interest from developers if the city further limits the height of buildings. “I’ll tell you right now, I don’t think you’re going to see much development if you have restrictions on property,” said Susens.
In a written statement on Monday, Jim Mulva, a De Pere native and retired CEO of energy giant ConocoPhillips, said the planned study would help ensure that the cultural center becomes a world-class facility. "This work takes time," Mulva said. "We all want to make sure we get this right so to positively impact De Pere for generations."[215]
Mulva received the biggest package of any CEO in 2012 when he stepped down as CEO of ConocoPhillips. Mulva's total severance package was about $156 million and his exit sum is on top of salary, bonus and other compensation received while working for the company. "We calculated severance pay as the total of any amounts given in connection with end of service as C.E.O.,” said Aaron Boyd, director of governance research at Equilar. In Mulva’s case, much of the payout came from the market value of stock gains he received. But he also received payouts from a cash severance, a bonus and additional retirement distributions. ConocoPhillips said that the pay packages were fully disclosed to shareholders and that they were “the same pension and benefits programs as described in the proxy statement as any other retiring executive.” “The vast majority of Mulva’s compensation that he earned during his long and successful career as an executive remained in the form of company stock at his time of retirement,” Aftab Ahmed, a spokesman for ConocoPhillips, said in an e-mail.[216]
January 3, 2018: Winter Storm Affects Phillips 66's Wood River Refinery, Could Affect Bayway Refinery
Reuters reported on January 3, 2018 that Phillips 66 shut a crude and coking unit at its Wood River Refinery after a line froze followed by a brief fire, according to a source. Phillips 66 does not currently have a timeline for restarting the units at its Illinois plant, the source said.
Refiners along the U.S. East Coast were bracing for difficulties in the next few days. So far, the five refineries along the East Coast including Phillips 66's Bayway Refinery in New Jersey are dealing with frozen pipes and other challenges, but have not experienced any significant outages, according to sources at the plants. “We’ve had a lot of freeze-up but haven’t lost any units. This weekend will be bad,” said a source at Monroe Energy’s 185,000-barrel-per-day refinery outside Philadelphia. Although most refineries, particularly those in northern climates, are designed to operate throughout the winter, increasingly extreme weather conditions in recent years have tested their capabilities. In 2015, more than a third of the U.S. East Coast’s capacity was abruptly shut down due to glitches.[217]
December 28, 2017: Runaway Barge Contracted by Phillips 66 Leaves Costly Mess Near Sweeny Refinery
The Houston Chronicle reported on December 28, 2017 that a runaway barge contracted by Phillips 66 to dredge the bottom of the river around a Phillips 66 terminal near Sweeny Refinery was one of two barges and a tugboat that came unmoored on August 28, 2017 in the aftermath of Hurricane Harvey. The barge, 140 feet long, 45 feet wide and weighing 476 tons, went careening down the San Bernard River through Brazoria County demolishing at least 16 docks and boathouses during the rampage. Now, property owners are bracing for a fight over who will pay for the damage.
A spokesman for Phillips 66, Dennis Nuss, said the owner of the barge, GSD Companies, and the owner of the tugboat, M&C Oilfield Services, both based in Louisiana, claimed full responsibility for the damage. The Phillips spokesman declined to comment on the timeline of events, including whether the refinery gave the companies ample warning to get the barge and tugboat off the river ahead of the storm. The barge was contracted by Phillips to dredge the bottom of the river around the terminal. The spud barge was connected to a "pot barge," a smaller vessel used to dispose of the sand and silt dredged up from the river. The barges were still docked at the terminal when Harvey made landfall in Texas on August 25, 2017 At some point on August 28, the two barges and tugboat became unmoored from the docking terminal and floated down the river, the rising waters pushing the spuds up from the riverbed and setting it on a path of destruction.
More than three months after the runaway barge ran amok on the San Bernard River, the 16 property owners who sustained damage are still trying to pick up the pieces. The lack of a swift response from the parties responsible for the barge has sowed further confusion and frustration. Shelly Stubbs believes the breakdown in communication is a calculated play by the barge and tugboat company to force the affected river residents to take legal action. She wonders if the companies would rather take their chances in a lawsuit against a group of overextended property owners than pay to repair hundreds of thousands of dollars in damage. Any potential lawsuit also could be subjected to a nuance of maritime law called the limitation of liabilities, which states that if a vessel causes damage without the knowledge or direct involvement of its owners, they are not liable for anything more than the vessel's post-incident value. Even for runaway barges, there is precedent for limited liability. In 2011, a district judge in Louisiana ruled in favor of a company that owned a 200-foot barge that came unmoored during Hurricane Katrina, exonerating the company for massive damage that included destruction of several houses and a school bus. "The owner of the barge may be able to escape liability altogether or limit his liabilities to the value of the barge itself," said Thomas Fitzhugh, a maritime law expert and partner at Schouest, Bamdas, Soshea & BenMaier in Houston. "It's been a feature of maritime law for a very long time."[218]
December 21, 2017: Chevron Phillips Completes $6 Billion Petrochemical Expansion at Cedar Bayou Complex in Baytown
The Houston Chronicle reported on December 21, 2017 that Chevron Phillips has completed heavy construction of the massive ethane cracker at its Cedar Bayou complex in Baytown. The ethane cracker - on a plot the size of 44 football fields - will separate a component of natural gas called ethane, which will provide the feedstock for some 1.5 million metric tons a year of ethylene, a common building block of plastics. The Chevron Phillips cracker includes eight giant furnaces that essentially heat up the ethane and cook it into ethylene. "With the mechanical completion of Cedar Bayou's ethane cracker, we are now on the cusp of completing the most transformative project in our company's history, our U.S. Gulf Coast petrochemical project," said Mark Lashier, president and chief executive officer of Chevron Phillips Chemical.[219]
The unit is now undergoing a series of rigorous commissioning activities, system checks and final certifications to ensure a safe and reliable start-up, and consistent, on-spec production. Once operational, the unit is expected to produce at least 1.5 million metric tons of product annually. At peak construction, approximately 5,000 workers were employed on this project, helping to spawn additional economic activity across the region. The new ethane cracker will produce valuable product for the company's ethylene business and feedstock for its ethylene derivatives businesses. The polyethylene (PE) fleet now includes the two new PE units at Old Ocean, Texas, which were also part of the U.S. Gulf Coast petrochemical project (USGC PP). These units started up in September 2017 and play a critical role in Chevron Phillips Chemical's strategic expansion to meet the growing global demand for PE. These units can produce a wide variety of high quality Marlex® polyethylene resins ranging from metallocene LLDPE film to bi-modal film and pipe products, displaying the wide capability of Chevron Phillips chemical Company's proprietary MarTech® technology. In addition to the cracker and PE units, the company has purchased nearly 3,000 newly built rail cars and constructed a state-of-the-art storage-in-transition facility to ship polyethylene via rail to customers both domestically and to ports for export around the globe.[220]
December 10, 2017: 472 Plaintiffs Join Lawsuit Against Phillips 66 over Sweeny Flooding
The Brazapot Facts reported on December 10, 2017 that 472 plaintiffs have filed a new petition against Phillips 66 and Chevron Phillips Chemical claiming that the companies caused damage to persons and property in the Sweeny area when they blocked a bayou system, causing Hurricane Harvey’s floodwaters to rise rather than drain, up from 324 in the lawsuit in September. Josh Bowlin of the Houston firm Walston Bowlin said he is in contact with dozens more residents and business owners who may join the lawsuit at a later time. Because the litigation is a mass-action lawsuit, each of the plaintiff’s claims have to be assessed individually, and only people who have joined the suit will be eligible to receive compensation through a settlement or a court action, Bowlin said. “There are 500 plaintiffs with different damages, from pecan orchards to personal effects,” Bowlin said. Bowlin said he has hired hydrologists to assess whether the bayou blockages alleged in the petition could have caused the flooding that area residents experienced. “There is a huge watershed area in that area, and remarkably the Linville Bayou acts as a drainage source for that entire area,” he said. “We are looking into mapping the entire impact of what would happen in a rainfall event such as this and how the water would be dispersed.”
Plaintiffs’ stories about the flooding have been “remarkably consistent,” Bowlin said. “I have three teams of people down there and appraising homes, and they have probably been to 125 homes,” he said. “Everyone got a little water on their property, then everything started to recede, and then overnight everyone experienced a flash flood incident.” That flooding, Bowlin said, is “consistent with damming the Linville Bayou and its tributaries around there.”
Phillips 66 did not respond to requests for comment for this story, and Chevron Phillips Chemical declined to comment because the matter is still under litigation.[221]
December 8, 2017: Phillips 66 Announces 2018 Capital Program
Businesswire reported on December 8, 2017 that Phillips 66 has announced its 2018 capital budget of $2.3 billion, which includes $1.4 billion of growth capital and $0.9 billion of sustaining capital. Phillips 66 plans $827 million of capital spending in Refining, with $541 million for reliability, safety and environmental projects. Refining growth capital of $286 million is for small, high-return, quick payout projects primarily to increase clean product yields. Projects include completion of the fluid catalytic cracking (FCC) unit modernization at the Bayway Refinery and FCC optimization at the Sweeny Refinery. The company’s expected share of WRB Refining's capital expenditures is $143 million, and includes completion of the Wood River Refinery FCC unit modernization to increase clean product yield.
In Midstream, Phillips 66 plans to invest $1.2 billion, including $1.0 billion of growth capital, in its Natural Gas Liquids (NGL) and Transportation businesses. The company is developing growth projects integrated with its existing assets and infrastructure, such as ongoing expansion of the Beaumont Terminal, additional Gulf Coast fractionation capacity, and investment in pipelines and other terminals. Phillips 66’s expected share of DCP Midstream’s 2018 capital spending is $405 million, with $350 million targeted for growth projects including the Sand Hills Pipeline expansion and two DJ Basin gas processing plants.
In Chemicals, Phillips 66’s share of CPChem’s 2018 capital expenditures is expected to be $398 million, a decrease of about 45 percent from 2017 due to completion of the U.S. Gulf Coast Petrochemicals Project. The new polyethylene units included in this project started up during the third quarter of 2017, while commissioning of the ethane cracker at the Cedar Bayou facility is expected to begin in the first quarter of 2018.[222]
December 6, 2017: Oil Refiners like Phillips 66 Will Be Big Winners Under Trump's Tax Reform Plan
Nasdaq reported on December 6, 2017 that the domestic oil and gas industry is one of the many beneficiaries of the sweeping tax reform. Under current tax law, capital expenditures cannot be tax-deducted in the year they are incurred. Consequently, U.S. companies need to plan judiciously regarding their capital expenditure. However under Trump's new tax law, companies will be able to deduct their capital expenditures from taxable income immediately, as per the provisions of the tax reform bill. This aspect of the bill hugely favors the oil industry and if it materializes companies in the space would be huge gainers.
Refiners like Phillips 66 seem to be the standout gainers from the overhaul of the nation's tax code. Should the plan go through and corporate income tax lowered from 35% to 20%, refiners are likely to experience a jump in their potential earnings.
This is because unlike crude producers and equipment makers who have been victims of the sustained period of stubborn low oil price environment and struggled to generate positive cash flows, refiners have been among the handful of energy subindustries that showed strength during the shaky period.
According to Nasdaq, the business of the downstream players is negatively correlated with crude prices. This is because the companies use oil as an input from which they derive refined petroleum products like gasoline, the prime transportation fuel in the U.S. Hence, lower the oil price, higher will be their profits. Therefore, the income from converting crude into gasoline and diesel - also known as refining margin or crack spread - has been going up over the past few quarters. Consequently, these companies - having generated positive income before taxes - are in a much better shape to take advantage of the lower corporate tax burden.[223]
December 6, 2017: Worker Burned by Sulphuric Acid at Phillips 66's Alliance Refinery
Reuters reported on December 6, 2017 that an operator was burned by sulfuric acid on Tuesday while performing maintenance on a boiler at Phillips 66’s Alliance Refinery. Phillips 66 spokeswoman Melissa Ory said a worker from the Alliance refinery was treated for minor injuries at a local hospital and released.[224]
November 21, 2017: Phillips 66 Cuts Rates at Wood River Refinery After 210,000 Gallon Keystone Pipeline Spill
The St. Louis Post-Dispatch reported on November 21, 2017 that Phillips 66 has cut run rates at its 336,000 barrel-per-day (bpd) Wood River Refinery after TransCanada's Keystone pipeline was shut last week as refinery informed personnel to be prepared for the Keystone pipeline outage to last upwards of three to four weeks, according to preliminary indications. Preparations are underway to advance work to early December on its largest 170,000 bpd crude unit with the work holding the unit to about half capacity. The crude unit work likely will begin the week of Dec. 4 and finish in two to three weeks.[225]
According to CNN, a total of 210,000 gallons of oil leaked from the Keystone Pipeline in South Dakota, the pipeline's operator. Crews shut down the pipeline Thursday morning, and officials are investigating the cause of the leak, which occurred about three miles southeast of the town of Amherst. This is the largest Keystone oil spill to date in South Dakota, Walsh said. The leak comes just days before Nebraska officials announce a decision on whether the proposed Keystone XL Pipeline, a sister project, can move forward.[226]
November 15, 2017: Tax Break Granted to Phillips 66 Billings Refinery
NBC5 reported on November 15, 2017 that Yellowstone County commissioners in Montana have approved a tax break sought by the Phillips 66 oil refinery in Billings for a project that improved the refinery's crude oil processing and sulfur recovery. The project began in 2015 and was completed in June. The project cost close to $300 million. The project qualified for the tax reduction under a county program for qualifying new or expanding businesses. Commission Chairman John Ostlund said the county traditionally has honored requests for the tax incentive and noted the large investment by the refinery.[227]
November 10, 2017: Chevron Phillips Inaugurates Two New Polyethylene (PE) Units at Old Ocean, Texas
ICIS reported on November 10, 2017 that Chevron Phillips Chemical has inaugurated two new polyethylene (PE) units at its facility in Old Ocean, Texas, each with a capacity of 500,000 tonnes/year. They are part of CP Chem’s US Gulf Coast Petrochemical Project, a $6bn investment encompassing the two new PE plants in Old Ocean as well as a new ethane cracker at the company’s Cedar Bayou facility in Texas. “Congratulations to CPChem on a milestone that is helping Phillips 66 achieve its vision of providing energy and improving lives,” said Tim Taylor, president of Phillips 66. “The two new polyethylene units on the Texas Gulf Coast will have a global impact, providing the world with plastics for everything from automobile parts to smartphones." CP Chem’s new PE plants at Old Ocean will source much of their ethylene from the existing crackers at the Old Ocean site, while the company expects to remain a merchant seller of ethylene even with the new PE capacity. Company executives stated that much of the product from the new plant will be destined for export, although the percentages likely to be exported are not as high as many market participants had been anticipating for new US PE facilities. Exports will be shipped to whichever region of the world provides the best netback, with the company adding that the Old Ocean facility is among the most efficient and competitive PE plants currently operating in the global marketplace.[228]
November 6, 2017: Approval of Phillips 66 Pipeline's 60,000-gallon Butane Tank has Jenks City Councilor Concerned
The Tulsa World reported on November 6, 2017 that Jenks City Councilor Robert Lee can’t figure out how Phillips 66 Pipline Co putting a 60,000-gallon butane tank so close to soccer fields, an education facility and a major roadway makes sense but Jenk's City Council's 4-3 vote gave Phillips the permit it needed to add a butane-blending operation to its distribution terminal at 10600 S. Elwood Ave. “This decision truly does not benefit any one individual in the city of Jenks or the city of Jenks,” said Lee. “It just benefits (Phillips), and that is why I am so disappointed in their decision.” In a worst-case scenario, Lee said, the tank could blow up, creating a mile-wide “blast zone” that would engulf residential neighborhoods, the Titan Sports and Performance Center and Jenks Public Schools’ Agricultural Science Center.
Dennis Nuss, director of media and external relations for Phillips 66, said the company is upgrading several facilities around the country with butane-blending operations. “Adding butane to gasoline brings the mixture up to state and federal motor fuel volatility limits, which vary seasonally,” Nuss said. “Similar facilities have existed in the Tulsa area for years.” Jenks Assistant Fire Chief Greg Ostrum said Phillips 66’s new facility will be required to meet eight or nine national fire codes in addition to Jenks’ code. “We are not breaking ground here,” he said. “There are safety standards that have been established for this kind of project.”[229]
November 6, 2017: A $6 Billion Windfall for Oil Refiners like Phillips 66 Has Small Hurdle: the IRS
Bloomberg reported on November 6, 2017 that an obscure gasoline additive called butane -- a liquefied petroleum gas, could lead to a windfall of more than $6 billion for struggling U.S. oil refiners. Refiners like Phillips 66 are examining whether their occasional use of butane qualifies for a big tax credit under a now-expired law that was intended to promote the use of cleaner-burning fuels sold at the pump. Refiners usually add butane to gasoline during winter months to help comply with government limits on smog-causing emissions. “There’s a way to construct the argument that you’re entitled to this credit if you mix butane,” says Houston-based tax attorneys Shawn R. O’Brien. “And because that’s a common mixture, people in the industry are looking at it as a huge opportunity.”
While the industry and even some IRS guidelines identify butane as an LPG, the agency has indicated that the definition shouldn’t apply under the alternative-fuel-mixture credit. The IRS is reviewing the matter and seeking public comment before issuing a final ruling. Applying for the credit is no guarantee of success. Sunoco Inc., a gasoline marketer and wholesaler that runs filling stations and convenience stories, tried to recover $300 million in refunds last year for mixing ethanol with its fuel. The U.S. Court of Federal Claims favored the government in a November 2016 order, saying Sunoco’s interpretation “would result in a windfall that Congress did not intend.”
Phillips 66, Marathon, Exxon Mobil, Valero, and Chevron declined to comment on the issue.[230]
October 31, 2017: Phillips 66 Santa Maria Refinery Donates $25,000 to Arroyo Grande High
KSBY reported on October 31, 2017 that Phillips 66 donated 25,000 to the Architecture and Engineering Program at Arroyo Grande High School. The money will be used for software, technology, equipment and to fund industry field trips, said Amy Jacobs, communications coordinator for the Lucia Mar Unified School District. After the check was presented, Phillips 66 offered students advice about careers in a STEM-related (science, technology, engineering and math) field.[231]
Businesswire reported on October 27, 2017 that Phillips 66 announced third-quarter 2017 earnings of $823 million, compared with $550 million in the second quarter of 2017. Excluding special items, adjusted earnings were $858 million, compared with second-quarter adjusted earnings of $569 million.
“We operated well during the quarter while facing the challenges associated with Hurricane Harvey,” said Greg Garland, chairman and CEO of Phillips 66. “While the storm impacted our Gulf Coast operations, we delivered strong financial results from our diverse business portfolio. We are proud of how our employees responded during the storm. They assisted families, friends and neighbors and worked tirelessly to safeguard our assets and communities. Through their efforts, we were able to ensure business continuity and supply critical energy products to first responders and consumers.”
“During the quarter, we funded $367 million of capital expenditures and returned $817 million to shareholders through dividends and share repurchases,” added Garland. “Earlier this month we also announced a new $3 billion share repurchase program, increasing total authorizations to $12 billion since 2012. Prudently managing capital allocation and delivering shareholder returns remain fundamental to Phillips 66.”[232]
October 27, 2017: Phillips 66 to Begin Diesel Recovery Project at Ponca Refinery in 4th Quarter
Greg Garland announced during the Q3 earnings conference on October 27, 2016 that a diesel recovery project in the Ponca City Refinery is on track to start up in the fourth quarter.[233]
October 22, 2017: Ponca Nation and Movement Right Organizes Prayer Walk to Ponca Refinery to Protest Fracking
Intercontinental Cry reported on October 22, 2017 that after suffering for years with poisoned water and serious health issues due to fracking and injection wells on and near their reservation the governing body of the Ponca Nation of Oklahoma voted to pass a statute recognizing the rights of nature on Friday, October 20, 2017. When enacted, the Ponca will be the first tribal nation to recognize the rights of nature into statutory law. "On Friday, October 20th the Ponca Tribe of Oklahoma took the historic step of agreeing to add a statute to enact the Rights of Nature. We are proud to be moving into the future by honoring our original instructions to respect all life on our Mother Earth,” said Casey Camp-Horinek, a member of the Ponca Tribal Business Council.
According to Movement Rights, Ponca City, Oklahoma is the epicenter of earthquakes caused by fracking and injection wells. Tribal members have experienced diseases that have decimated their population since the fracking industry began in their area. Every single water well on the reservation is too toxic to drink, bathe in or allow pets and livestock to drink. There have been 448 earthquakes in and around the Ponca reservation this year, in a state that was essentially earthquake free before the fracking industry moved in to the area. The Ponca Nation is expected to enact the Rights of Nature Statute into law by the end of 2017. “We all know that water is life. The years of fish kills related to the fracking and injection wells amount to environmental genocide,” said Casey Camp-Horinek. “It is going to take all of us humans because we’re speaking for those without voices, for the deer, the cattle, those that fly. In our tribe we have a funeral a week now. We’re being fracked to death and It’s time to take a stand for our people and defend the earth.”
The Ponca Nation and Movement Rights also conducted two events which took place on Saturday, October 22nd called “Ponca Environmental Community Action Day”. The day included a prayer walk to the Phillips 66 refinery in the City of Ponca as well as a community meeting. "I feel like we are gaining strength, we had more tribal nations represented this time as well as non-natives,” said Ponca Tribal member, Suzaatah Williams. “We had elders and even a newborn on this walk and every age group in between. Even if only one of these people share the information they learned we have made a difference. Knowledge is power and we are only getting stronger!”[234]
October 21, 2017: Ponca City Mourns the Passing of Dr. S. J. Pickens
Dr. S. J. Pickens of 2301 Donner Ave in Ponca City passed away unexpectedly of natural causes at age 73 on October 21, 2017. Dr. Pickens was born in Philadelphia, PA on Sunday, June 11, 1944 to Mildred Lurene Shields and Sidney James Toombs Sr. Dr. Pickens grew up on the 2100 block of Diamond Street and the 2400 block of 29th Street in Philadelphia.
The Rules of the Shields Family
Dr. Pickens was proud of her family. In 1900 her grandfather Norwood Shields who she loved dearly was one of the first black men to graduate with an advanced degree from Cornell University. His first job was in Indian Territory at Langston College where Dr. Pickens' mother Mildred was born in 1907. Her grandfather later moved from Langston to Wilberforce, Ohio where he was a professor of agriculture at Central State College. Dr. Pickens and her beloved older brother Sidney loved to spend summers with their grandparents in Wilberforce, Ohio where they were taught the three cardinal rules of the Shields Family.
- Rule 1. Accept whatever comes without complaint
- Rule 2. Always exceed everyone's expectations including your own
- Rule 3. Play the hand you are dealt - and play the hell out of it.
Education
Dr. Pickens graduated from Germantown High School in Philadelphia and received her bachelor's degree from Temple University in 1965.
One of the proudest events of her life occurred in 1963 when Dr. Pickens traveled to Alabama with freedom riders to help register black residents to vote and to integrate lunch counters. Dr. Pickens marched with King in Alabama and attended Dr. King's March on Washington. She said that she never thought she would live to see a black President but forty-five years after the March on Washington Dr. Pickens traveled to Washington DC with her husband to attend Barack Obama's inauguration on the mall in Washington DC.
In 1979 Dr. Pickens entered Medical School at the University of Maryland and was the oldest member of her graduating class. She earned both her M.Ed. and M.D. degrees from the University of Maryland. While in residency at the University of Maryland's Institute of Psychiatry and Human Behavior, she was selected as a Falk Fellow and is the recipient of the Brody Award.
Life Story
Upon completion of her residency in psychiatry at University of Maryland Medical School, Dr. Pickens spent 10 years working in the Maryland State Health System as Clinical Director at Springfield Hospital and at Spring Grove Hospital.
Dr. Pickens married Hugh Pickens on December 24, 1984 with whom she recently celebrated 32 years of marriage. They lived in a 125 year old Victorian Mansion in Baltimore for 20 years.
In 1989 Dr. Pickens was president of Pickens Comprehensive Health Services, a health care company serving the inmate population of the Baltimore City Jail. Dr. Pickens spent the last years of her professional career as Vice President of physician services at Green Spring Health Services, Inc., where she supervised fifty physicians and nurses.
Dr. Pickens was a board member of Friends Psychiatric Research Associates; is the past president of the Black Psychiatrists of America, Maryland Chapter, past president of Maryland Black Faculty and Staff, an examiner for the American Board of Psychiatry and Neurology, and a member of the American Psychiatric Association and Southern Psychiatric Association. Dr. Pickens was inducted into the American College of Psychiatry in 1996, one of only three physicians in the state of Oklahoma who have been so honored.
In 1999 Dr. Pickens retired and in 2005 decided to make her home in Ponca City, her husband's home town. Dr. Pickens was active as a docent at the Marland Mansion, served on the board of directors of Ponca Playhouse, and with her husband sponsored and produced the annual "Oklahoma Pride" series at Ponca Playhouse producing "The Broken Statue" and "Lydie Marland in the Afterlife." Dr. Pickens was also active in Newcomers.
Dr. Pickens was one-quarter Cherokee and after moving to Oklahoma she took up collecting and designing Native American jewelry and artwork, putting together one of the finest collections of turquoise jewelry in the United States.
For thirty years in Baltimore, Dr. Pickens opened her home for Halloween when she invited children into her home to learn about crystal and fine art. The tradition continued in Ponca City where for the past twelve years she has distributed rolls of pennies to children and as she remembers their names from year to year and talks to them about their lives. In 2016 over 450 children visited her home during Halloween. The Pickens family will be continuing Dr. Pickens' Halloween tradition.
Dr. Pickens was especially proud to have sponsored the first formal dinner in the Marland Mansion in 70 years when she and her husband invited ten guests to share dinner at the mansion with her in 2016.
Survivors
Dr. Pickens is survived by her husband Hugh Pickens, her stepdaughter Carolina Pickens Jachnke of Rohnert Park, CA, her stepson Daniel Pickens of Stockholm Sweden, and step-grandchildren Keanu Jachnke Pickens of Rohnert Park, and Lily Jane Pickens, and Rory James Pickens of Stockholm.
In addition she is survived by her nephew Sidney Jack Toombs III and his wife Lisa Toombs and two grandnieces Nia Nicole Toombs and Winter Joy Toombs, all of Philadelphia; by her niece Celeste Toombs of Durham, North Carolina; by her niece Stephanie Rose Jones and her husband Rahsaan Jones of Snellville, Georgia; by her cousin Strawberri Lucas of Newark, New Jersey; by her cousin Leonard Blake and his wife Barbara Blake of Columbus, Ohio; by her cousin Norwood Rainey, of Tuscon, Arizona; by her cousin, Sandra Fisher, of Los Angeles, California; and by numerous other relatives including Atreva and Clyde Vaughn Jr., Delena D. Johnson, Pamela Blake, Patricia Blake-Smith and Jonathon Smith, Lavern Williams, and Gwendolyn and Marcel Hollenger, and several other relatives.
Additionally she is survived by her sister-in-law Gail Pickens-Barger and her husband Steven Barger of Port Neches, Texas. Her nieces Amber Barger & her husband, Caveh Masem of Houston, Texas; Rachel Barger Turnley & her husband David C. Turnley of Ann Arbor, Michigan; Derek Barger of Houston, Texas; and Grace Barger of Port Neches, Texas. A great-niece, Dawson Elizabeth Turnley of Ann Arbor, Michigan.
Dr. Pickens is survived by her mother-in-law, Deloris Pickens of Ponca City, Oklahoma.
Dr. Pickens was preceded in death by her mother Mildred Lurene Shields, father Sidney James Toombs, and older brother Sidney James Toombs II.
Invictus
Before she went to Alabama in 1963, where she was assaulted for desegregating lunch counters, her father told her never to flinch when she was struck by segregationists and to turn the other cheek when she was beaten. Before she left for the South, her father made her commit to memory the poem Invictus by William Ernest Henley which was her favorite poem and sums up her life.
Invictus by William Ernest Henley
Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.
In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.
Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds and shall find me unafraid.
It matters not how straight the gate,
How charged with punishments the scroll,
I am the master of my fate,
I am the captain of my soul.
Reference
- Facebook - "Ponca Playhouse Mourns the Loss of Dr. S. J. Pickens" October 22, 2017
- Dr. Pickens sponsors first formal dinner at Maryland Mansion in 75 years December 18, 2016
- Dr. Pickens sponsors and produces "Oklahoma Pride" series at Ponca Playhouse
- Obituary in the Ponca City News October 24, 2017
October 20, 2017: Will Warren Buffett Acquire Phillips 66?
Aristofanis Papadatos wrote an interesting essay at Seeking Alpha on October 20, 2017 whee he makes the case that Phillips 66 may become Warren Buffett's next takeover target. Buffett's Berkshire Hathaway already has a significant 16% stake in Phillips 66, which it essentially started to build in 2015 and since the initiation of the stake, Berkshire has consistently increased it and Buffett has repeatedly praised the management of the company as exemplary. "While a 16% stake is far from a takeover, Berkshire has acquired in the past some companies in which it initially purchased only a stake," says Papadatos. "For instance, this proved to be the case in 2010, when Berkshire acquired Burlington Northern Santa Fe for $26 billion. The same was witnessed in 2011, when the giant conglomerate acquired Lubrizol."
According to Papadatos, Phillips 66 has many features that Buffett looks for in his takeover scope. First of all, Buffett puts great emphasis on the quality of the management. Second, Phillips 66 has a great record of investing only in projects with attractive returns. Finally, the company has a strong balance sheet, which is of great importance to Buffett. "Phillips 66 has many attractive features, which fit the requirements of Buffett," concludes Papadatos. "It is reasonably valued while it also has an exemplary management, which always maintains a long-term horizon and ensures for great project execution. In addition, while the future path of the oil price is unknown, the company is well positioned for every price scenario, as each of its segments thrives under different oil prices. Therefore, the company has good chances of being acquired by Berkshire at some point in the future."[235]
- See also Warren Buffett Files with SEC to Purchase Up to 25% of Phillips 66 Stock March 3, 2016
- Is Warren Buffett Planning to Buy Phillips 66 February 12, 2016
October 18, 2017: Opponents of Phillips 66 Funded Bayou Bridge Pipeline Push for Study Request
WRKF reported on October 18, 2017 that environmental groups in Louisiana, like the Louisiana Bucket Brigade and BOLD Louisiana, oppose the proposed 162-mile pipeline,funded in part by Phillips 66 and are spending their lunch hours demonstrating in front of the Governor's Mansion every Tuesday this month. They're asking the governor to request an environmental impact study from the Army Corps of Engineers before allowing the pipeline, which will cross 11 parishes and the Atchafalaya Basin, to proceed. Louisiana Governor Edwards says while he understands many are passionately opposed to this pipeline, it's not crossing virgin territory, so to speak. It will be constructed adjacent to other pipelines already in place across the Atchafalaya. “I believe pipelines can be built – if all of the regulations and permit requirements are followed – in a way where you don’t interfere with the flow of water and the movement of wildlife,” Gov. Edwards states.
But Cherri Foytlin, BOLD's state director, notes Energy Transfer Partners, responsible for this pipeline and the Dakota Access pipeline, has a dismal track record with rules and safety. “Florida Pipeline, which is already in the Basin, and owned by Energy Transfer Partners, is already out of compliance. The Dakota Access Pipeline leaked three times – three times already!” she says. “And Phillips 66, another partner in Bayou Bridge, had a pipeline fire just this past February, which injured two workers and killed a third.” Foytlin suggests the state could use the time they’re waiting on the environmental impact study to urge the companies involved to actually follow the rules. “We have actually really good laws on the books. It’s just this state doesn’t tend to hold companies accountable to do what they’re supposed to do,” Foytlin says.” I don’t think it’s too much to ask that this industry – but in particular this company – cleans up its mess in the first place before they’re allowed to do another project. I mean, I would make my kids clean up before they get more toys out, right?”[236]
October 12, 2017: Phillips 66 Retirees Sue Phillips 66 Retirement Plan Investment Committee for Failing to Provide a Wider Array of Investment Offerings in the Company's 401(K) Retirement Plan
The Houston Chronicle reported on October 12, 2017 that three retirees who are seeking to represent about 12,000 other plan participants sued the retirement plan investment committee of Phillips 66 for failing to provide them a wider array of investment offerings in the company's 401(k) retirement plan. Plan sponsors have a fiduciary responsibility to provide a diversified mix of investment options. Plan participants have funneled more than $1 billion into ConocoPhillips stock, representing about 25 percent of the plan's total assets. Many more have invested their retirement savings in Phillips 66 stock. Taken together, plan participants have put more than half their retirement assets into the stock funds of the two energy companies. It's too risky to put so many assets into one industry, especially one as volatile as energy, said Connecticut commercial litigator Robert Izard whose three clients allege the Phillips 66 retirement plan breached its fiduciary duty by allowing the plan to hold massive amounts of ConocoPhillips stock. The Phillips 66 investment committee should have but did not launch an independent review after ConocoPhillips spun off Phillips 66, a failure that cost the plan participants millions of dollars during the times when the price of ConocoPhillips' stock fell, according to the lawsuit. The retirees are seeking unspecified lost profits.
Phillips 66 said it would not comment on the lawsuit.[237]
October 10, 2017: OU Dedicates Dunham College Funded by Gift From Archie Dunham
The Norman Transcipt reported on October 10, 2017 that the University of Oklahoma will dedicate the Residential Colleges, Dunham College and Headington College, which serve as living-learning communities and the cornerstone of the undergraduate experience, at a public ceremony scheduled for 4 p.m. on Wednesday, Oct. 11 at 1406 Asp Ave. Patterned after those at Harvard, Yale, Oxford and Cambridge, OU is the first university in the state and one of the first public universities in the nation to adopt the residential college model. The Residential Colleges provide an intimate and supportive community designed to promote the social, intellectual and personal growth of OU undergraduates.
Archie Dunham and his wife have been longtime friends of OU, often hosting student scholarship and alumni events. Dunham, who was born in Durant and raised in Ada, earned a Bachelor of Science degree in geological engineering from OU in 1960 and a master of business administration degree from OU in 1966. Linda Dunham, who also grew up in Ada, attended East Central University. After graduating from OU, Dunham went to work for Conoco Inc., where he rose rapidly through the ranks and served in almost every area of the company. He was elected to the Conoco Board of Directors in 1985 and became president and CEO in 1996. He was elected chairman of the board in 1999. Dunham is the recipient of OU’s highest award, an honorary doctorate of humane letters.[238]
October 8, 2017: Phillips 66's Alliance Refinery Undamaged After Hurricane Nate
Reuters reported on October 8, 2017 that Phillips 66’s Alliance Refinery was undamaged by the passage of Hurricane Nate on Saturday night and may begin restarting some units on Sunday, sources familiar with plant operations said. It may be mid-week at the earliest before the refinery resumes production. There is limited crude oil availability following the shutdown of 92 percent of crude oil production in the Gulf of Mexico, the sources said.[239]
October 7, 2017: Phillips 66 shuts Alliance Refinery Ahead of Hurricane Nate
Reuters reported on October 7, 2017 that Phillips 66 shut its Alliance Refinery ahead of the approach of Hurricane Nate, sources familiar with plant operations said. Only the boilers and the wastewater treatment system are still in operation at the refinery, the sources said. Alliance Refinery was not affected by August’s Hurricane Harvey, which shut all Texas Gulf Coast refineries, accounting for about a quarter of U.S. capacity.[240]
October 2, 2017: Phillips 66 Oil-by-Train Plan to Santa Maria Refinery is Dead Say Environmental Groups
The San Luis Obispo Tribune reported on October 2, 2017 that Phillips 66's plan to transport crude oil by rail to its Santa Maria Refinery is dead, environmental groups say, after the company agreed to drop its lawsuit against San Luis Obispo County. If the settlement is approved by the court, the county’s denial of the project will stand, said county attorney Tim McNulty. “I can say with 99.9 percent certainty this is the end of the track for more oil trains in San Luis Obispo County,” said Andrew Christie with the Santa Lucia Chapter of the Sierra Club. “Projects never fail just because they’re ill-conceived, especially when they’re proposed by large, well-funded entities,” Christie said. “The only way those projects fail is thanks to grassroots organizing and local people saying loud and clear, ‘We don’t want this project.’ And that happened on a scale I’ve never seen before.” Phillips 66 officials declined to comment Monday on what McNulty called a settlement.[241]
September 29, 2017: Homeowners Near Sweeny Refinery File Lawsuit, Say Phillips 66 and Chevron Phillips Knowingly Forced Floodwaters into their Neighborhood
CBS News reported on September 29, 2017 that the Army Corps of Engineers is investigating claims by residents of Sweeny, Texas, that floodwaters were knowingly forced into their neighborhoods when Phillips 66 and Chevron Phillips dammed up two bayous. A lawsuit filed by about 324 families claims that by damming two nearby bayous without warning, the companies knowingly pushed floodwater away from the plant and into neighborhoods. Video shows how the plant stayed dry – and left homes under water. "It was full. I mean, it was almost to the top of where we're standing right now," said lawyer Josh Bowlin. Bowlin represents the families now suing the Phillips 66 and Chevron Phillips. He showed one spot that was dammed and a video of the backhoe that was used to remove the blockage. "I've talked to so many people that if they just had a little bit of notice they could have saved so much," Bowlin said.
Chevron Phillips did not respond to repeated requests for comment. But in a statement, Phillips 66 said, "Our priorities during the flood were to protect people and the environment...we do not believe these actions on one side of our property impacted the ongoing flooding event adjacent to the refinery or in the community." "I apologize for the profanity but that's a bunch of bull**** straight up. They made a conscious decision to save their plant but those actions have consequences and they need to be held responsible for those actions," said David Harquist. Residents say disaster struck after the storm had moved on. Floodwaters stopped receding and began rising again -- this time, into the house. "I was shocked. I was like what in the world is going on and then all of the sudden the water came up and it started coming up quickly," Harquist said.[242]
According to the Brazaport Facts, the petition alleges Phillips 66, Chevron Phillips and Chevron Phillips Chemical Co. caused flooding in areas near Phillips 66’s Old Ocean refinery by erecting dams on the Linville Bayou and Little Linville Bayou “in the dark of night,” starting August 30, 2017. “These dams gave the water flowing downstream nowhere to flow, except to flood the land and its people surrounding the Sweeny Refinery,” the petition states. Refinery employees “never warned a single Sweeny resident of the imminent danger upon them,” the petition states. The petition also claims “multiple chemical and petroleum spills occurred in Sweeny Refinery and were threatening contamination in the flowing waters.” Bowlin said the contaminants included the carcinogen benzene and wastewater, though analyses of the contaminants still are ongoing. Bowlin said he witnessed the blocked bayous first-hand and is confident evidence will show the refinery’s managers to have been at fault. The dams constructed by refinery workers contributed to flooding in an area that stretched as far north as FM 1301 and as far south as FM 521, Bowlin said. More than 350 residents and businesses have joined in a lawsuit claiming the actions at a Sweeny-area industrial site caused their properties to flood, and that number likely will grow, said Bowlin .[243]
The plaintiffs claim Phillips 66 employees erected temporary dams at the Linnville and Little Linnville bayous to prevent petroleum and chemical leaks at its Sweeny refining and petrochemical complex. The lawsuit alleges the Houston-based energy giant knew the efforts would cause nearby homes to flood, but that they did so anyway without notifying local communities. The lawsuit alleges that Harvey passed through the Sweeny area without causing any significant flooding, leaving residents to believe their properties survived intact. "They were wrong," the suit asserts. Phillips 66 built dams "in the dark of night" on August 30 to protect its massive refining complex. The suit contends that, because of the dams, the water level in Sweeny kept rising and flooded many homes, trapping people inside of their houses. "Unforgivably, defendants never warned a single Sweeny resident of the imminent danger upon them," the lawsuit claims. "Instead, defendants sat quietly even though their hydrologists had told them the town was going to flood because of the dams."[244]
September 22, 2017: Phillips 66 Unloads Stake in Controversial Dakota Access Pipeline to its MLP
24/7 Wall Street reported on September 22, 2017 that Phillips 66 has agreed to sell its 25% stake in the controversial Dakota Access Pipeline (DAPL), its stake in another company that holds a 25% stake in the Bakken Pipeline and 100% of its interest in a coking unit at its Sweeny refinery, to its midstream partner, Phillips 66 Partners L.P. for a total consideration of $2.4 billion. Phillips 66 Partners plans to fund the $1.7 billion cash portion of the transaction with a combination of debt, private placement of common units, and additional units valued at $240 million issued to Phillips 66. The master limited partnership (MLP) also will assume $625 million of Phillips 66 Bakken Pipeline debt and $100 million of Phillips 66 debt on the coking unit. "This is the largest acquisition PSXP has made to date," said Phillips 66 CEO Greg Garland. "This acquisition supports our EBITDA growth objective by adding solid fee-based assets to the Partnership and keeps us on track to deliver our 30 percent distribution growth target. To meet our $1.1 billion of annual run-rate adjusted EBITDA goal by the end of 2018, we do not anticipate accessing the equity market, other than through selective use of our at-the-market program."[245]
September 20, 2017: Ponca Refinery Begins Biggest Turnaround Since 2011
The Ponca City News reported on September 20, 2017 that Ponca Refinery's turnaround this fall will take approximately 42 days and three primary operating units are impacted in the largest event for the Ponca City Refinery since 2011. The 2017 turnaround will affect three major operating areas and has been in the planning stages for the past 6 years. Along with the maintenance work in the Turnaround, the final tie-ins associated with a major upgrade project to modernize one of the older areas in the refinery will be completed. Turnarounds require a greater work force and the cost of upgrades is estimated to be over $50,000,000. What makes this Turnaround “big” is the number and complexity of operating units impacted. Typically, one unit is shutdown at a time, and the number of additional employees needed to get the work done in the time allotted to do the projects is much less. In addition to the employees and contractors working routinely at Phillips 66 they will have just over 1,800 additional contract employees working in various capacities and it is estimated that contract employees coming into Ponca City for this turnaround will have an economic impact on the community of over five million dollars ($5,000,000).[246]
September 20, 2017: Hurricane Harvey Delays Large Part of $6 billion Chevron Phillips Expansion at Sweeny Complex
My San Antonio reported on September that a large portion of Chevron Phillips' $6 billion expansion at Sweeny Complex is being delayed until next year after Hurricane Harvey's floodwaters created additional problems. The larger Baytown portion of the expansion project, which was originally expected to be finished by now, won't be completed until next year, Chevron Phillips said. The project involves a massive ethane cracker - on a plot the size of 44 football fields - that will separate a component of natural gas called ethane, which will provide the feedstock for some 1.5 million metric tons a year of ethylene, a common building block of plastics. Chevron Phillips said it is now on track to be finished by the end of March with it achieving full production by mid-2018.[247]
September 20, 2017: Phillips 66 is Selling Their StorageTek Campus in Louisville Colorado
The Denver Post reported on September 20, 2017 that Phillips 66 is selling their 432 acre StorageTek campus in Louisville to California’s Bancroft Capital, which is using it to woo Amazon as the web retail giant hunts for a second headquarters. “We’ve been chasing this deal for a decade and a half,” said founder Doug McDonald. “Amazon is a great fit for Boulder County and could be a game-changer for public transportation and connectivity.” Conoco, then ConocoPhillips, bought the property in 2008 for $58.5 million, with plans to turn the former Storage Technology/SunMicrosystems campus into a world-class research and training campus focusing on sustainable energy.[248][249]
September 19, 2017: Phillips 66 Alliance Refinery Donates $30,000 grant to the Coalition to Restore Coastal Louisiana (CRCL)
The Plaquemines Gazette reported on September 19, 2017 that Phillips 66 has made a $30,000 grant to the Coalition to Restore Coastal Louisiana (CRCL) to fund a major habitat restoration project in Plaquemines Parish. On Sept. 9, more than 30 Phillips 66 Alliance Refinery employees and volunteers from the local area took part in a planting event at the Bayou Dupont Terrace Project. The group planted 4,500 plugs of native marsh grass which will help redevelop part of our coastline and provide improved natural flood defense.[250]
September 14, 2017: Texas Homeowners Sue Phillips 66 over Flooded Homes near Sweeny Refinery
ABC Channel 13 reported on September 14, 2017 that homeowners in Brazoria County have filed a lawsuit against Phillips 66 alleging that Phillips intentionally dammed the area around Sweeny Refinery with concrete and boxcars, directing the flow of water into residential areas in Sweeny and nearby Magnolia during Harvey. Plaintiffs also claim the water was contaminated with chemicals from the refinery and are asking for cash damages.
Phillips 66 released the following statement to ABC13 regarding the lawsuit: "Phillips 66 is committed to protecting the health and safety of the people involved in our operations and in the communities where we operate. During severe weather events like Hurricane Harvey, we have plans in place to protect our employees, our facilities and our communities. We are aware of concerns from the community suggesting that our actions to protect the refinery contributed to additional flooding in the area. We do not believe that to be the case, however, we are investigating the issue and have been working with local authorities. Although we experienced significant flooding in the refinery, our actions minimized the potential for release of feedstocks and products that could have negatively impacted the community and the environment."[251]
September 14, 2017: Chevron Phillips Chemical Anticipates a Delay in Startup of its New 1.5 million tonne-per-year Ethane Cracker in Cedar Bayou
Chemistry World reported n September 14, 2017 that Chevron Phillips Chemical anticipates a delay in startup of its new 1.5 million tonne-per-year ethane cracker in Cedar Bayou because of damage by Harvey. The cracker was expected to be completed this year, but rains left parts of the facility under five to eight feet of water. "We’re just now getting back into the facility to evaluate the recovery efforts there, and I don’t have a forecast yet,’ Phillips 66 chairman Greg Garland told the Barclays conference. Garland said the cracker itself faced ‘very limited damage,’ but the contractors working on the project have been off for weeks since the storm."[252]
September 12, 2017: Sweeny Refinery Has Restarted
Phillips 66 announced at their Operations Information Center on September 12, 2017 that operations have resumed at the following sites that were impacted by Harvey:
- Sweeny Refinery has restarted.
- The Phillips 66-operated Pasadena refined products terminal and connecting pipelines.
- Beaumont Terminal.
- Freeport Terminal.
- Gulf Coast Fractionators facility in Mt. Belvieu[253]
September 6, 2017: Sweeny Refinery to Return to Full Production by Mid-September
Reuters reported on September 6, 2017 that Phillips 66 says Sweeny Refinery will return to full production by mid-September.[254]
September 6, 2017: 25-50 Gallons Of Oil Spilled In Leak Near Phillips 66 Rodeo Refinery
CBS Channel 5 reported on September 6, 2017 that an estimated 25 to 50 gallons of oil apparently leaked from a pipeline, causing a spill into San Pablo Bay near the Phillips 66 refinery. Crews from the Coast Guard and the Fish and Wildlife’s Office of Spill Prevention and Response searched the area but did not find any signs of an oil sheen or visibly oiled wildlife. The environmental group Center for Biological Diversity issued a statement about the spill and criticized a proposal being considered by the Bay Area Air Quality Management District to allow the oil company to more than double the number of oil tankers allowed to make deliveries at the Rodeo refinery. “Harmful oil spills are becoming all too common for refineries in the Bay Area,” the center’s statement said. “Why would the air district allow Phillips 66 to double the number of oil tankers coming into the Bay? The next accident could be bigger and spill dirtier oil, which would spell disaster for our beautiful Bay and the communities around the refinery.”[255]
September 5, 2017: Phillips 66 Donates $4 million to Harvey Relief Efforts
Bartlesville Radio reported on September 5, 2017 that Phillips 66 announced it will contribute an additional $3 million to assist Hurricane Harvey relief efforts in southeast Texas. The donation will be shared equally by the Rebuild Texas Fund, United Way of Greater Houston and the American Red Cross and will bring Phillips 66’s total contributions to $4 million since the storm. Phillips 66 CEO Greg Garland says officials thoughts and prayers continue to be with all those affected by the unprecedented disaster, including many employees, friends and neighbors across southeast Texas. Garland says we recognize the road to recovery will be long, but remain deeply committed to helping communities rebuild.[256]
September 3, 2017: Phillips 66 Assesses Damage at Sweeny Refinery After Tropical Storm Harvey
Reuters reported on September 3, 2017 that Phillips 66 says that 600 people are at Sweeny Refinery assessing and repairing damage from Tropical Storm Harvey in preparation for restarting the plant.[257]
September 3, 2017: Phillips 66 Requests Jones Act Waiver to Supply Alliance Refinery
Reuters reported on September 3, 2017 that Phillips 66 has requested a Jones Act waiver to allow it to use foreign vessels to move crude or products to and from its 260,000-barrel-per-day Alliance refinery in Louisiana after Hurricane Harvey. The Jones Act requires all goods transported by water between U.S. ports be carried on U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens. Waivers can only be granted based on interest of national defense such as national emergencies.[258]
September 2, 2017: Workers Repair Levee Breach Near Phillips 66 Alliance Refinery
WDSU reported on September 2, 2017 that Plaquemines Parish officials are working to repair a levee that breached near Phillips 66's Alliance Refinery during tidal surge caused by Hurricane Harvey. Parish officials said the breach does not pose a risk of flooding to homes or Louisiana Highway 23 near the refinery. Officials said the land is remote and not easily accessible. Parish and DOTD personnel spent the day filling Hesco Baskets and transporting them to the landing zone to stage for air operations while a barge arrived carrying rocks that will be used in the repair. Crews will begin placing the rocks into the breach throughout the night, officials said.
This is not the first time the levee has breached. In 2016, the Louisiana National Guard helped the parish place sandbags to repair the levee. Officials said the breach grew to about 70 feet wide when the levee broke last spring.[259]
September 1, 2017: Phillips 66 Lake Charles Refinery Stays Open After Harvey by Tapping Into US Strategic Petroleum Reserves
The Houston Chronicle reported on August 31, 2017 that Phillips 66 says their Lake Charles Refinery is still running, and that Phillips 66 is taking 500,000 barrels of oil from the Strategic Petroleum Reserve's West Hackberry site that's just south of Lake Charles in Louisiana to keep its crude supplies going while many of the pipelines from Texas are shuttered. "The SPR release will help ensure that we can maximize our refined product supply in order to provide reliable energy during a difficult time that includes supply and logistics challenges following Hurricane Harvey," Phillips 66 said. More than 20 percent of the nation's oil refining capacity is currently offline because of Harvey with Texas outages from Corpus Christi to Houston to Port Arthur. That includes Phillips 66's Sweeny refining campus and Citgo's Corpus Christi refinery.[260]
Platts reported on September 1, 2017 that Phillips 66's Lake Charles Refinery is no longer cut off from tanker deliveries now that the Calcasieu Ship Channel and Lake Charles port have reopened, eliminating the need for further SPR loans. Phillips 66 spokesman Dennis Nuss said the refinery decided it no longer needed to borrow the additional 300,000 barrels of sour crude allocated by DOE. "As certain things open back up, then that would obviously help our supply and we wouldn't need it all," Nuss said. The loaned government crude was already flowing by pipeline from the SPR's West Hackberry cavern to the nearby refinery Thursday. "That's happening pretty quickly. It's in progress," Nuss said.[261]
August 27, 2017: Phillips 66 Shuts Down Sweeny Refinery after Tropical Storm Harvey
Fox Business reported on August 27, 2017 that Phillips 66 is shutting down its 247,000-barrel-a-day Sweeny refinery near Houston due to possible flooding in the area and to keep employees safe."We are continuously monitoring the progress of Tropical Storm Harvey and preparing for potential flooding over the next several days," the company said in a statement on its website. "To ensure the safety of our employees and due to expected flooding in Brazoria County, we have initiated a shutdown of our Sweeny Refinery in Old Ocean, Texas."[262] Chevron Phillips has also shut down its massive Cedar Bayou petrochemical complex in Baytown as flooding overtook much of the Houston region.
The Lake Charles Refinery and Alliance Refinery and other refined product terminals in the Gulf Coast region continue to operate.
August 15, 2017: Hancock College Receives $25,000 donation from Phillips 66 Santa Maria Refinery
The Santa Maria Times reported on August 15, 2017 that Hancock College received a $25,000 donation from Phillips 66 to support students seeking degrees in science, technology, engineering and mathematics (STEM). Designed as a four-day orientation to introduce freshmen and their parents to STEM education, the program features hands-on activities and presentations focusing on topics such as applying for financial aid, transitioning from high school to college and highlighting student resources. As part of the program, students will tour the Phillips 66 refinery in Santa Maria.[263]
August 13, 2017: Frank Phillips Historic Home Saved by Bartlesville, Phillips Foundation
The Tulsa World reported on August 13, 2017 that serious budget cuts have forced the Oklahoma Historical Society to give up operation of the Frank Phillips Home, one of the state’s most significant historic homes but the Frank Phillips Foundation, owner and operator of Woolaroc, is taking over a lease on the historical home in Bartlesville and is actively working to fund an operating endowment to preserve it for future generations of Oklahomans.
Bob Blackburn, director of the Oklahoma Historical Society, told the Tulsa World earlier this year that the group’s state funding has been slashed by more than 40 percent in the past eight years. Bartlesville officials were notified over a year ago that the Frank Phillips Home was one of the facilities that would need additional funding and support or it would be closed. The city of Bartlesville and Woolaroc worked out an agreement whereby Woolaroc would take over the operation of the facility. “It was a natural for us,” said Bob Fraser, director of Woolaroc.. “But, there were still quite a few details to work out, legally and financially, to make it work.”
According to the deed, if the Oklahoma Historical Society could no longer operate the facility, ownership was to be transferred to the city of Bartlesville. If the city was unable to operate the museum, the deed called for the demolition of the significant historical site. “That was about 18 months ago, and after talking with officials with the city of Bartlesville we were not going to let that happen under any circumstance,” said Bob Fraser, CEO of Woolaroc. “If we let that happen to the house, Frank would have come down from heaven and kicked our tails.”[264]
Fraser said bringing the Frank Phillips Home and Woolaroc together under the Frank Phillips Foundation ownership is a perfect fit. “We are excited about the possibility of bringing the Frank Phillips Home under our wing,” he said. “We knew with the issues in state funding that the future of the Oklahoma Historical Society’s ability to own and operate the home was in question. The Foundation is the right fit to carry on the legacy of Frank and Jane Phillips with both Woolaroc and the Frank Phillips Home.” Once all of the paperwork and agreements are decided by the Oklahoma Historical Society, the city of Bartlesville, the Frank Phillips Foundation, the heirs of the Phillips family and the court system, Fraser said the Foundation will have endowment funds available to preserve the historic home for generations to come. “The Oklahoma Historical Society has done a great job and it’s not easy preserving a 100-year-old home,” Fraser said. “We also have a vision to not only maintain this integral part of Bartlesville history, but to bring new life to it too.”[265]
August 12, 2017: Phillips 66 Funded Dakota Access Pipeline Upends Oil Transport
The Bismark Tribune reported on August 11, 2017 that for the first month of commercial service of the Dakota Access Pipeline, oil leaving the state by rail dropped 20 percent. At its peak, crude by rail transport was 800,000 barrels per day out of the state. In recent months, it has hung from 300,000 to 400,000 barrels per day. Justin Kringstad, director of the North Dakota Pipeline Authority, estimates 65,000 to 90,000 barrels per day left the region by rail in June. "For the first time, starting in June, we are now in an environment where we have adequate pipeline capacity,” said Kringstad. “There is technically enough pipeline to move all of the production.”
The question becomes how long will pipeline capacity stay ahead of production. Kringstad estimates current capacity will last until about the mid 2020s. This is based on calculations that assume either 65 new wells per year drilled over the next six years or 90 new wells per month over the next four years. According to Department of Mineral Resources Director Lynn Helms, the department has permitted 100 wells for drilling in May, 109 in June and 146 in July. In May, 66 wells were completed and preliminary numbers show 63 were completed in June. Total production decreased slightly, by 1 percent, to 1.04 million barrels per day in June, with production expected to remain above the 1 million barrel mark through the summer months.[266]
According to Amy Sisk writing in 'Inside Energy' on August 14, 2017 Dakota Access Pipeline is rapidly upending the transportation sector of the oil industry, and it’s impact has only just begun. One big change has been that before Dakota Access came online this spring, trains were still carrying a significant amount, about 25 percent. But in just the line’s first month, that number dropped way off, down to just 7 percent.
Bigger changes could be yet to come. “When a new pipeline system typically goes into service, they do not operate at full capacity initially,” said Justin Kringstad, director of the North Dakota Pipeline Authority. So the numbers could change even more down the road as Dakota Access builds up to carry 500,000 barrels per day to Illinois, where that oil will be taken on additional pipelines to the Gulf Coast. “I don’t anticipate us being at full capacity with Dakota Access for quite some time, whether that’s 3 months, 6 months,” Kringstad said.
"Oil companies are breathing a sigh of relief that the pipeline’s operational," concludes Sisk, "as they absorb the ripple effects it’s sending throughout the industry."[267]
August 12, 2017: New Web Site Allows Citizens to Monitor Air Quality Near Phillips 66 Rodeo Refinery
The Vallejo Times Herald reported on August 12, 2017 that a new air monitoring website and app launched this week allows residents who live near refineries in California to access real-time information about what’s concentrated in their air, report odors or upload pictures of unusual emissions, and get specific information about chemicals and pollutants and their effects. This is the first time citizens can view activity as a whole all over the region, instead of going to each specific refinery or municipality. Air Watch Bay Area is a labor of love jump-started by academics from Drexel University and Carnegie Mellon, who teamed up with local air quality activists in hopes of creating a more transparent data center for residents.
For example when the Phillips 66 Rodoeo Refinery had a spill last September, and residents of Benicia and Vallejo reported strong gas odors with some people being hospitalized, the “mystery” around that spill dragged out for months and was only officially resolved in June of this year when the Air District confirmed the spill and slapped violations on the refinery. Had the Air Watch app been available, Constance Beutel said, people could’ve reported their symptoms and the odors, then seen all the other people with the same reports and where they were concentrated. Data from independent air monitors in Rodeo, Crockett, and elsewhere could be viewed to give folks some idea what they were smelling and more importantly, what could be making them sick, and why. “I could go to the Air Watch website, look for reports where I am or view other areas around refineries and start to see clusters,” Beutel said. “Then I could look at wind direction.”[268]
August 5, 2017: Solano County Supervisor Opposes Increased Oil Tanker Traffic to Rodeo Refinery
The Vallejo Times Herald reported on August 5, 2017 that Solano County Supervisor Monica Brown has penned a strongly-worded letter to the Bay Area Air Quality Management District, opposing Phillips 66’s proposal to more than double its oil tanker fleet to Rodeo Refinery. Brown suggests holding community meetings in Benicia and Vallejo to discuss the proposal and get feedback from constituents on the D.E.I.R. She also said that the public should be informed of the meetings by every means possible, through newspapers, social media and websites. “My constituents were impacted by the last Phillips 66 spill and deserve to have a voice in something that has already so negatively impacted them,” she said.[269]
August 2, 2017: Phillips 66 Rejects Venezuelan Crude Oil that Doesn't Meet Specs
The NY Times reported on August 2, 2017 that Phillips 66 imports of heavy crude from Venezuela has dropped by more than two-thirds this year in part due to quality problems, and the company has cancelled at least one cargo in recent months. Venezuela's heavy crude supply to Phillips 66's Sweeny refinery in Texas fell to 33,500 barrels per day (bpd) in June from 105,000 bpd in January, according to Thomson Reuters Trade Flows data. The contract between Phillips and Venezuela's PDVSA allows a maximum supply of some 170,000 bpd. Phillips 66 has also asked for price discounts for other shipments of Venezuelan crude, according to sources from state-run oil company PDVSA.[270]
August 1, 2017: Phillips 66 Beats Quarterly Earnings Estimates with Increased Profits from Refineries
Reuters reported on August 1, 2017 that Phillips 66 reported a bigger-than-expected rise in quarterly profit helped by increased earnings from its refining business which rose more than 50 percent to $224 million in the second quarter due to higher volumes and lower costs. Phillips 66's earnings from its chemicals business rose to $196 million from $190 million helped by higher volumes and improved margins. On an adjusted basis, Phillips 66 earned $569 million or $1.09 per share. That was higher than analysts' expectation of $1.01 per share.[271]
“We delivered good operating performance, generated strong cash flow and made significant progress in several growth initiatives during the quarter,” said Greg Garland, chairman and CEO of Phillips 66. “The Bakken Pipeline and new storage capacity at the Beaumont Terminal were placed into service, and CPChem reached mechanical completion of two polyethylene units as part of its U.S. Gulf Coast Petrochemicals Project. Additionally, the Billings Refinery completed an advantaged crude project to enhance returns. The completion of these projects improves our future earnings and cash generation capability.”
The $235 million improvement in Refining from the prior quarter was largely driven by higher volumes and lower costs due to reduced turnaround activity. Realized margins for the quarter were $8.44 per barrel, compared with $8.55 per barrel in the first quarter. Phillips 66’s worldwide crude utilization rate was 98 percent, up from 84 percent in the prior quarter. Pre-tax turnaround costs for the second quarter were $154 million, compared with first-quarter costs of $299 million. Clean product yield was 85 percent in the second quarter, unchanged from the first quarter.[272]
July 27, 2017: EPA Director Scott Pruitt Visits Phillips 66 Research Facility in Bartlesville
Bartlesville Radio reported on July 27, 2017 that Environmental Protection Agency Administrator Scott Pruitt visited Phillips 66 Research Facility in Bartlesville this week and talked to leaders there as part of Pruitt 's Back to Basics Agenda -- an effort he implemented to take the EPA back to its core mission. Pruitt says he sees Phillips 66 as making an effort to do the right thing, not just to meet a government mandate.[273]
July 27, 2017: Phillips 66 Seeks to Double Oil Tanker Traffic to Rodeo Refinery
KQED reported on July 27, 2017 that Phillips 66 wants to more than double the number of oil tankers from 59 ships a year that travel through San Francisco Bay to unload crude at its refinery in Rodeo. Phillips 66 wants to increase that limit to 135 and to raise the daily average of oil unloaded at the terminal from about 51,000 barrels to 130,000. The company says the extra tanker deliveries would replace crude oil currently delivered by pipeline. It “poses an incredible new risk of oil spills to San Francisco Bay,” Sejal Choksi-Chugh, executive director for Baykeeper, said in an interview. “We’re really concerned about the increase in the number of tankers that the refinery is proposing to bring in.”
The refinery’s move toward an increase in shipping crude to its Rodeo facility and away from pipeline transfers comes after officials in San Luis Obispo County rejected the company’s proposal to transport more oil by train to its refinery there. Paul Adler, a Phillips 66 spokesman, confirmed in an email that the oil that would be brought by extra ships to the refinery would be different from the crude transported by pipeline from Central California. He declined to comment further on the proposal, adding that he would attend Thursday’s air district public scoping meeting in Vallejo where residents could ask questions about the project.[274]
July 22, 2017: Texas Commission on Environmental Quality Says Phillips 66 Borger Refinery Leads Texas in Particulate Emissions
The Amarillo Globe News reported on July 22, 2017 that Phillips 66’s Borger Refinery emitted more particulate matter than any other oil refinery from 2012 to 2016, according to data from the Texas Commission on Environmental Quality. The refinery exceeded its allowed particulate threshold 34 times over those five years, spewing more than 300 tons in total. Emission outbursts ranged from six minutes and 20 pounds to more than two weeks and 124,000 pounds. Quantifying the pollutants’ impact on Texas Panhandle residents is difficult without a detailed scientific study, according to Erick Butler, West Texas A&M University assistant professor of environmental engineering. Factors such as wind dispersion and proximity to the refinery magnify or shrink the risk of disease.
However in a written statement, Phillips 66 director of media and external relations Dennis Nuss challenged the TCEQ data, saying it was inaccurate based on faulty refinery reporting up until February 2016. “In 2016, the Borger Refinery identified it had been over-reporting emissions for Particulate Matter of 10 Microns or less (PM10) and met with TCEQ to inform them of the reporting error,” Nuss wrote. “We have recalculated PM10 emissions to meet TCEQ reporting requirements, however, the publicly available original emission reports will remain unchanged. Based on updated calculations, the Borger Refinery PM10 emissions are significantly less than reflected in this report.”[275]
July 19, 2017: US Considers Sanctions Against Venezuelan Crude That Could Affect Phillips 66
The NY Times reported on July 18, 2017 that the Trump administration is considering imposing sanctions on additional Venezuelan officials, one of several options under discussion as a rebuke to President Nicolás Maduro’s government and his efforts to consolidate authority. Bloomberg reported on July 11, 2017 that Valero, Phillips 66 and Chevron Corp. buy hundreds of thousands of barrels of the country’s heavy crude every day. The White House has weighed a petroleum embargo, a step a trade group representing refiners including Valero, Phillips and Chevron urged last week that it not take. “Today’s oil sales for Maduro may be tomorrow’s oil sales for the opposition,” said Kevin Book, head of the Washington-based research firm ClearView Energy Partners. “What does Venezuela need after Maduro? The answer is going to be oil sales to the United States.”
The U.S. has accused the Maduro government of human rights violations, and President Donald Trump called the turmoil there -- with at least 80 lives lost in street protests in the past two months -- “a disgrace to humanity.” According to Bloomberg, the White House began considering new sanctions after Maduro’s May announcement that he would try to rewrite the country’s constitution in a way that critics said would tighten his grip on power.
But if the Trump administration does impose new sanctions, those probably won’t include an ban on Venezuelan oil imports, according to people familiar with the matter. The argument made by the U.S. refiners resonates: An embargo would hurt both economies. In the U.S., it would squeeze margins for refineries that rely on Venezuelan crude, and potentially raise gasoline prices. Nearly 10 percent of U.S. oil imports come from the South American nation, much of that going to the Gulf Coast. Companies that run Gulf Coast refineries, including Valero and Chevron, have spent millions retooling their facilities to process the sour, tar-like crude for which Venezuela is famous. Chevron declined to comment for this story and Valero didn’t respond to requests for comment. Dennis Nuss, a spokesman for Phillips, said the company supports “the Trump administration acting in the best interests of the United States.”
According to Bloomberg, Gulf Coast refiners including Valero Energy, Chevron Corp. and Phillips 66 have spent millions tailoring their plants to use Venezuela’s unique brand of heavy, tar-like crude. "Disruptions are part of the game in the oil market, and refiners no doubt have backup plans. But the companies may see profit decline if they’re forced to reduce gasoline and diesel output or to find replacement supplies from the Middle East or other regions." Phillips 66, in a statement, said a U.S. ban wouldn’t prevent Venezuela from selling its crude elsewhere on the global market. Phillips 66 bought 46.2 million barrels of crude oil from Venezuela in 2016.[276] According to the US Energy Information Agency, crude oil bought by Phillips 66 from Venezuela is refined at Sweeny Refinery.[277][278]
July 8, 2017: Fire Fighters Contain Blaze Near Phillips 66 Rodeo Refinery
NBA Bay Area reported on July 8, 2017 that a fast-moving brush fire in Rodeo has scorched at least 370 acres of dried grass and burned its way close a Phillips 66's Rodeo Refinery but firefighters were able to halt the flames from reaching the refinery. The blaze is 75 percent contained as of Saturday night, and crews will remain on scene overnight in order to reach full containment and battle any hot spots.[279]
July 8, 2017: Fake News Story Says Phillips 66 Will Close Bartlesville Research Center
The Bartlesville Examiner Enterprise reported on July 8, 2017 that Phillips 66 found itself in the center a fake news tsunami last week after a bogus story quoted the company’s CEO as saying the Bartlesville research center would be closed and demolished. The fake story looked real at first glance on Facebook. It looked like every other Facebook post. It included a photo, and was posted by channel45news.com. If you clicked on the link, the post takes you to channel45news.com and what appears to be a legitimate news story. The story announced plans to demolish the research center and build a new one in Dallas. “The newly vacant land will be used to research radioactive effects on crops grown for feeding livestock in local markets across Oklahoma and Southern Kansas. The research will provide valuable information on the effects of radioactivity and its effect on livestock used for food. When asked about the destination for the possibly radioactive fed animals the CEO could not at the time comment.”
Phillips 66 issued a statement refuting the hoax. “This story about demolishing the research center is a hoax. Phillips 66 only disseminates news throughout its owned media channels such as our website and social media accounts, and via press release distribution services and statements to legitimate news outlets.”[280]
July 7, 2017: Phillips 66 Blames Contractor for Hydrofluoric Acid Leak at Ferndale Refinery That Sent 7 Workers to the Hospital
The Bellingham Herald reported on July 7, 2017 that Phillips 66 is appealing its $37,800 fine for a February hydrofluoric acid leak at its Ferndale Refinery that sent seven workers to the hospital. The Washington State Department of Labor & Industries deemed the incident as “serious" and found that Phillips “did not implement safe work practices for the control of hazards for the employees” and the company “did not inform the contract employer of the known potential fire, explosion or toxic release hazards related to the contractor’s work and the process.”
Phillips disagrees with the assessment of the fine, saying a contractor was at fault. “The incident in question occurred when a trained contractor improperly disconnected an enclosed rod out tool from an open drain valve in the alkylation unit,” Phillips stated in its appeal. “The incident was not caused by the failure to develop or implement safe work practices, but by a contractor’s failure to follow them." A hearings officer will decide the matter by Aug. 28, according to L&I spokeswoman Elaine Fischer.[281]
July 7, 2017: Phillips 66 Ferndale Refinery Donates Boston Whaler to Whatcom County Fire Department
Discover Ferndale reported on July 7, 2017 that Phillips 66 Ferndale Refinery has replaced a 21-foot Boston Whaler boat and donated it to Whatcom County Fire District 17 (Sandy Point). “The fire district is in need of a boat to assist with off-shore emergencies in the Sandy Point area, hence the in-kind donation,” said Josh Summers, Phillips 66 public affairs director. Whatcom County Fire District 17 Fire Chief Jim Petrie pointed to examples of how, in 2016, his responders could have used a waterborne vessel during their emergency response. “Last summer alone there were three incidents right off of the Sandy Point peninsula where boats were either sinking or caught fire,” said Petrie. “Firefighters were called but had to watch helplessly from the beach.”[282]
July 5, 2017: Phillips 66 Santa Maria Refinery Donates $25,000 to Dunes Center
The Santa Maria Sun reported on July 5, 2017 that Phillips 66 is donating $25,000 to Guadalupe's Dunes Center to go toward educational opportunities to underserved students in programs such as science, technology, engineering, and math. Education programs that will benefit from funding include guided student field trips to Oso Flaco Lake, classroom science presentations, and informal programs available through 10-week-long after-school programs held in partnership with local schools and community organizations. Recent topics include geology and botany; oceanography will be offered this summer.[283]
July 4, 2017: Flaring Create Dark Smoke Plume over Phillips 66 Ferndale Refinery
Discover Ferndale reported on July 4, 2017 that flaring caused by activated safety system at the Phillips 66 Ferndale Refinery at 3901 Unick Road sent up a plume of smoke over west Ferndale, alarming some nearby residents. According to Josh Summers, director of public affairs at Phillips 66, “All personnel are safe and the refinery is operating normally.” The plume subsided shortly after it began but the black cloud it created could be seen floating to the southeast as it dissipated.[284]
July 1, 2017: Two Oil Tanker Crashes Raise Concerns About Safety of Oil Trucks Going to Phillips 66 Santa Maria Refinery
The Tribune reported on July 1, 2017 that the recent crash of a tanker truck carrying 6,200 gallons of highly-flammable crude oil to Phillips 66's Santa Maria Refinery has raised concerns about the 52 trucks a day carrying thousands of gallons of crude that rumble through San Luis Obispo County to the Phillips 66 refinery on the Nipomo Mesa for at least another year. The crash occurred 2.5 miles from its destination at the Phillips 66 refinery when the brakes went out and it rolled off the road to avoid a car. No one was injured, and less than a gallon of oil spilled. “It gives us concern that if that happened before, it will happen again. That’s just the inevitability of it,” said Laurance Shinderman, of Nipomo, who is active in the Mesa Refinery Watch Group. The intersection of Willow Road and Highway 1 where the semitruck crashed last week is frequented by tanker trucks and is a concern to local residents like Shinderman, who witness cars zooming by in low visibility sometimes caused by low-lying fog. They are especially concerned because of a sharp right turn near the intersection.
Another Phillips 66 oil tanker crash occurred last fall that ended in a driver’s death. According to the California Highway Patrol, Elias Garcia, 45, of Bakersfield had just unloaded his truck when his wife called to check on him about 2 a.m. Sept. 13, 2016. Garcia told her he was tired and on his way home. He never made it. Officers suspect he fell asleep at the wheel around 7:30 a.m. on Highway 166 near New Cuyama. The tanker swerved over the double-yellow lines and slammed into several oncoming trucks. He was ejected into a dirt field and pronounced dead at the scene.
Hundreds of tanker trucks have been delivering oil to Santa Maria Refinery, and to a pump station in Santa Maria to fill a supply gap created by the shutdown of the Plains All American Pipeline in Santa Barbara County in May 2015. The district last year issued a notice of violation to the company for violating Health and Safety Code and county rules by failing to inform the county about the refinery receiving oil trucks. Phillips 66 wracked up civil penalties for 61 days that could have been assessed at up to $610,000. It settled the violation with the county in May by agreeing to pay $15,914 to the district.[285]
June 30, 2017: Phillips 66 Donates $39,000 to Wyandotte High School to Put a Laptop in the Hands of Every Student
The Pawhuska Journal reported on June 30, 2017 that Phillips 66 made a grant of $39,000 to purchase more than 200 Chromebooks to be used starting this coming school year. Superintendent Troy Gray said the contribution by Phillips 66 will give Wyandotte High School students direct access to technology. “Dallas Gramm, a local pipeliner with Phillips, came to us and brought this to us. We’re looking at going one-to-one with our kids, which means that every high school student will have their own Chromebook and case,” Gray said. “They can take that from class to class and take it home with them. It’s impossible for us with budget cuts to make this happen without their help.”[286]
June 28, 2017: Firm That Provided Security on Phillips 66 Funded Dakota Access Pipeline Did Not Have Permit to Operate in North Dakota
The Billings Gazette reported on June 28, 2017 that North Dakota's governor, top law officer and military leader all say they were unaware that a private security firm hired by the developer of the disputed Dakota Access oil pipeline, funded in part by Phillips 66, has been operating illegally in the state without a license. North Dakota's Private Investigative and Security Board first notified TigerSwan in September it was unlicensed, and in December rejected its application, citing the alleged criminal history of the company's president. Attorney General Wayne Stenehjem, the state's top law enforcement officer, said he did not "recall being made aware" of TigerSwan's involvement or lack of a license. "Certainly, If I had known they were operating, I would have advised them to comply with the law," he said.
The regulatory board has asked a state judge to stop TigerSwan's armed workers from continuing to monitor the pipeline system and requested administrative fines be levied against the company and its president, James Reese, for operating without a license, a misdemeanor carrying a potential sentence of 30 days in jail and a $1,500 fine. The regulatory board alleges in court documents that TigerSwan employees with semi-automatic rifles and handguns protected workers and equipment at construction sites, conducted intelligence on protesters including placing or trying to place undercover agents within the protest groups, and even monitored traffic on a state highway. The board also says TigerSwan is still providing round-the-clock security along the pipeline in the state.
Maj. Gen. Alan Dohrmann, the leader of the state's National Guard, said he did not know until Wednesday that TigerSwan was operating illegally. "The National Guard had absolutely no interaction with them," said Dohrmann, whose troops spent months monitoring the protest and helped law enforcement remove protesters from the site in south-central North Dakota in February. "If there was any interaction between our folks and them, it was only through casual conversation," Dohrmann said. "Through official Guard channels, there was no coordination."
TigerSwan was founded by retired military special forces members. Internal company documents indicate that employees conducted an aggressive, multifaceted operation against pipeline protesters that included maintaining a close working relationship with public law enforcement. "When you have an organization like TigerSwan come in and start to influence decisions by law enforcement and even leadership in the state, you have to step back and say, where is the safety, where is the justice?" Standing Rock Sioux Chairman Dave Archambault said.[287]
June 28, 2017: 330-ton Reactor Makes Journey to Phillips 66 Wood River Refinery
The Telegraph reported on June 28, 2017 that a 90 foot-long, 24 foot-wide, 330-ton reactor made its four-day journey from Luka, Mississippi on a barge via the Tennessee River to the Ohio River and finally to the Mississippi River for use in the process of controlling reactions in making gasoline. The reactor replaces an older operating unit, said Wood River Refinery spokesperson Melissa Erker. “Continued investment in the operating equipment to ensure safe and reliable operations is an important focus of the Wood River Refinery,” said Erker. Wood River Refinery’s project engineering team has overseen the project, to later be handed off to the operations team and other skilled crafts workers at the facility.[288]
June 23, 2017: Opponents of Phillips 66 Funded Bayou Bridge Pipeline File Lawsuit in Louisiana
The New Orleans Advocate reported on June 23, 2017 that opponents of the Bayou Bridge Pipeline, funded in part by Phillips 66, have sued the state of Louisiana for granting a permit needed to allow construction claiming the Louisiana Department of Natural Resources violated the state constitution when it issued a Coastal use permit because officials neglected the negative impact of the pipeline. "The most urgent problem is how the pipeline will block evacuation from the Burton Lane Community in St. James. Residents complain that they are trapped without an escape route in the event of an emergency, spill or release," a coalition of environmental groups wrote in a news release. The plaintiffs, who will be represented by the Tulane Environmental Law Clinic, have pressured the state to produce a more thorough environmental impact statement.[289]
June 21 , 2017: Tickets Go on Sale for "Lydie Marland in the Afterlife" at Ponca Playhouse
Ponca Playhouse announced on June 21, 2017 that tickets have gone on sale for the play "Lydie Marland in the Afterlife" this summer as part of the "Oklahoma Pride" series, now in its sixth year. Ponca Playhouse's production will be the world premier of an expanded version of the original play originally presented at "The Festival of Independent Theatres" in Dallas, Texas in May, 2013. This expanded version was written especially for production in Ponca City by Ponca Playhouse by playwright by Isabella Russell-Ides. The play will be sponsored and produced by Hugh Pickens and Dr. S. J. Pickens.
Loosely based on the life of Lydie Marland, as told in the book “The Marland Tragedy,” Lydie was the niece and adopted daughter, then wife of oil magnate and Oklahoma governor, E.W. Marland. Her life was a fairy tale of riches turned Greek tragedy. From wife of one of the wealthiest men in the world to wayward bag lady, she was lost for twenty-two years in the landscape of America.
The play will run on July 13, 14, 15, 16, 20, 21, 22, 23. Tickets will go on sale in June and will be $20.
Tickets can be purchased online at Oklahoma Pride Annual Series by calling Ponca Playhouse at 580-765-5360 or at the Playhouse box office at 301 S. 1st Monday through Friday from 11am to 3 pm.
June 19, 2017: James Cullin Says Moving Away from the Ponca City Refinery Improved His Health
The Lehigh Valley Business reported on June 19, 2017 that James Cullin was born in Ponca City down the street from the Ponca City Refinery and that he experienced first hand the effects the facility had on his health as a child. When he was younger, Cullin said, his doctor strongly encouraged him to move. “Getting out of that neighborhood when I moved into the dorms my freshman year of college, my health improved. Go figure,” Cullin said. “My health improved again when I moved out of state. Again, go figure. All this only served to emphasize the importance to me of getting away from a fossil fuel-dominated energy industry.” Despite his personal and professional support for developing renewable energy sources, Cullin said there is no way fossil fuel demand can be eliminated from the energy sector, given the state of the country’s infrastructure. “It is neither feasible nor realistic to expect a complete changeover to renewables in a short time,” he said. “There will always likely be a need for small-scale use of fossil fuels, but long-term, big-picture, converting our energy infrastructure to utilize 100 percent renewable sources is the only viable option if we don’t want to irreversibly screw up the planet.”[290]
June 16, 2017: Phillips 66 Slapped With Two "Public Nuisance" Violations for Oil Sheen Incident at Rodeo Refinery Marine Terminal that Resulted in 1,500 Odor Complaints and 120 Hospital Visits
The Times Herald reported on June 16, 2017 that the Bay Area Air Quality Management District issued two “public nuisance” violations to Phillips 66 stemming from a September 20, 2016, oil sheen incident on the San Pablo Bay that resulted in nearly 1,500 odor complaints and an estimated 120 visits to Solano County hospitals. “The air district thoroughly investigated this incident and determined the Phillips 66 Refinery and the Yamuna Spirit oil tanker operator played a role in this event and both parties will be held accountable,” said Jack Broadbent in a statement, executive officer at the district. On the day of the event, a noxious smell blanketed the city of Vallejo. The fire department reported that over 800 residents called complaining of the strong smell of natural gas, gasoline, and “rotten eggs.” The odor was so strong that it could be detected as far away as Redwood and Broadway. A shelter-in-place order was given around 8 p.m. for south Vallejo and it was lifted the following morning. Vallejo Mayor Bob Sampayan applauded the air district’s decision. “I hope we can find these people accountable,” Sampayan said by phone on Friday afternoon. “There was no reason to have this happen.” Fines for these violations have yet to be assessed by the air district.[291]
June 15, 2017: Phillips 66 Wood River Refinery Sponsors Engineering Camp for Sixty High School Students
Riverbender.com reported on June 15, 2017 that sixty high school students attending Southern Illinois University Edwardsville’s Engineering Camp are learning how engineering impacts society thanks to sponsorship of the camp by Phillips 66 Wood River Refinery, with additional support from MiTek and the Illinois Professional Land Surveyors Association. Students participate in a variety of interactive experiments, design projects and field trips including building and programming robots, designing a water filtration system, mixing concrete, gliding on a hovercraft and more. Our campers bring incredible gusto and creativity to the camp, and we genuinely feed off that energy,” said Chris Gordon, PhD, associate dean in the SIUE School of Engineering. “Each camp is a unique, fun experience.” “The profession isn’t widely understood, so we’re trying to introduce young people to those concepts,” said Mark Grinter, PLS, associate professor and chair of the Department of Construction Management. “We’ve got this big campus with lots of different environments that allow us to do field exercises, including the prairie, lake, central core and woods.”[292]
June 13, 2017: Phillips 66 Celebrates 100th Anniversary on June 13
Bartlesville Radio reported on June 13, 2017 that Phillips Petroleum Company was incorporated 100 years ago on June 13th, 1917 by brothers Lee Eldas "L.E." and Frank Phillips of Bartlesville. Brothers Frank and L. E. (Lee Eldas) Phillips consolidated their companies and began operating with leases throughout Oklahoma and Kansas and assets of $3 million. Assets grew to $103 million by 1924.
By 1927 Phillips Petroleum began selling gasoline in Wichita, Kansas, the first of more than 10,000 service stations across the country. Phillips Petroleum became heavily involved in the natural gas industry immediately after the discovery of the Panhandle gas field of Texas and the Hugoton field in Kansas. Eight years after incorporation, Phillips was the largest producer of natural gas liquids in the United States. In 1927, Phillips started up its first petroleum refinery in Borger, Texas, designed to produce gasoline as an automotive fuel. It opened its first service station, to sell gasoline in Wichita in November of 1927. In 1930, the company developed its "Phillips 66" trademark.[293][294]
During a stop in St. Louis while en route back to Creston from Chicago in 1903, Phillips encountered C. B. Larabee, an old friend from Iowa. He was serving as a Methodist missionary to the Osage Indians west of Bartlesville in Indian Territory. The area, which is now Osage County, Oklahoma, was rich in oil. What proved to be a decades-long boom was just getting under way. Later that year, after Phillips and Gibson made two trips to Bartlesville, Phillips and his younger brother L.E. Phillips organized the Anchor Oil & Gas Company with Gibson's assistance.
Anchor opened an office in Bartlesville in 1905, secured a driller and drilled its first wildcat well, the Holland No. 1. The men struck oil on June 23, 1905. The brothers' second and third wells were dry holes, and they had barely enough money left to drill a fourth well, the Anna Anderson Number One. The Anna Anderson, completed September 6, 1905, was a gusher, and the successful well enabled the brothers to raise $100,000 through the sale of stock. The Anna Anderson was the first of 80 consecutive producing wells drilled for the brothers' company
Phillips once said to employees, to whom he was known as "Uncle Frank": "Work hard and demonstrate loyalty, and I'm a great guy to work for. Do neither, and there is no one worse." On another occasion, he said, "I am egotistical. I exercise the 'privilege and prestige of the office.' I'm bombastic, hard to get along with, an easy touch, a farm boy at heart, and conveniently hard of hearing. I'm just a sentimental old man. I'm tough. and I know it. I'm the boss, and don't let anybody try to question it."[295]
June 12, 2017: Bay Area Residents Asked to Comment on Proposal to Expand Phillips 66 Rodeo Refinery Marine Terminal
The East Bay Times reported on June 12, 2017 that Phillips 66 wants to receive and process more crude and gas oil delivered by ship for their Rodeo Refinery while reducing the amounts of crude currently delivered to the refinery by pipeline. The revision would not affect the characteristics of the oils the refinery is able to process, the press release adds. The Bay Area air district will hold a community meeting in Hercules on June 22 about the scope and content of the upcoming environmental analysis of Phillips' marine terminal proposal. Air District staff members will make a presentation, and community members will get a chance to ask questions and make comments.[296]
Phillips 66 Responsible for Oil Sheens on San Pablo Bay from Rodeo Refinery Oil Terminal in October 2016
The East Bay Times reported on October 20, 2016 that the mysterious oil sheens that appeared on San Pablo Bay on September 20, 2016 were connected to a crude oil tanker or the Phillips 66 refinery, the U.S. Coast Guard announced. The spill left two sheens on the bay, including one just over a mile long by 40 yards wide on the water in the northern San Pablo Bay area, according to the U.S. Coast Guard, the lead agency investigating the incident. A second sheen was later identified during a Coast Guard overflight near the Phillips 66 Rodeo refinery marine terminal. Authorities were unable to determine if the sheen found in the bay originated from the Yumuna Spirit of the Phillips 66 facility. The U.S. Coast Guard said the vessel and the facility are responsible for recovering federal related response costs. The Coast Guard could not determine what caused the odor that sent dozens of people to hospitals in Vallejo with complaints of headaches, nausea and dizziness on September 20, 2016.[297]
KQED reported on October 18, 2016 that officials have revealed a clue that could help determine what caused the oil spill in San Pablo Bay a month ago and a sickening odor that sent dozens of people to the hospital in Vallejo around the same time. Results of tests taken of the substance found in the water in late September show that it was crude oil from the Middle East, according to an official with California’s lead agency for responding to oil spills. Randy Sawyer, chief environmental health and hazardous materials officer for Contra Costa County Health Services, says the crude must have come from an oil tanker at a marine terminal in Rodeo. “Based on the analysis and where the sheen was located, the oil sheen originated from the ship while it was unloading to Phillips 66,” Sawyer said. I’s unclear how the oil might have leaked from the vessel. “I know that Phillips did check their piping and there were no leaks,” Sawyer said. “There may have been a portion of the piping (that was) not tested.”
Phillips 66 declined to comment on the investigation and activity of the Yamuna Spirit at its marine terminal. “Phillips 66 generally does not comment on activity as it relates to our crude supply and transportation arrangements,” said Aimee Lohr, a refinery spokeswoman.
When the investigation is concluded, local environmentalists say whoever is responsible should be held accountable. “The perpetrators need to face stiff penalties for this absolutely unacceptable oil spill,” said Patrick Sullivan, an Oakland-based spokesman for the Center for Biological Diversity. “But even the steepest fines won’t undo the damage this oil has done to the bay,” Sullivan said. “That’s why we’ve got to move away from shipping dirty crude through California’s fragile coastal ecosystems.”[298]
- See also Health Official Says Phillips 66 Rodeo Refinery Needs to Notify Local Agencies Faster Next Time it Learns of an Oil Spill Near its Facility September 28, 2016
- See also Officials Investigate Whether Phillips 66's Rodeo Refinery Is Tied to San Pablo Bay Oil Spill September 16, 2016
June 8, 2017: Why Phillips 66 Continues to Invest in Refinery Modernization
Phillips 66 CEO Greg Garland told analysts during the company's latest conference call that while he thinks "refining is a good business. It's just, long-term, I just don't see it growing." Now Matthew DiLallo has published an interesting article on Motley Fool on June 8, 2017 where he examines the seeming paradox that although Phillip 66 has no plans to invest in growing its refining capacity, the company still spent $384 million on growth-focused refining projects last year. The answer is that these projects aren't about increasing Phillips' processing capacity but instead will grow Phillips' ability to earn more money from its existing refining assets. "For example, one of the projects the company undertook was modernizing the Fluid Catalytic Cracking Unit (FCC) at its Bayway refinery in New Jersey," writes DiLallo . "It replaced the existing older reactor with modern technology, which would enable it to turn the same 145,000 barrels of oil per day it currently processes into 4,000 additional barrels a day of higher-value gasoline and diesel. As a result, Phillips 66 can earn a higher-margin off the barrels it refines."
Phillips has similar projects at Billings Refinery where the the Vacuum Improvement Project will enable it to process more Canadian crude and at Lake Charles Refinery in Louisiana where a new isomerization unit will increase production of higher-octane gasoline blend components. Phillips also plans to complete a diesel recovery project at its Ponca City refinery later this year and has a similar FCC modernization underway at its Wood River refinery in Illinois that should start up in 2018.
According to DiLallo, Phillips 66 has no plans to process any more oil per day than it currently refines. "That said, it wants to maximize the value of those barrels, which is why it's investing in smaller projects that can increase its ability to process lower-cost blends of oil and improve the percentage of higher-value refined products it produces. These investments should lower costs and improve margins, enabling the company to boost the profitability of its existing refineries."[299]
June 5, 2017: Chevron Phillips Announces Expansion at Cedar Bayou Plant
Businesswire reported on June 5, 2017 that Chevron Phillips Chemical Company LP has successfully completed a low viscosity polyalphaolefins (PAO) capacity expansion at its Cedar Bayou plant in Baytown, Texas. The 20 percent capacity expansion enables the company to meet the increasing demand for high-performance lubricants in automotive and industrial applications. The project improves process safety and overall unit efficiencies while reducing waste generation for Cedar Bayou’s PAO unit. The feedstock for the new unit will be provided from Cedar Bayou’s recent 100,000-metric-tons-per-year expansion of its normal alpha olefins capacity. Construction began in April 2016 and supported up to 135 construction and engineering jobs.[300]
June 2, 2017: Strange Odor Said to Be From Phillips 66 Ferndale Refinery Sends Students Home Early
The Lyden Tribune reported on June 2, 2017 that students at Horizon Middle and Cascadia, Skyline and Eagleridge elementary schools, all within a mile of each other near Thornton Road, reported a strange odor at about noon on June 1, according to the Ferndale School District. Staff and students also reported feeling sick, with symptoms of burning eyes and coughing. Students were sheltered in place while the cause of the odor was investigated. The Northwest Clean Air Agency responded to the reports of the strong odor after receiving phone calls from residents starting around 1:30 p.m. One caller said the source appeared to be the Phillips 66 refinery at 3901 Unick Rd., about two miles southwest of the schools. Officials from Phillips 66 told a NWCAA inspector that an “upset,” or operational problem, in the refining process caused a strong sulfur odor on site, and that it dissipated by mid-afternoon. “There could be any number of causes [for the upset] during the operation of large, complex industrial processes,” said Seth Preston, air agency representative. “In this case, we are working with Phillips 66 to determine what exactly happened and the cause of the problem.”
Data from the National Oceanic and Atmospheric Administration showed that winds were blowing in the direction of the schools at the time of the Thursday refinery upset, he said. Although there is no direct link, Preston said the reactions of students and others in the area were consistent with the strong odors reported at the refinery. The NWCAA is working with Phillips to determine the cause, he said. Responding agencies on site, including a NWCAA inspector, could not locate or verify an exact source of the odor.[301]
However according to the Bellingham Herald by June 6, 2017 the Northwest Clean Air Agency said that they haven’t been able to verify the source. “The stumbling block for us is that by the time we got an inspector up there to investigate, there was no detectable odor,” said Seth Preston, a spokesman for the agency based in Mount Vernon. It’s possible the Phillips refinery was involved, said John Gargett, deputy director of emergency management with the Whatcom County Sheriff's Office. But he’s skeptical. The upset at the refinery occurred around 8:30 a.m., long before people started to smell something in Ferndale, according to Phillips’ report to local officials. “Were they related?” Gargett said. “Maybe, but that’s about as far we’ve gotten.” Officials have looked into many possible causes: local farms, or a pipeline leak, or even something unpleasant being shipped by rail, but so far they’ve come up with nothing. The other companies that refine or transport oil products along the shoreline of Whatcom County – BP and Kinder Morgan – also found no problems.[302]
June 2, 2017: Phillips 66 Awards Scholarship to Ponca City Senior
The Ponca City News reported on June 2, 2017 that Zachary Pando, son of Phillips 66 employee Maurilio Pando, will receive a $16,000 college scholarship from the Phillips 66 Dependent Scholarship Program. The competitive program awards outstanding college-bound students whose parents work for Phillips 66 or one of its subsidiaries. The Phillips 66 Dependent Scholarship Program will annually award as many as 66 four-year scholarships of $16,000 each for higher education at any accredited institution.[303]
Refinery Manager Pete Stynes told the Ponca City Lions Club on October 10, 2012 that about 800 employees and contractors work at the refinery with the direct employment of 625 Phillips employees.[304]
May 26, 2017: Nine Bartlesville Area Seniors Win Phillips 66 Awards Scholarships
Bartlesville Radio reported on May 26, 2017 that nine Bartlesville area seniors received a $16,000 college scholarship from the Phillips 66 Dependent Scholarship Program: Samantha Coats, Kaitlyn Cole, Alexis Jergenson, Ashley Raatz, and Henry and Jack Williams who all attend Bartlesville High School plus three other students from the Bartlesville area: Katelynn Morgan from Oologah-Talala High School, Nathan Schaffner at Collinsville High School, and Kaleigh Townley of Barnsdall High School, won scholarships.[305][306]
Merl Lindstrom, vice president of technology for Phillips 66, told Bartlesville’s Daybreak Rotary Club on January 23, 2015 that approximately 1,750 Phillips 66 employees work out of the company’s offices in downtown Bartlesville and another 450 are based at the Research Center in west Bartlesville for a total of 2,200 Phillips 66 employees in Bartlesville.[307]
June 2, 2017: Phillip 66 Sweeny Refinery Reports Power Blip
Fox Business reported on June 2, 2017 that Phillips 66 Sweeny Reingery reported a power blip and emissions. "The deluge system activated at the Cogen Unit causing the GSU2 transformer to arc, resulting in a low voltage power dip," the refinery said in a statement to the Texas Commission on Environmental Quality. "This resulted in the tripping of three transformers on the Electrostatic Precipitator." The refinery said the transformer reset itself and power was restored. "The power blip lasted only seconds but was enough to cause the excess opacity," it said.[308]
May 31, 2017: San Francisco Pollution Board Moves Closer to Capping Greenhouse Gas Emissions at Phillips 66 and Other Refineries
The Times Herlad reported on May 31, 2017 that the San Francisco Bay Area’s air pollution board took a big step toward becoming the first in America to cap greenhouse gas emissions from oil refineries including the Phillips 66 Rodeo Refinery. Air district officials said the rule to limit greenhouse gases on the Bay Area’s five oil refineries is needed to prevent an increase in the pollution if oil refineries switch to using dirtier crude oil sources from places like the Canadian tar sands area. “This rule will be part of a larger effort to reduce greenhouse gas emissions,” said Jack Broadbent, executive officer of the Bay Area Air Quality Management District. “This action is important in light of the anticipated withdrawal from the Paris climate agreement by President Trump.”
A divided audience of some 200 people attended a meeting about the rule. Oil refiners said the rule could end up having no impact on global climate change. Oil refining could shift from the Bay Area to states with more lenient environmental laws, providing no net reduction in greenhouse gases, oil industry representatives said. Oil refinery workers and petroleum company representatives were unhappy, saying the rule could limit production at the plants, cost jobs, and raise fuel prices.
Oil refineries are the largest single industrial source of greenhouse gases in the Bay Area. The Bay Area’s five refineries are Chevron in Richmond, Shell in Martinez, Valero in Benicia, Tesoro north of Concord, Phillips 66 in Rodeo.[309]
May 28, 2017: Fugitive Causes $1 million in Damage to Phillips 66 Borger Refinery During High Speed Car Chase
Amarillo.com reported on May 28, 2017 that Hutchinson County law enforcement caught a fugitive wanted in at least three counties after a chase that damaged the Chevron Phillips 66 refinery in Borger. Angel Vasquez allegedly crashed through several gates at the chemical plant, causing extensive damage. Hutchinson County Sheriff Kirk Coker said the estimated damages may be near $1 million. “He was doing 85 mph (in a 20 mph zone) when he broke the gate,” he said. The suspect totaled the pickup, which was stolen from Amarillo, while on the grounds of the plant and continued on foot. A civilian used his helicopter to assist, and the Texas Department of Criminal Justice brought in canines. When the suspect was located, he’d changed clothes. Coker said he was in possession of $12,000 to $15,000 worth of radios from the chemical plant, “where he apparently broke in and found the clothes he changed into.”[310][311]
May 27, 2017: Military-Style Tactics Used Against Protesters of Phillips 66 Funded Dakota Access Pipeline
The Des Moines Register reported on May 27, 2017 that TigerSwan, founded by retired members of the U.S. military's Delta Force unit, was employed by Energy Transfer Partners to target protesters opposed to the Phillips 66 funded Dakota Access Pipeline with military-style counter-terrorism measures and closely collaborated with law enforcement authorities in five states. The Intercept, a non-profit watchdog journalism organization, says it obtained internal TigerSwan documents that described the anti-pipeline movement as an "ideologically driven insurgency with a strong religious component" and compared the anti-pipeline activists to jihadist fighters. "While we can expect to see the continued spread of the anti-DAPL diaspora … aggressive intelligence preparation of the battlefield and active coordination between intelligence and security elements are now a proven method of defeating pipeline insurgencies," according to internal TigerSwan communications, the report said.
The leaked documents include situation reports prepared by TigerSwan operatives in North Dakota, South Dakota, Iowa, Illinois and Texas between September 2016 and May 2017, and delivered to Energy Transfer Partners, the report said. "They offer a daily snapshot of the security firm’s activities, including detailed summaries of the previous day’s surveillance targeting pipeline opponents, intelligence on upcoming protests, and information harvested from social media. The documents also provide extensive evidence of aerial surveillance and radio eavesdropping, as well as infiltration of camps and activist circles," according to The Intercept. David Goodner, an Iowa activist who helped to plan anti-pipeline protests in southeast Iowa's Lee County last fall, told The Register Saturday he believes The Intercept's report is the tip of the iceberg.
Adam Mason, state policy director for Iowa Citizens for Community Improvement, said The Intercept report confirms his belief that "big business and big ag" are pulling the levers of government in Iowa. "This is the perfect example where you see law enforcement and public safety officials working together for big corporations to the detriment of everyday people," Mason said.[312]
May 26, 2017: Phillips 66 Gets Go-Ahead to Sue San Luis Obispo County Supervisors Over Santa Maria Refinery Oil Train Terminal
The San Luis Obispo Tribune reported on May 26, 2017 that San Luis Obispo Superior Court Judge Barry T. LaBarbera said he will allow Phillips 66 to sue the San Luis Obispo County Board of Supervisors in a lawsuit that includes new allegations based on what happened at hearings on the project March 13 and 14 when speakers from across California urged the board to reject the so-called bomb trains. Supervisors voted 3-1 to deny the company’s plan to extend railroad at its Santa Maria Refinery on the Nipomo Mesa to allow deliveries of crude by rail from across North America.
The judge has now ruled against the county and environmental groups with a decision to allow Phillips 66 to file a new civil complaint. Environmental groups had argued that the company’s litigation was an attempt “to undermine and circumvent local agency jurisdiction.” LaBarbera said he would not address that issue and cited case law that said, generally, a judge will not consider the validity of the proposed complaint when deciding whether it can be filed. In its lawsuit, the company will ask the court to direct the board to set aside its findings about environmentally sensitive habitat at the location of the proposed project. The case will return to court in August.[313]
May 25, 2017: Phillips 66 Pays New Jersey $39 million Settlement Over Ground Water Contamination
KRGV reported on May 25, 2017 that New Jersey officials say they reached a $39 million settlement with Phillips 66 over ground water contamination. Attorney General Christopher Porrino says Phillips 66 (then ConocoPhillips) was one of 50 oil and chemical firms sued in 2007 by the state over ground water contamination. The state argued that the defendants were responsible for contamination from a gasoline additive called MTBE. In 2012 ConocoPhillips transferred some assets and liabilities, including MTBE cases, to Phillips 66. Phillips 66 Spokesman Dennis Nuss says the case was settled on "mutually acceptable" terms.[314]
May 23, 2017: Oklahoma Legislature In Turmoil over Taxing Oilmen to Fill the $878 million Budget Gap
Associated Press reported on May 23, 2017 that lawmakers trying to fix Oklahoma's $878 million budget gap, the state's worst budget problem in decades, has sent the legislature spiraling into chaos focusing blame on the usually sacrosanct oil and natural gas industry because a sharp cut approved two years ago in oil and gas production taxes has led to severe budget problems for schools and social services. Oklahoma's tax rate on oil and gas production has been 7 percent, similar to other oil producing states. But with tax revenues flush during the recent oil boom, the Legislature agreed to lock in a 2 percent rate for the first three years when wells are most productive. The cut soon backfired when oil prices declined and tax revenues began to shrink.
Earlier this month, Tulsa oilman and banker George Kaiser, one of the state's wealthiest residents, wrote a stinging open letter published in newspapers calling his industry's justification for its low tax rate a "myth." "We drill where God put the hydrocarbons, not where the tax rate is lowest," Kaiser wrote. Dozens of smaller, independent producers formed a lobbying group to call for revoking the tax break during a well's first few, most profitable years and a recent study of effective tax rates, including property taxes, paid by the oil and gas industry in nine major energy states shows Oklahoma's rate of 3.2 percent is the lowest. Neighboring Texas, the largest producer, had an effective rate of 8.3 percent.
But other industry leaders, including oil barons Harold Hamm, the chairman and CEO of Continental Resources, and Larry Nichols, founder and chairman emeritus of Devon Energy are fighting back. Ads attacking lawmakers who would consider a rate hike have been running on television and in newspapers, and large pieces of oilfield equipment were parked outside the Capitol to protest any change. Democrats in the Legislature, who are leading the push for higher rates, say the industry is turning a blind eye to the damage the revenue loss is causing to communities, especially schools, where arts, sports and Friday classes are being cancelled. "They don't want to pay their fair share," said House Democratic leader Rep. Scott Inman, whose members wouldn't agree to a rate lower than 5 percent on any new wells drilled. "If the oil and gas industry wins the day ... the people who lose are the citizens."[315]
May 17, 2017: Five Years After the Split Phillips 66 Stock Price Increased 150% While ConocoPhillips Declined
On May 1, 2012 Phillips 66 issued a press release announcing that Phillips 66 had emerged as an independent downstream energy company with industry-leading businesses in refining and marketing, midstream, and chemicals. Created through a spin-off of these assets from ConocoPhillips, Phillips 66 begins regular trading on the New York Stock Exchange this morning under the ticker symbol PSX. "Our strategic approach combines one of the world's most competitive refining and marketing operations with rapidly growing midstream and chemicals businesses," said CEO Greg Garland. "Phillips 66 will be clearly differentiated from pure-play refining companies with specific plans for enhancing returns and growing shareholder distributions. We have an exciting future ahead of us."[316]
Five years after the split ConocoPhillips stock has fallen 9% while Phillips 66 has increased 150%. ConocoPhillips cut its workforce 30 percent during the oil bust in 2015 and 2016 and reduced capital spending 70 percent since 2014. In February 2016, when oil prices fell to a 12-year low of just over $26 a barrel, the company cut its shareholder dividend by two-thirds to 25 cents a share. Meanwhile Phillips 66 began with an initial dividend of $0.20 and has recently increased their quarterly dividend to $0.70 per share.[317]
May 16, 2017: ConocoPhillips Stockholders Reject Executive Compensation Plan
The Houston Chronicle reported on May 16, 2017 that stockholders delivered a stern rebuke to ConocoPhillips rejecting its proposed compensation plan for top executives by a wide margin as more than two-thirds of ConocoPhillips' shareholders voted against or abstained in an advisory vote on its biggest paychecks, an unusually large upset for a Fortune 100 company. ConocoPhillips used Exxon Mobil Corp., Chevron Corp., Royal Dutch Shell and BP among its corporate benchmarks for executive compensation, according to regulatory filings but critics note that ConocoPhillips' stock price has slid by nearly half, to $47.13 a share $86 a share at the peak of the oil boom in 2014 leaving the company's stockmarket value at only half the size of its closest peer on the list, BP. "Conoco may see them as peers and competitors, but in today's world, it looks out of whack," said Chris Crawford, president of compensation consultancy Longnecker & Associates in Houston. While it appears ConocoPhillips has responded to shareholder concerns by reducing Lance's pay in recent years, it likely has not been quick enough for investors' tastes, he added.
ConocoPhillips cut its workforce 30 percent during the oil bust in 2015 and 2016 and reduced capital spending 70 percent since 2014. In February 2016, when oil prices fell to a 12-year low of just over $26 a barrel, the company cut its shareholder dividend by two-thirds to 25 cents a share. ConocoPhillips, meanwhile, continues to get smaller. This year it is on track to sell $16.3 billion in assets with the sale of natural gas holdings in the San Juan Basin that straddles New Mexico and Colorado and most of its Canadian oil sands assets.[318] Meanwhile Phillips 66 stock price has risen 150% since the company split from ConocoPhillips five years ago and their an initial dividend of $0.20 has increased to $0.70 per share.
May 15, 2017: Phillips 66 Funded Bayou Bridge Pipeline is Ready to go in Louisiana Despite Protests
"The Baton Rouge Business Report reported on May 15, 2017 that s the second phase of the controversial Bayou Bridge pipeline awaits permit approval from state and federal agencies, Stupp Corp. has more than 117 miles of the custom-ordered pipe, equating to 30,000 pipe tons, sitting at its Baton Rouge facilities, ready to go once the project gets the green light. Bayou Bridge is jointly owned by subsidiaries of Phillips 66 Partners, Energy Transfer Partners and Sunoco Logistics Partners. “The pipe will be ready to go once they tell us to start doing the load-outs,” says Chip McAlpin, Stupp’s vice president-corporate strategy and development. “One of the benefits of some of the reduced capacity or utilization in the pipeline industry right now is that we’re not as full, from a yard standpoint, as we have been in previous years, so we have existing space to store the pipe.”
Until the regulatory permitting process is complete, ETP is unable to provide a timeline for construction. While the Louisiana Department of Natural Resources granted a coastal use permit in early April, go-aheads are still needed from the Louisiana Department of Environmental Quality and U.S. Army Corps of Engineers before construction can begin. Energy Transfer Partners spokesperson Vicki Anderson Granado says starting early with the pipe milling was necessary to keep the project on schedule. “I guess you could say that it’s a little bit of a risk, but your infrastructure projects in this country would lag greatly if you waited until all of the permits were done before you started the milling process.” Besides, she adds, the 24-inch-diameter pipe could be used on other projects in a worst-case scenario.[319]
According to opponents of Bayou Bridge Pipeline, "the installation of over 160 miles of pipe and supporting infrastructure across 11 parishes will impact more than 600 wetland acres and cross almost 700 bodies of water, including the drinking water for hundreds of thousands of Louisiana residents. Each of the three companies involved in this project have woeful safety records, with leaks, spills, and explosions as norms."
May 12, 2017: Phillips 66 Donates $1 million to Oklahoma University Learning Space
NewsOK reported on May 12, 2017 that Phillips 66 will donate $1 million to Oklahoma University to support construction of a new academic building and research laboratory on OU's Engineering Quadrangle. OU President David Boren recommended the regents name the Diversity and Inclusion Learning Space to honor Phillips 66 in appreciation of the gift. The new learning space will feature a 70-inch monitor for project viewing, student printers and two small study rooms. It will include movable furniture that will allow students to create the study environment best suited for their projects and will encourage student and faculty interaction and collaboration.[320]
May 10, 2017: Phillips 66 Funded Dakota Access Pipeline Leaked 84 Gallons in April
AP reported on May 11, 2017 that Dakota Access pipeline, funded in part by Phillips 66, leaked 84 gallons of oil in South Dakota in April, which an American Indian tribe says bolsters its argument that the pipeline jeopardizes its water supply and deserves further environmental review. The April 4 spill was relatively small and was quickly cleaned up, and it didn’t threaten any waterways. The leak occurred at a rural pump station in the northeast of the state as crews worked to get the four-state pipeline fully operational. The oil was contained on site by a plastic liner and containment walls and quickly cleaned up. Some oil-contaminated gravel will be disposed of at an area landfill.
The Standing Rock Sioux tribe said the leak proves that the pipeline is a threat to its water and cultural sites. “These spills are going to be nonstop,” tribal Chairman Dave Archambault said. “With 1,200 miles of pipeline, spills are going to happen. Nobody listened to us. Nobody wants to listen, because they’re driven by money and greed.”[321]
May 9, 2017: Phillips 66 Makes Forbes List of Top 500 Employers with 5,000 or More Workers
Forbes reported on May 9, 2017 that Phillips 66 made their annual 2017 list of the 500 best large employers with 5,000 or more workers, placing #265 out of 500. Statista surveyed 30,000 American workers to gather their opinions of their employers. On a scale of zero to ten, it asked how likely they were to recommend their organization to friends or family. Those results were the most important factor in determining a company’s ranking on this list. Statista then asked employees to recommend other companies outside of their own. Those ratings also informed the ranking, but to a lesser degree. Among their category (Construction, oil and gas operations, mining and chemicals), Phillips 66 placed #11 out of 25 companies in that category.[322]
May 9, 2017: Book Published on John Joseph Matthews, Biographer of E. W. Marland
The Pawhuska Journal-Capital reported on May 9, 2017 that a biography of Osage writer John Joseph Mathews, author of "The Life and Death of an Oilman," the definitive biography of Ponca City oilman and Oklahoma governor E. W. Marland will be released on May 11, 2017. The book, “John Joseph Mathews: Life of an Osage Writer", is written by Michael Snyder, a teacher of English, humanities and Native American studies at Oklahoma City Community College. Snyder admitted to being fascinated with Mathews — a cerebral tribal leader who penned Osage historical works “Wah-Kon-Tah” and “The Osages: Children of the Middle Waters,” as well as the biography of E.W. Marland. “I hope all of my friends will read it, since it is an inherently fascinating story,” Snyder said, adding that writing the book “was a labor of love into which I invested years of my life.” The foreword to Snyder’s book was provided by Russ Tallchief, an Osage-descended administrator at Oklahoma City University.[323]
According to Edith Jamison Copeland, "what Matthews has achieved in Life and Death of an Oilman is revelation, in simple, beautiful language, of a complex personality in a world of many sides and many layers. Marland the lover of beauty, who longed to create a beautiful world for all those around him, whose every effort began in joy and enthusiasm and ended in frustration and defeat, is the central figure of every page. In the background, centering their careers upon Marland's or checkmating him to defeat, are many others; the bankers whom he feared; the "bright young men" who made up his organization; the Indians who watched his activities and commented sardonically "white men ack like tomorrow they ain't gonna be no more world' . The years of careful study and research which make the book authentic are well concealed beneath the smell of oil, the clink of dollars, and the writer's sense of brooding destiny which hangs over the pages. The result is worth more than a single reading."[324]
John Joseph Mathews (1894–1979) is one of Oklahoma’s most revered twentieth-century authors. An Osage Indian, he was also one of the first Indigenous authors to gain national renown. Yet fame did not come easily to Mathews, and his personality was full of contradictions. In this captivating biography, Michael Snyder provides the first book-length account of this fascinating figure. Born in the town of Pawhuska in Indian Territory, Mathews attended the University of Oklahoma before venturing abroad and earning a second degree from Oxford. He served as a flight instructor during World War I, traveled across Europe and northern Africa, and bought and sold land in California. A proud Osage who devoted himself to preserving Osage culture, Mathews also served as tribal councilman and cultural historian for the Osage Nation.[325]
May 9, 2017: Phillips 66 Wood River Refinery Donates $25,000 for Flood Relief Efforts
Riverbender reported on May 9, 2017 that Phillips 66 has made a $25,000 donation to the American Red Cross Greater St. Louis Chapter to help with flood relief efforts in the area communities that neighbor the Wood River Refinery and the company’s terminal and lubricants assets in the region. “Phillips 66’s generous gift of $25,000 provides for the critical needs of those that are impacted by the flooding in our region. Hundreds of local residents will receive comfort and care now and in the months to come thanks to the company’s commitment to the Red Cross,” said Cindy Erickson, Red Cross of Eastern Missouri CEO.[326]
Reuters reported on May 3, 2017 that Phillips 66 increased their quarterly dividend by 11 percent to $0.70 per share.[327]
May 3, 2017: Phillips 66 Doesn't See its Future in Refineries but in Chemicals and Pipelines
David Hunn wrote in the Houston Chronicle on May 3, 2017 that according to Phillips 66 CEO Greg Garland U.S. demand for gasoline is falling and that trend will continue so the company's future is not in refineries but in pipelines and chemicals. Garland says refining will begin to make up a smaller portion of its portfolio because gasoline demand is on a long slide downhill. An uptick in 2015, driven by cheap U.S. fuel and lots of driving, surprised the industry. But it didn't last. Millennials are driving less. They're using bikes, public transportation and ride-sharing companies like Uber more. Even the quintessential American truck, the Ford F-150, is getting better gas mileage. The new F-150 is 20 percent more fuel efficient than older models, Garland said. "In 10 years, if we're driving the same, we're going to see less need for transportation fuel," Garland said. "Given that as a backdrop, you don't want to invest in adding capacity in a declining market."
Phillips' long-term future lies in chemicals, executives said. Not only does the company have access to cheap natural gas as feedstock, Gulf ports also provide access to foreign markets, where expanding economies and rising middle classes are increasing demand for petrochemical products, particularly plastics. The U.S. shale revolution has opened vast underground reservoirs of inexpensive natural gas, a feedstock for chemicals and plastics. "The Middle East and U.S. Gulf Coast are going to be the two best places in the world to make petrochemicals, long-term," Garland said. Phillips has already begun expanding its pipelines and chemical facilities. Eighteen months ago, it opened a plant at its Old Ocean complex, southwest of Houston, to separate natural gas liquids into components such as ethane, butane and propane, which are used in making plastics and other petrochemicals. It built a massive ethane cracker at its Cedar Bayou plant in Baytown to break down natural gas and create ethylene, the most common building block of plastics.[328]
May 3, 2017: Phillips 66 CEO Garland Predicts Future Mergers and Acquisitions in the Refining Industry
Reuters reported on May 3, 2017 that Phillips CEO Greg Garland thinks that declining U.S. demand for transportation fuels will create opportunities for refining industry consolidations through mergers and acquisitions in the long term. "I do think the fundamental demand shifts are going to make for opportunities to consolidate at some point in the industry," Garland told reporters following the independent refiner’s annual meeting of shareholders. However, Garland said he does not foresee large-scale consolidations in the near term. "I don’t think you’re going to see big consolidations in the near-term."[329]
May 2, 2017: Five Reasons Why Phillips 66 Had a Strong Quarter
According to Matthew DiLailo at Motley Fool Phillips 66 had a strong quarter, trouncing the consensus estimate by a whopping $0.51 per share, which was roughly 10 times higher than the $0.05 per share analysts expected. As Greg Garland highlighted in his remarks during the Q1 conference call there were five reasons to believe that Phillips 66 is in a strong position going forward.
- Turnarounds are Complete: "During the quarter, we successfully completed several major turnarounds in Refining and Chemicals. This represents our highest level of turnaround activity in a quarter since the formation of our company," said Garland. "Our first quarter earnings largely reflect the impact of this downtime, but also highlight the benefit of our diversified and engraved portfolio." The successful completion of these projects and turnarounds in Refining and Chemicals should drive better results in future quarters.
- Chemicals are Strong: Garland noted that the joint venture with Chevron "had solid results on strong demand and improved margins." The O&P business was particularly robust, delivering $161 million in adjusted earnings, up 53.3% versus the fourth quarter thanks to improved margins, higher volumes, and lower costs.
- Midstream is Growing: Garland said that Phillips 66 "continue[s] to successfully execute our Midstream growth program," noting that several of its largest growth projects are either complete or nearing completion, including the Freeport LPG Terminal, which operated at capacity during the quarter, driving a significant improvement in NGL-related earnings.
- Phillips 66 Partners continues to Execute to Plan: Garland reiterated that its MLP, Phillips 66 Partners, remains an important part of our midstream growth strategy." Garland reaffirmed the expectation that Phillips 66 Partners will "reach its growth goal of $1.1 billion in run-rate EBITDA by the end of 2018."
- Dividends Should Continue Trending Higher: "[Phillips 66] continue[s] to maintain our commitment to our distributions to our shareholders," said Garland. "During the first quarter, we returned over $600 million to shareholders in the form of dividends and share buybacks. We remain committed to our strategy: executing our growth plans, enhancing returns and rewarding our shareholders. The projects we have coming online, they're well positioned to increase cash flow. We believe our integrated downstream portfolio remains a differentiating factor that provides upside in a rising U.S. production environment."[330]
April 29, 2017: Ponca Playhouse Announces Auditions for "Lydie Marland in the Afterlife"
Ponca Playhouse announced on April 29, 2017 that auditions for the play "Lydie Marland in the Afterlife" will be on Monday, May 8 and Tuesday, May 9 at Ponca Playhouse at 301 S 1st St in Ponca City, Oklahoma, OK 74601-5237. Ponca Playhouse's production will be the world premier of an expanded version of the original play originally presented at "The Festival of Independent Theatres" in Dallas, Texas in May, 2013. This expanded version was written especially for production in Ponca City by Ponca Playhouse by playwright by Isabella Russell-Ides. The play will be sponsored and produced by Hugh Pickens and Dr. S. J. Pickens.
In a first for Ponca Playhouse, the play will have two directors, Sam Stuart and Ryan Brown, who will each direct their own separate cast of two actresses. Auditions will be coming up on Monday, May 8 and Tuesday, May 9 at 730 pm at the Playhouse. We will be looking for two women for each cast for a total of four women. "Young Lydie" will be an actress about 17 - 26 years old. "Old Lydie" will be an actress who will be made up to look 87 years old and then 50 years old. The Playhouse will present the separate casts on alternating days of performance. The play will run on July 13, 14, 15, 16, 20, 21, 22, 23. Tickets will go on sale in June and will be $20.
April 28, 2017: Phillips 66 is Pursuing High-Return Quick-Payout Projects in Refining
Greg Garland told analysts during the quarterly earnings conference call on April 28, 2017 pursuing high-return quick-payout projects in refining. "At the Billings Refinery, we're increasing heavy crude processing capability to 100%. This project is expected to be finished later this quarter. At Bayway and Wood River Refineries, we're modernizing SCC units to increase Phillips 66 is clean product yield. Both of these projects are expected to complete in the first half of 2018." Garland added that during the quarter, Phillips 66 had major turnarounds at the Ferndale, Bayway, Lake Charles and Wood River refineries. "So during the quarter, we successfully completed several major turnarounds in Refining and Chemicals. This represents our highest level of turnaround activity in a quarter since the formation of our company."[331]
April 28, 2017: Phillips 66 Reports First Quarter Gain After Disappointing Year
FueldFix reported on April 28, 2017 that Phillips 66 saw an improvement in its first quarter earnings in 2017, following a disappointing year in which the company’s profits fell 75 percent from 2015. Low to non-existent profit margins made 2016 a rough year for U.S. refiners, as oil prices rose and gasoline prices remained low. Companies can expect to see an improvement this year, as fuel prices are expected to increase for much of 2017. “We have successfully completed several major turnarounds in refining and chemicals,” said Greg Garland, chairman and CEO of Phillips 66. “First-quarter earnings reflect this downtime and also highlight the benefit of a diversified portfolio. Our Chemicals business had solid results on good demand and improved margins. The Freeport LPG Export Terminal is fully operational, and we have several Midstream and Chemicals projects nearing completion.”[332]
April 28, 2017: Phillips 66 Refineries Only Ran at 84 Percent Capacity in Q1 2017
Reuters reported on April 28, 2017 that Phillips 66's refineries ran at 84 percent of capacity in the first quarter, primarily due to overhauls at refineries in California, Illinois, Louisiana and New Jersey but expects its refineries to run in the mid-90 percent range of their combined capacity in the second quarter. Greg Garland thinks demand for motor fuels will decline in the United States over the next few years due to changes in automobile efficiency and does not expect to increase refining capacity. "To invest in refining to add capacity still doesn't make sense to us," Garland said. "I think to invest to reduce your cost structure, gain access advantage to crudes and some yield, those are all good investments that we should be making."[333]
April 28, 2017: Phillips 66 Gives $30,000 to Ponca City Public Schools for Stem Education
The Ponca City News reported on April 28, 2017 that Phillips 66 has given a $30,000 grant to Ponca City Public Schools to support the implementation of hands-on science kits in the elementary schools including kits on Exploring Forces in Motion-Kindergarten; Organisms-first grade; Floating and Sinking-second grade; Butterflies-third grade, Electric Circuits-fourth grade and Ecosystems-fifth grade. “I am a big believer in our hands-on science kits,” said Teri Vogele, Ponca City School Associate Director of Elementary Curriculum. “I believe these kits are highly beneficial to our students. Through these kits they receive an engaged, hands-on experience rather than a canned science curriculum from a textbook. They are actually working through the scientific process, making predictions, gathering and graphing data and developing engineering and technology skills.[334]
April 27, 2017: Phillips 66 to Shut Down Billings Refinery for 56 Days in Major Turnaround
The Billings Gazette reported on April 27, 2017 that Phillips 66's Billings Refinery is undergoing a complete shut down as it ramps up for major maintenance and improvements that include replacing the refinery's 68-year old fluid catalytic cracker and adding a process to enable it to process more heavy Canadian crude oil. The “turnaround,” which occurs every five years, will take almost two months to complete and cost several hundred million dollars with 2,500 employees and contractors working on site during its peak. The gradual plant shut down began on April 15, with a total shut down by the beginning of May, said Ryan Wegner, the refinery’s finance and public affairs manager. The refinery will go back online by June. The total turnaround will take about 56 days. One major maintenance item will be to replace the refinery’s fluid catalytic cracker, or FCC, which is a major processing unit that breaks heavy gas oil into other products like gasoline. The FCC is the original unit installed 68 years ago when the plant was built in 1949, Wegner said. Although regular maintenance has kept the unit running, the company decided it was time to replace it, he said. Also included in the turnaround will Phillips 66’s Vacuum Improvement Project, which will allow the refinery to to handle up to 100 percent heavy Canadian crude oil.[335]
April 26, 2017: Phillips 66 Pays $61,000 Fine for Environmental Violations at Borger Refinery
News Channel 10 reported on April 26, 2017 that Phillips 66 settled for almost $61,000 for the release of pollutants including hydrogen sulfide and sulfur dioxide from its oil refinery near Borger in what the state of Texas has called "violations of environmental laws".[336]
April 26, 2017: Ponca Playhouse to Present "Lydie Marland in the Afterlife"
Ponca Playhouse announced on April 26, 2017 that they will be presenting the play "Lydie Marland in the Afterlife" this summer as part of the "Oklahoma Pride" series, now in its sixth year. Ponca Playhouse's production will be the world premier of an expanded version of the original play originally presented at "The Festival of Independent Theatres" in Dallas, Texas in May, 2013. This expanded version was written especially for production in Ponca City by Ponca Playhouse by playwright by Isabella Russell-Ides. The play will be sponsored and produced by Hugh Pickens and Dr. S. J. Pickens.
Loosely based on the life of Lydie Marland, as told in the book “The Marland Tragedy,” Lydie was the niece and adopted daughter, then wife of oil magnate and Oklahoma governor, E.W. Marland. Her life was a fairy tale of riches turned Greek tragedy. From wife of one of the wealthiest men in the world to wayward bag lady, she was lost for twenty-two years in the landscape of America.
In the play the lights come up on the heroine returning to consciousness shortly after her death. Lydie had been a vagabond for decades after the economic downfall and death of her oil-baron husband. As she begins to recall her glorious early days, her younger self enters, an apparition in her marcelled hairdo and white frock. The playwright Russell-Ides takes a novel approach to the mystery of what awaits us on the other side and constructs a believable journey that leaves room for hope, redemption, and reflection on a life lived.
Playwright Russell-Ides makes clear that Lydie was no gold-digger. But from the time Lydie (and her teenage brother George) were adopted by their aunt and uncle, Mary Virginia and E. W. Marland, they were treated to extravagance beyond comprehension, after a life of struggle and impoverishment. It’s implied Lydie simply wanted her dazzling, blissful new existence to continue without interruption. Her doting uncle ushered her into a completely different milieu, filled with parties, travel, luxury and pleasure. “Lydie Marland in the Afterlife” makes it easy to understand why she was willing to wed her adoptive dad and uncle.
Russell-Ides’ play, in which the older, dead Lydie confronts her younger self, is a fascinating rumination on choices and tries to answer the question, “'If you could give yourself advice from years of experience, what would you say?” but really it answers, “What would your younger self say back?” And would you even trust old-you?
“Lydie Marland in the Afterlife” is an engrossing, amusing, richly depicted portrait of a woman who was flawed, and just as subject to the cruelties of fate as the rest of us. More than just creating a sympathetic case for Lydie Marland, Isabella Russell-Ides draws us into her exhilarating life, revealing a woman who jumped in headfirst, whether she was on a European spending spree, fox hunt, protest march or cleaning motel bedrooms. Whatever the outcome she embraced the world with sentience and verve.
Russell-Ides got the idea for “Lydie Marland in the Afterlife” eight years ago while she and her husband were returning to Dallas after visiting family in Kansas. “We saw a sign on I-35 advertising the Marland Mansion,” says the playwright. “We visited the mansion and fell in love with its beauty and its history.”
"Russell-Ides said it was the broken marble statue, one made in Lydie’s youth that had been supposedly destroyed before she disappeared, that made her fall in love with the story," says Mary L. Clark. “She called it 'a case of broken identity.'”
The play will run on July 13, 14, 15, 16, 20, 21, 22, 23. Tickets will go on sale in June and will be $20.
April 20, 2017: Phillips 66 Reports Sulfur Dioxide Emissions at Borger Refinery
Fox Business reported on April 20, 2017 that Phillips 66 reported above-normal gas emissions of Sulfur Dioxide at its Borger Refinery. "A release of SO2 [sulfur dioxide] to air at Unit 43 SRU [sulfur recovery unit] Incinerator Stack exceeded 500 pounds," the refinery said in a statement to the Texas Commission on Environmental Quality. "An investigation into the cause of the incident will be conducted." The emissions lasted less than two hours.[337]
April 17, 2017: Phillips 66 Won't Appeal Decision to Stop Oil Trains Coming to Santa Maria Refinery But the Fight is Not Over
The San Luis Obispo Tribune reported on April 17, 2017 that Phillips 66 won’t appeal San Luis Obispo County’s decision rejecting its oil-by-rail plan to the California Coastal Commission, but it will continue the fight in court. “The window is closed, and they did not file an appeal. The Board of Supervisors’ decision stands,” said Cassidy Teufel, a senior energy scientist with the Coastal Commission.
However in an amended petition filed against the county on March 22, 2017 in San Luis Obispo Superior Court, Phillips 66 contends the county missed a filing deadline over the issue of environmentally sensitive habitat and also that the zoning law is unconstitutional because it doesn’t allow Phillips an opportunity to be heard. If Judge Barry LaBarbera agrees with the company, the county Planning Department would have to revisit its findings, triggering a new land-use decision. His decision could be challenged to an appellate court. “They knew they were going into strong headwinds (if Phillips filed an appeal with the Coastal Commission). Now they’re going to try to make an end run around on a technicality,” said Laurance Shinderman, a volunteer with the rail spur-opposition group, Mesa Refinery Watch Group. “A good neighbor wouldn’t do that."[338]
April 13, 2017: Controversial Phillips 66 Funded Dakota Access Pipeline to Start Interstate Service May 14
Reuters reported on April 13, 2017 that the controversial Dakota Access Pipeline, funded in part by Phillips 66, will begin interstate crude oil delivery on May 14, 2017. Thousands of protesters demonstrated in North Dakota and Washington, D.C., many staying to support the tribe in a makeshift camp near the pipeline's construction site last fall. Many opponents also said reliance on the pipeline and the petroleum it was intended to carry would exacerbate climate change. Among Trump's first acts in office was to sign an executive order that reversed a decision by the Obama administration to delay approval of the pipeline.[339]
April 13, 2017: Phillips 66 Borger Refinery to Donate $100,000 to Area Fire Departments
News Channel 10 reported on April 13, 2017 that Phillips 66 plans to donate $10,000 each to ten area volunteer fire departments near its Borger Refinery following devastating wildfires across the Texas Panhandle. Volunteer fire departments in Fritch, Whitedeer, Stinnett, Panhandle, Skellytown, Spearman, Wheeler, Lefors, Gruver, and Mobeetie will each receive $10,00 in a presentation at Frank Phillips College in Borger on April 18. "In March 2017, volunteer fire departments worked tirelessly to control the fire and protect the safety of neighbors. With safety as a top priority, Phillips 66 is committed to helping communities recover after natural disasters, and fire departments are a critical piece of community safety infrastructure," said the company in a news release.[340]
April 5, 2017: Small California Towns Are Facing Off Against Oil Companies Like Phillips 66 and Winning
Grist reported on April 5, 2017 that on March 14, 2017 the San Luis Obispo County Board of Supervisors shut down a Phillips 66 crude-by-rail plan to bring oil into its Nipomo Mesa refinery. The 3-to-1 vote (with one recusal) against the proposal represented a huge change in a county that for years had supported refinery projects. “[This] is a pretty new effort to work with leaders and community organizations to engage in local elections that are critical for climate and environmental justice issues,” said Whit Jones, the East Coast–based campaign director for Lead Locally, a new project of the Advocacy Fund and which provided electoral support in Benicia, Oxnard, and Arvin. “We partnered with community organizations in California last year to make sure that voters’ demands to stop oil train terminals, or to stop fracking, were heard at the ballot box.” Another new group, Leadership for a Clean Economy, also worked in these communities, in partnership with many local environmental justice organizations.
With the U.S. Environmental Protection Administration now headed by Scott Pruitt, a climate change denier, environmentalists may attempt more victories at the local level. “They’re simpler, in a way,” Jones said of local policy campaigns. “The people in the community understand the issues because these things are proposed in their backyards. This isn’t some obscure, abstract conversation about the nation’s energy policy or climate change; this is about whether or not a polluting facility will be sited in their town.”
Other California towns have also successfully fought large oil companies. In the Kern County town of Arvin, which 10 years ago won the dubious distinction of having the smoggiest air of any U.S. city, a 23-year-old city councilman was elected mayor on a promise to regulate the oil industry and protect the city’s water and air — a huge task in California’s biggest oil-producing county. Benecia, a small refinery town in Northern California stood up against its biggest employer and taxpayer. Valero, the Texas-based petroleum giant, had sought routine approval for a huge crude-by-rail project. The city council of Benicia, however, decisively rejected Valero’s proposal. “We had a small, but extremely well-informed group of people who have been working on these issues for a long time,” said Benicia Mayor Elizabeth Patterson, “and I give all the credit to that group.” Patterson is a longtime environmentalist who has been mayor since 2007 and was reelected in November.[341]
April 5, 2017: Controversial Phillips 66 Funded Bayou Bridge Pipeline Gets Approval from Louisiana Department of Natural Resources
The Advocate reported on April 5, 2017 that Louisiana's Department of Natural Resources has granted a coastal use permit for the controversial Bayou Bridge oil pipeline, funded in part by Phillips 66, though more approvals will needed before the project can break ground. Although Bayou Bridge has DNR's blessing, it still needs the Louisiana Department of Environmental Quality and the U.S. Army Corps of Engineers to sign off on the design before construction can start. DEQ is still going through hours of testimony and some 20,000 public comments submitted since a public hearing in January, said spokesman Greg Langley. Upon review, the department will determine whether to award a water quality certificate.
Conservationists have opposed the pipeline, saying it would damage south Louisiana wetlands and put wildlife and residents at risk of oil-contaminated water. Scott Eustis, of the Gulf Restoration Network, criticized the state's limited focus. His group called on DNR to require the pipeline company to dig deeper under Bayou Lafourche to safeguard the water supply against any leaks. "We don't understand how DNR can't consider — isn't considering — the safety of the drinking water for 300,000 people in Louisiana," he said. Proponents of the pipeline have said Bayou Bridge would be far safer than carting oil via trucks, trains and boats, and an industry-funded LSU study estimates it would generate $829 million in economic activity, mostly during construction.[342]
April 5, 2017: How Trump's Border Tax Would Hit U.S. Refiners Like Phillips 66
Nilanjan Choudhury wrote at Zacks on April 5, 2017 that the Republican-controlled House of Representatives’ plan for a Border Tax include trimming the corporate income tax from 35% to 20%, while imposing a 20% tax on all imports and exempting export revenue from taxable income. This will affect refining companies like Phillips 66 that use oil as an input from which they derive refined petroleum products like gasoline, the prime transportation fuel in the U.S. According to Choudhury, Phillips 66 imported 130 million barrels of crude last year. A proposed border tax adjustment would significantly increase the cost of that imported oil, which makes up about 40% of the refining industry’s daily input needs. "The ruling will almost certainly lead to refiners’ looking to increase their usage of untaxed domestic oil, ensuing a jump in U.S. crude demand and prices," writes Choudhury. "This will translate into higher input costs for all refiners almost immediately. With margins already narrow, the companies wouldn’t hesitate to offload a major part of the additional burden to end-users. As refiners pass on their higher feedstock cost to the consumers, American drivers will face higher retail gasoline prices – estimated between 30 cents a gallon to $1 a gallon."[343]
The Houston Chronicle reported on February 3, 2017 that Phillips 66 CEO Greg Garland said that a proposed border tax on imports would cause gasoline prices for American drivers to skyrocket as much as 40 cents a gallon. "It's going to get mostly passed through," Garland told analysts during an earnings call. Garland noted that the tax proposal has pros and cons for his company. It would mean higher taxes on refining, but also lower taxes on corporate profits and the company's petrochemical exports. The proposal also could cause oil prices to rise and boost profits for U.S. exploration and production companies.[344]
April 4, 2017: Phillips 66 Proposes to Close Warwick Office in UK Eliminating 59 Positions
The Warwick Courier reported on April 4, 2017 that Phillips 66 confirmed that there are proposals to shut down its 120-employee office in Warwick in the UK. It is currently unknown what will happen to the 120 jobs people hold at the office but it is believed the organisation will try and relocate some of the jobs to its other two sites in London or at its Humber Refinery in Lincolnshire.
“Phillips 66 is committed to its future in the UK, as demonstrated by continued investment," said a spokesman for Phillips 66. "The UK businesses recently initiated a review to ensure it was well-positioned for a sustainable future in a challenging and ever-evolving market. The review has resulted in a proposed repositioning of our business. The proposal streamlines our support functions and consolidates the business into two core locations: the Humber Refinery, the heart of our UK business, and London, the commercial and trading centre of the UK. As a result it is proposed that our Warwick office will be closing first quarter 2018. The proposed repositioning is subject to the completion of the necessary Information and Consultation processes. It is proposed that the majority of our Warwick-based Marketing roles, with some exceptions, will re-locate to our Aldersgate office in London. In total 116 Warwick-based employees are impacted by this proposed repositioning. Whilst we hope to be able to relocate a significant number of employees from Warwick and have them continue their roles from our London or Humber office, we do recognise the challenge of this proposed change. We expect that a number of employees will elect not to relocate, and we anticipate 59 roles (of which 12 of these are currently vacant) will be eliminated across the three locations as a result of the proposed repositioning."[345]
April 4, 2017: Phillips 66 Funded Dakota Access Pipeline Is Complete
FuelFix reported on April 4, 2017 that construction of the Dakota Access Pipeline, funded in part by Phillips 66, is complete and the pipeline is now being filled with crude to prepare it for service in mid-April. Energy Transfer Partners expects it to take a few more weeks to fill the line with oil. Then the company will fill the next line in the system. The company expects the full Bakken system to be in service by June 1.
Dakota Access was the focus of heated protests and sometimes violent clashes with authorities for months last year. Environmentalists saw it as a symbol of global warming and the proliferation of fossil fuel use. The Standing Rock Sioux, who tapped the Missouri River for tribal water, argued that the pipeline’s river crossing threatened the tribe’s main water source, and also traversed sacred burial grounds.[346]
April 3, 2017: Deadline Looms for Phillips 66 to Appeal Rejection of Santa Maria Refinery Rail Project
The San Luis Obispo Tribune reported on April 3, 2017 that Phillips 66 only has until April 14 to appeal San Luis Obispo County’s rejection of its proposed Santa Maria Refinery oil-by-rail project to the California Coastal Commission. The county issued a notice of final county action last week, announcing that Phillips 66 had exhausted its appeals at the county level and can now appeal the matter to the Coastal Commission, triggering a 10-business-day countdown to the filing deadline. The company has not announced whether it will appeal to the commission.[347]
April 2, 2017: Protests Against Phillips 66 Funded Dakota Access Pipeline Provide Blueprint for Actions Against Other Pipelines
Associated Press reported on April 2, 2017 that although prolonged protests against the Dakota Access pipeline, funded in part by Phillips 66, have failed to stop the flow of oil through at least for now, they have provided inspiration and a blueprint for protests against pipelines in other states including the Bayou Bridge Pipeline in Louisiana, also funded in part by Phillips. Despite the setbacks, Dakota Access protest organizers don't view their efforts as wasted. They say the protests helped raise awareness nationwide about their broader push for cleaner energy and greater respect for the rights of indigenous people. "The opportunity to build awareness started at Standing Rock and it's spreading out to other areas of the United States," said Dave Archambault, the chairman of the Standing Rock Sioux tribe, which has led the legal push to shut down the pipeline project. The tactics used in North Dakota — resistance camps, prominent use of social media, online fundraising — are now being used against several projects including the Sabal Trail pipeline that will move natural gas from Alabama to Florida; the Trans-Pecos natural gas pipeline in Texas; the Diamond pipeline that will carry oil from Oklahoma to Tennessee; and the Atlantic Sunrise pipeline that will move natural gas from Pennsylvania to Virginia. "A big part of our message was not just to nationalize the fight against Dakota Access, but to highlight regional issues that people are facing," said Dallas Goldtooth, an organizer with the Indigenous Environmental Network. "To use our momentum."
Hundreds, and sometimes thousands, of Dakota Access opponents congregated at the main protest camp for half a year, often clashing with police to draw attention to their cause. More than 750 people were arrested between early August and late February, when the camp was closed in advance of spring flooding season. The prolonged protest garnered widespread and consistent attention on social media, and it has filtered down, to some degree, to the pipeline protests elsewhere. That has elevated activists' concerns from local demonstrations to a national stage, according to Brian Hosmer, an associate professor of Western American history at the University of Tulsa.
For now, the energy industry and its allies say they're unconcerned. The Dakota Access movement wrote the new playbook for pipeline opponents, but it might be less effective under Trump, said Craig Stevens, spokesman for the MAIN Coalition, a group of agriculture, business and labor entities that long spoke in favor of the pipeline. Trump approved its completion shortly after taking office and he has taken other steps favorable to the fossil fuel industry while rolling back Obama-era environmental protections.[348]
April 2, 2017: Work Moves Ahead at Ponca Refinery to Modernize No. 1 Crude Unit
The Ponca City News reported on April 2, 2017 that work is moving ahead at Ponca Refinery in the project to modernize No. 1 Crude Unit by replacing two old furnaces with one high efficiency furnace. Workers at Ponca Refinery recently set the new 80-foot tall, 70,000 pound stack on top of the new furnace.[349]
The No. 1 Crude Topping Unit (CTU) is one of three crude units in the refinery that process raw crude oil in parallel. Crude topping units are the first major refinery processes that meet crude oil and fractionate it into several different boiling fractions. These streams are normally charged to downstream units for further processing. For simplification, the No. 1 CTU can be divided into five basic sections; preheat train and desalter, preflash drum, atmospheric crude tower, tar stripper, and vacuum tower. Raw crude oil is pumped with charge pumps through the raw crude preheat train, which is a series of heat exchangers that transfer heat from the CTU product, pumparound, and recycle streams to the raw crude oil, to the crude oil desalters. The desalters use temperature, pressure, injected water, emulsion breaker chemicals, electric field, and residence time to remove metallic salts, water, and other impurities, thereby preventing fouling of downstream heat exchangers, salt formation in furnaces, and equipment corrosion. The crude oil from the desalters is pumped by desalted crude pumps through two more preheat trains that operate in parallel. Hot crude from the two preheat trains combines and flows to crude flash drum, D-29. By the reduction of pressure, part of the hot crude oil is vaporized in the crude flash drum and flows to crude tower W-1. The hot liquid from the crude flash drum is pumped through additional heat exchangers and then crude charge furnace H-1 before entering W-1.
Crude Tower W-1 uses distillation to remove the lightest gravity products from the crude oil. The product streams from W-1 are wet gas overhead, light straight run gasoline (LSR), reforming naphtha, kerosene, heating oil distillate (HOD), atmospheric gas oil, and reduced crude tower bottoms. The crude tower bottoms stream is heated in furnace H-5 and then fed to tar stripper tower W-21. The tar stripper tower uses an atmospheric flash to remove light gas oil (LGO) and heavy gas oil (HGO) from the W-1 reduced crude. The tar stripper bottoms stream is heated in vacuum furnace H-16 and then fed to vacuum tower W-17. The No. 1 CTU vacuum tower uses sub-atmospheric pressures to separate the remaining heavy hydrocarbons into light vacuum gas oil (LVGO), heavy vacuum gas oil (HVGO) and a resid bottoms product stream.[350]
March 31, 2017: Proposal to Limit Greenhouse Gases Could Affect Phillips 66's Rodeo Refinery
The Mercury News reported on March 31, 2017 that 120 people attended the workshop that the Bay Area Air Quality Management District held about its two proposed rules aimed at limiting air pollution from five Bay Area oil refineries near San Francisco including Phillips 66's Rodeo Refinery. Environmentalists and some plant neighbors said a proposed numeral cap on greenhouse and other emissions is needed to prevent increased pollution if plants switch to dirtier crude oil sources such as from Canadian tar sands areas. “We think this cap is needed to prevent serious and irreversible effects,” said Greg Karras, a senior scientist with Communities for a Better Environment, a statewide environmental group with offices in Oakland. “The rule is designed to allow other measures to reduce emissions, but we have to stop increasing them first.”
Some oil industry workers attacked the cap. They said refineries have reduced their air emissions dramatically over the past four decades and yet the proposed cap could lead to production cuts and losses of high-paying jobs. “I am very concerned the cap would cost jobs,” said Mike Miller, president of the United Steelworkers Local 326 unit chair representing workers at the Phillips 66 refinery in Rodeo. While the push to reduce fossil fuel use will produce more solar industry jobs, Miller said, it would be difficult for refinery workers with homes and families to survive on $13-an-hour jobs as solar installers. Air pollution district managers do not support the cap. They said they fear the cap would be vulnerable to a legal challenge as unfairly singling out the oil industry. The cap also could interfere with the state’s cap-and-trade system in which industries can buy pollution credits to offset their greenhouse gas emissions.[351]
March 31, 2017: Protesters of Phillips 66 Funded Bayou Bridge Pipeline Plan More Resistance
The New Orleans Times Picayunme reported on March 31, 2017 that dozens of protesters opposed to the Bayou Bridge Pipeline, funded in part by Phillips 66, organized at a traffic circle near the University of New Orleans and marched to deliver a letter expressing their opposition to the nearby local office of the Louisiana Department of Natural Resources, an agency whose approval the project needs. "The installation of over 160 miles of pipe and supporting infrastructure across 11 parishes will impact more than 600 wetland acres and cross almost 700 bodies of water, including the drinking water for hundreds of thousands of Louisiana residents," the letter reads. "Each of the three companies involved in this project have woeful safety records, with leaks, spills, and explosions as norms." Anne Rolfes with the Louisiana Bucket Brigade indicated this would be just the first protest from the environmental group aimed at stopping the pipeline Energy Transfer Partners wants to stretch from Nederland, Texas, to St. James Parish. Phillips 66 and Sunoco have joint interests in the $670 million undertaking.
Advocates say the Bayou Bridge Pipeline offers a far safer alternative to shipping crude and natural gas by truck or train. Plus, it would give Louisiana its biggest share yet of resources that have largely been confined to neighboring facilities in Texas. "It's the safest and most economical way to transport crude," Gifford Briggs, vice president of the Louisiana Oil and Gas Association, said last month. "People should be celebrating this project."[352]
March 28, 2017: After Oil Train Rejection, Phillips 66 May Increase Number of Oil Trucks into Santa Maria Refinery
The San Luis Obispo Tribune reported on March 28, 2017 that now that the San Luis Obispo County Board of Supervisors has rejected the plan to import up to 6.6 million gallons of crude each week by train, Phillips 66 may increase the number of trucks bringing oil to the Santa Maria Refinery. It would take an average of 819 tanker truck deliveries a week to the refinery to match the supply that could have been delivered every week by three 80-car trains according to data available in an environmental impact report prepared for the rail project that the supervisors rejected. Hundreds of tanker trucks a week already deliver oil to the refinery and to a pump station in Santa Maria to fill a supply gap created by the shutdown of the Plains All American Pipeline in Santa Barbara County in May 2015. Phillips 66 has not said exactly how many oil tanker trucks are delivering to the refinery, but a current land-use permit limits all truck traffic — whether bringing in crude or moving out petroleum coke product — to an average of 367 trucks a week.
The possibility that Phillips 66 could again increase oil trucking to the refinery was cited by Supervisor Debbie Arnold as one of the reasons she cast the sole vote on March 15 to allow Phillips 66 to build a 1.3-mile rail spur from its Nipomo Mesa refinery to the main rail line, opening up access to oil fields across North America. “My fear is the decision today puts more trucks hauling flammable materials on our roads, our already crumbling roads, with our many, many distracted drivers, creating a higher risk for accidents than train transport would,” Arnold said during that Board of Supervisors meeting.
Nipomo residents say the Phillips 66 trucks travel all hours of the day and night, from Highway 101 to Willow Road to the refinery off Highway 1. The drivers “drive safely and slow,” said Laurance Shinderman of the Mesa Refinery Watch Group, which opposed the oil-by-rail proposal because of the potential for a catastrophic derailment. “They’re not barreling down the road,” Shinderman said of the trucks. “They are professional drivers, you can tell.”[353]
March 26, 2017: Residents near the Santa Maria Refinery Built a Successful Movement to Keep Phillips 66's Oil Trains Out of Their Town
The Los Angeles Times published a story on March 26, 2017 about how a group of 12 California citizens started a movement with one burning mission: to keep Phillips 66's oil trains out of their backyard in Nipomo, California near Phillips 66's Santa Maria Refinery.
In December 2013, a couple of neighbors from an upscale residential development on California's Central Coast attended a community meeting at a middle school in Arroyo Grande to learn about a new project proposed by oil giant Phillips 66 for its Santa Maria refinery, which sits near the ocean below the Nipomo Mesa, where they live. For more than two years, Martin Akel emailed a professional-caliber, monthly newsletter to about 2,000 supporters, 1,000 government officials and several hundred members of the media. At public hearings, the oil train opponents delivered lots of grim news about the dangers of crude oil trains, which they called “bomb trains,” but overall they were upbeat. Wearing referee shirts, they would set up tables adorned with bowls of candy. “We’d say, ‘Stop by the zebra table and we will orient you,” said Akel. “If they spoke, we would give them candy. I spent a lot of money on candy, and I didn’t put in for reimbursement.”
What the neighbors, mostly retired professionals who had moved here from places such as Irvine and New Jersey, loved most about the area was its bucolic splendor, lower cost of living, and slower pace. Phillips 66 had always shipped oil to and from the Santa Maria refinery by pipeline. Now it was proposing a new way to deliver the crude: by train. And it would have to build a new rail spur at its refinery to accommodate mile-long oil trains, coming in on Union Pacific’s main line, at the rate of three a week, each carrying 2.2 million gallons of crude.
Each time Phillips 66 or its proponents claimed that oil trains were safe, that the kind of oil it wanted to transport was safe, or that Union Pacific tracks are safe, the Mesa Refinery Watch Group was able to point and laugh. They researched every oil train derailment and explosion, the type of oil transported, the type of tankers used, and track conditions. “They said we aren’t going to bring in any oil that’s dangerous,” Akel said, “and we stood up at a meeting and said, ‘Are you bringing in Bakken crude from North Dakota?’ And they said, ‘We may.’ We went crazy on that. Bakken crude killed 47 people in Lac-Mégantic [Quebec].” “Obliterated a whole town,” said Laurance Shinderman. When Phillips said it would transport crude oil in “the absolute safest tankers that exist,” said Akel, the group did its homework. There are no fail-safe tankers. “Guess what? When they fall over, they rupture and everything goes boom.”
“Phillips 66 used to come to Trilogy every year and ply residents with shrimp and booze,” said Akel. “Around Christmas,” said Gary McKible. “It was a goodwill thing.” “They haven’t been for two years,” said Akel. “Maybe it was something we said.”[354]
- October 23, 2015: LA Times Reports that California Retirees are Taking on Phillips 66 "More than a year ago, after I met with the Mesa Refinery Watch Group for the first time, I was impressed by their savvy, commitment, honesty and dedication. I predicted they would win this fight," wrote Robin Abcarian. "And so they have."
March 24, 2017: Phillips 66 Bayway Refinery to Sponsor Union County Falcon Cam
Tap into Union reported on March 24, 2017 that Phillips 66 Bayway Refinery will be sponsoring educational programming around the Union County Falcon Cam bringing no-cost wildlife education programs to administrators, teachers, and students throughout Union County, New Jersey. Thanks to this new partnership, students, scientists, and other wildlife enthusiasts all over the world will have more opportunities to study a pair of rare peregrine falcons that have made their nest on the roof of the historic 17-story Union County Courthouse Tower, located in the bustling center of midtown Elizabeth. “The Phillips 66 company vision is providing energy, improving lives. Our Phillips 66 sustainability efforts are built on four pillars: operational excellence, environmental commitment, social responsibility, and economic performance. Bayway Refinery is proud to demonstrate our social responsibility with the sponsorship of the Peregrine Falcon Educational Programs in Union County. We are excited to be part of a program that will help make learning fun and inspire children within our community,” said Mike Bukowski, Bayway Refinery Manager.[355]
March 22, 2017: Greg Garland's Salary Increases from $22.9 million in 2015 to $25.1 million in 2016
Reuters reported on March 22, 2017 that according to SEC filings Phillips 66 CEO Greg Garland's salary increased from $22.9 million in 2015 to $25.1 million in 2016.[356]
March 17, 2017: Phillips 66 Announces 130-mile Long Rodeo Pipeline in West Texas
Fuelfix reported on March 17, 2017 that Phillips 66 hopes to build a 130-mile Rodeo pipeline to the Midland area to transport oil from the surging Delaware Basin portion of the Permian that’s west of Midland to terminals in the Odessa-Midland area. The Reeves-Odessa Origination Project, nicknamed Rodeo, is slated for completion in the second half of 2018. Phillips 66 is not revealing project costs. The pipeline initially would transport 130,000 barrels of crude daily and eventually ramp up to 450,000 barrels a day. The pipeline would be 130 miles long, but that’s not counting various laterals built off of the mainline.[357]
March 13, 2017: San Luis Obispo County Board of Supervisors Chambers Packed for Phillips 66 Santa Maria Refinery Rail Spur Appeal Hearing
The Santa Maria Times reported on March 13, 2017 that the San Luis Obispo County Board of Supervisors chambers were filled with 160 opponents of a controversial proposal by Phillips 66 to bring crude oil to its Santa Maria Refinery via trains. Half of those spoke during the daylong meeting and most speakers voiced opposition to the plans. "This is the first time in 15 years we have ever spoken outside Santa Barbara County," said Ken Hough, Santa Barbara County Action Network executive director. "We never had the need to ... until now." Hough told the supervisors that his organization stands with Santa Barbara County in its opposition to the proposed rail spur project. Oil train opponents gathered at noontime outside the courthouse across the street from the government center for a "SLO Clean Energy Crossroads Rally," which featured a human train and chants of, "Hey, Phillips, what do we know?" "No, trains in S-L-O."
Phillips 66 has argued the rail spur is necessary for the company to support plant operations because it doesn't own local crude oil production fields and must transport crude to the facility. Crude oil now is piped to the Phillips 66 facility that's located on the Nipomo Mesa, as well as trucked in to the plant. "I'm here to tell about a project that's crucial to the viability of the refinery," said Jim Anderson, Phillips 66 maintenance superintendent, noting that since the shutdown of the Plains All American pipeline, which spilled near Refugio State Beach in 2015, production at the refinery has been reduced by 50 percent.[358]
People from the Central Coast as well as from Northern California protested, some carrying signs that said “No Way in San Jose” and “Stop Oil Trains.” U.S. Rep. Salud Carbajal, San Luis Obispo Mayor Heidi Harmon, Northern Chumash Tribal Council spokesman Fred Collins and Northern Chumash Tribal Council member Violet Cavanaugh were among the speakers. Afterward, protesters marched from the County Government Center through downtown, led by a symbolic train formed by members of 350 Silicon Valley, a San Jose-based climate change group. “We came to speak out against the oil trains. It also affects us,” said Justin Massey, who traveled to San Luis Obispo with the Sacramento Climate Coalition. “It’s an immense risk for a very shortsighted profit for Phillips 66.”[359]
March 13, 2017: Phillips 66 Hires Carmichael Lynch to Handle Creative, Brand Strategy, Media Planning and Buying, Analytics, Digital and Cause Marketing
Adweek reported on March 13, 2017 that Phillips 66 has named Carmichael Lynch as its new agency of record to handle creative, brand strategy, media planning and buying, analytics, digital and cause marketing for the client’s Phillips 66, 76 and Conoco fuel brands. “Carmichael Lynch came to the table with an understanding of our business needs, our values and our company culture,” said Phillips 66 senior director of brands Sarah Bolding in a statement. “Their integrated resources produced an outstanding creative product and 360-degree plan.” According to Kantar Media, Phillips 66 spent approximately $8 million on measured media in 2015 and $6 million from January to November of 2016.[360]
March 10, 2017: Thousands March in Washington DC to Protest Phillips 66 Funded Dakota Access Pipeline
Mother Jones reported on March 10, 2017 that thousands of indigenous nations and environmental activists descended on Washington, D.C. for what they called the Native Nations Rise march and rally. The 1.5 mile march from the US Army Corps of Engineers headquarters to the White House was the culmination of a week-long event that included cultural workshops and panels. Protesters wore traditional garb and danced, while speakers in the adjacent park rallied the audience by leading marchers in "We stand with Standing Rock" chants. The crowd of approximately 2,000 at Native Nations Rise was diverse and in high spirits despite the blustering wind and intermittent rain. Rachel, 19-years-old, drove to the rally from Columbus, Ohio. "Fast-tracking the pipeline was the final nail in the coffin for me," she says. Cody, who is 21 and drove east with Rachel, is still a Bernie Sanders supporter because "he was the only one who came out," in solidarity with the Standing Rock Sioux tribe. Signs declaring, "Water is Life" and "People Over Pipelines" peppered the crowd. It is unclear what will happen next and if the tribes have any more legal avenues to stop the construction of the Dakota Access Pipeline. As indigenous people sang tribal songs and chanted in their languages in front of the Trump White House, one visual message was clear: In the middle of the park where demonstrators gathered was a large, red, "Make America Great Again" hat—with an arrow through the middle.[361][362]
March 10, 2017: Judge Rules Against Phillips 66's Legal Appeal over Planning Commission’s Decision to Reject Santa Maria Refinery Rail Spur Project
Cal Coast News reported on March 10, 2017 that San Luis Obispo Judge Barry LaBarbera ruled against a legal appeal filed by Phillips 66 over the SLO County Planning Commission’s decision to reject the oil company’s Nipomo rail spur project paving the way for board of supervisors hearings on the project to begin next week. Phillips 66 sought to obtain a court order sending the case back to the planning commission on the grounds that the commission misapplied land use rules in designating an area to be an environmentally sensitive habit area (ESHA), and thus rending the location undevelopable. The planning commission made the designation after the rail spur project was already accepted, violating a land use ordinance deadline and wasting the company’s time and money, Phillips 66’s attorneys argued.
The judge sided with Phillips 66 on one point. The oil company had argued that the ordinance the planning commission used to reject the project was unconstitutional because it is vague. The California Constitution bars the county from ruling on that matter, LaBarbera said. According to LaBarbera’s ruling, Phillips 66 can file an amended complaint pertaining to the constitutionality issue alone. Special board of supervisors hearings on the Phillips 66 appeal are set to begin Monday and continue through the week.[363]
March 7, 2017: Judge Rules Against Native American Tribes Seeking to Stop Phillip 66 Funded Dakota Access Pipeline
NPR reported on March 7, 2017 that U.S. District Judge James Boasberg has denied a request by the Standing Rock Sioux and Cheyenne River tribes to halt construction of the final piece of the Dakota Access Pipeline. Explaining he believed the tribes were unlikely to prevail in their lawsuit at this point, Boasberg denied their request to halt construction on the pipeline, or stop oil from flowing through it once it is complete. The pipeline company, Energy Transfer Partners, has been drilling under Lake Oahe for weeks, and said oil could start flowing through that section of the pipeline as early as next week.
In a statement after the decision was announced, Chase Iron Eyes, the lead counsel for the Lakota People's Law Project, which is supporting the legal challenges to the pipeline, wrote "Oil should never be allowed to flow through this pipeline until the legal process has played out in the courts."[364]
March 2, 2017: Brazoria County Commissioners Approve 10-year, 100 percent Property Tax Abatement for Proposed $1.3 billion Complex at Phillips 66 Sweeny Site
The Brazosport Facts reported on March 2, 2017 that Brazoria County commissioners unanimously approved a 10-year, 100 percent property tax abatement if a proposed $1.3 billion complex is placed at the Phillips 66 Sweeny site. The natural liquid gas fractionator will divide natural gas liquids into marketable purity products. Officials have begun preliminary economic and engineering analyses for at least one fractionation and associated pipelines to meet a growing domestic and international demand for natural gas liquids supplied by the United States, Phillips 66 spokesman Rich Johnson said in an emailed statement. Construction is projected to begin in February 2019 if the company selects the Brazoria County site, with a targeted completion date of April 2020, the application states. The project will create 1,300 jobs at peak construction, finishing with 300 construction jobs and 12 permanent jobs. “We’re really excited to be engaging in a project that’s going to be part of the community, employ people in the community, be an economic benefit to folks in the community in Brazoria County,” Phillips 66 Real Estate Services Senior Advisor Chris Cisneros said. “As other projects come along, we’re hoping to consider Brazoria County. We’re looking forward to potentially being right here in Brazoria County close to our refinery and close to people we know and people we care about.”[365]
February 24, 2017: Phillips 66 Billings Refinery Makes $20,000 Grant to Billings Public Library Foundation
The Billings Gazette reported on February 24, 2017 that the Phillips 66 Billings Refinery made a $20,000 grant to the Billings Public Library Foundation to purchase enough technology to fill six community crates that will each hold up to 60 educational activities for students of all ages. Teen librarian Cody Allen that each crate is packed with gadgets around a theme like astronomy, computer coding, robotics, engineering, science, and audio-visual, including movie-making. The astronomy tote, for example, contains a telescope, along with an electronic tablet so that several students at once can see the celestial body that the telescope is pointed at. Beginning this summer, teachers and others, including the employees of agencies that serve children, will be trained on using the crates. After that, the totes will be available for checkout. Parents of home-schooled students can also receive the training and check out the totes.[366]
February 23, 2017: Phillips 66 Funded Dakota Access Pipeline is 99 Percent Complete
Reuters reported on February 23, 2017 that according to Energy Transfer Partners 99 percent of its controversial Dakota Access Pipeline, funded in part by Phillips 66, is complete after receiving all federal authorizations necessary earlier this month. The crude pipeline will begin or continue line fill in late March or early April, according to executives on its fourth-quarter earnings call. It will then begin "demand charges" on subscribed volumes by June 1. The company added that it had not yet launched its next open season for additional shippers, but expects to do so in the next 30 to 60 days. It said it remains in dialogue with potential shippers currently.[367]
February 22, 2017: Victim of Hydrofluoric Acid Leak at Phillips 66 Ferndale Refinery Released from Hospital
The Bellingham Herald reported on February 22, 2017 that the Phillips 66 contractor who was hospitalized after a hydrofluoric acid leak at Phillips 66's Ferndale Refinery earlier this month has been released, Dennis Nuss, a company spokesman, said in an email. Six other workers – five contractors and a Phillips employee – were also taken to St. Joseph Hospital after hydrofluoric acid was released at the refinery and were released hours after being admitted. Phillips 66 has not released the man’s name or the nature of his injuries. The cause of the leak remains under investigation, Nuss said.[368]
- Learn more about the Hydrofluoric Acid Leak at Phillips 66 Ferndale Refinery
February 17, 2017: Remains of Missing Worker Recovered After Phillip 66 Pipeline Explosion
The Times-Picayune reported on February 17, 2017 that the remains of pipeline worker Josh Helms, who had been missing since the February 9 explosion at a Philips 66 pipeline in Paradis, have been recovered, according to Louisiana State Police Troop B spokeswoman Melissa Matey. Six workers, including Helms, were cleaning the pipeline when the fire erupted around 7 p.m. February 9. Two were taken to the hospital with injuries, including a contract worker who was later flown to a burn unit in Baton Rouge, according to St. Charles Parish Sheriff Greg Champagne said. The other worker was released from the hospital. "The Phillips 66 family is saddened by the loss of our colleague, Josh Helms," the company wrote on its Facebook page. "We extend our deepest sympathies to his family and friends."[369]
February 17, 2017: San Jose Residents Rally To Derail Plan That Would Send Phillips 66 Oil Tankers Through Their City to Phillips' Santa Maria Refinery
The Mercury News reported on February 17, 2017 that San Jose residents and local activists have organized a march Sunday and community meeting Thursday to remind the public that the fight to prevent flammable crude oil from being hauled on rail through Willow Glen and other neighborhoods up and down the state isn’t over. Although the San Luis Obispo County Planning Commission last year denied Phillips 66’s request to expand its refinery in Santa Maria, the company appealed the decision to that county’s board of supervisors, which is expected to review the proposal next month. If the board approves the refinery expansion, Phillips 66 plans to send 80 tank cars carrying about 2.2 million total gallons of Bakken crude oil from Canada or North Dakota roughly 2,500 miles to the refinery, cutting through Diridon Station and northern Willow Glen along the way. “A lot of people in San Jose think this project is over with because the planning department in San Luis Obispo rejected it,” said Stew Plock, a member of 350 Silicon Valley. “The problem is the oil company can appeal it, which is what they’ve done. That’s why we’re trying to reawaken people to the fact that this is not over yet.”
District 6 Councilwoman Devora “Dev” Davis, who grew up in North Dakota where much of the crude oil would come from, is no stranger to the controversial project. A number of derailments and other disasters related to oil trains have been documented in her native state over the past several years, which is why she doesn’t want them coming through her district. “Running oil trains through residential areas is dangerous, and I am opposed to it,” Davis said in a statement. “Oil trains in other parts of the country have caused tragic disasters over the last few years. We must avoid the danger through our densely populated city.”
Representatives from Phillips 66 declined to comment.[370]
The Mercury News reported on February 22, 2017 that climate change group 350 Silicon Valley and several hundred Willow Glen residents had planned to march along Lincoln Avenue in downtown Willow Glen on February 19, 2017 until the torrential rainfall interfered.[371]
February 16, 2017: Fluid Catalytic Cracker at Ponca Refinery Rumored to be Shut
Platts reported on February 16, 2017 that West Texas Intermediate light sweet crude oil at Midland, Texas, fell Thursday by its largest amount since mid-December on market talk of reduced rates and/or unit outages at two regional refineries and a pipeline. March-delivered WTI at Midland ended the day at March cash WTI plus 10 cents/b, down 45 cents/b from Wednesday and the largest single-day decline since December 20, 2016. The decline came following several unrelated issues, each of which has the potential to cause an increase in supply in crude in the region. The fluid catalytic cracker was said to be shut at Phillips 66's 200,000 b/d Ponca City, Oklahoma, refinery. "Phillips 66 saying no impact to crude runs so I think this is a buy the rumor, sell the fact type of situation," a second US crude trader said Thursday. The trader did not clarify if he spoke with Phillips 66 or if that was hearsay.[372]
February 13, 2017: Dead Phillips 66 Contractor Has Been Identified, Pipeline Fire Extinguished After Three Days
Fox 8 reported on February 13, 2017 that the fire at a Phillips 66 pipeline in Paradis is out, according to St. Charles Parish officials. As of 7:15 a.m. Monday the fire is out but crews are still purging the line to make sure the area is "gas safe." Tristan Babin, Public Information Officer for St. Charles Parish said the purging will take a few hours. No one has been up close to the pipe as of now. Over the weekend, the worker who died in the accident was identified as Josh Helms of Thibodaux. The dousing of the fire was expected to allow the St. Charles Parish Coroner's Office to begin its investigation into Helms' death, officials said. A message left with the Coroner's Office was not returned.[373][374]
February 13, 2017: Federal Judge Rejects Request to Block Phillips 66 Funded Dakota Access Pipeline
The Washington Post reported on February 13, 2017 that U.S. District Judge James E. Boasberg turned down a request to temporarily block construction on the Dakota Access pipeline, saying there would not be any risk of immediate harm until oil starts flowing. Boasberg denied a request by two Native American Lakota tribes for a temporary restraining order, ordered the pipeline company to provide weekly updates about when it expected oil to begin flowing, leaving open the possibility of further court intervention. He set a date of Feb. 27 for a hearing on whether to issue a preliminary injunction at that time. “Because there is no immediate harm because oil is not going to flow immediately, I deny the” temporary restraining order, Boasberg said from the bench after an hour-long hearing. The case is an early test of the power of President Trump’s executive orders. The president has been trying to speed up the pipeline’s completion, while the tribes and environmental groups have argued that the administration’s actions violate administrative procedure and treaty obligations. Jan Hasselman, an attorney for the environmental group Earthjustice and an adviser to the Standing Rock Sioux Tribe, said the tribes expect to file a new, broader motion in the next couple of day seeking partial summary judgment under the National Environmental Policy Act, Clean Water Act and Administrative Process Act. The motion Boasberg rejected Monday was based solely on religious freedom grounds, with the Standing Rock Sioux and the Cheyenne River Sioux arguing that the Missouri River and Lake Oahe are integral parts of their sacred rights and beliefs. The pipeline, they said, would “desecrate the Tribe’s sacred waters” and pose “plain irreparable harm.”
“We’re disappointed with today’s ruling denying a temporary restraining order against the Dakota Access pipeline, but we are not surprised. We know this fight is far from over,” said Chase Iron Eyes, a member of the Standing Rock Sioux tribe and lead counsel in a group defending Lakota rights. Iron Eyes said the tribes would continue to pursue legal remedies and push for the completion of a full environmental impact statement. “It tells you they’re overlooking our role as a tribal government, as a sovereign nation,” said Frank White Bull, a member of the Standing Rock Sioux Tribal Council. “Of course it’s disappointing, but it is not the end of the fight. Our fight is perpetual as long as the Lakota people are in existence.”[375]
February 12, 2017: Missing Worker Believed Dead in Phillips 66 Pipeline Blast in Louisiana
Reuters reported that Josh Helms, of Thibodaux, Louisiana, missing since a Thursday night explosion at a Phillips 66 natural gas liquids pipeline station in Louisiana is believed dead, the company said. The body of the missing worker is thought to be near the site of the fire, which continued to burn on Saturday, Phillips 66 said in a statement. The blaze, though reduced in size, still prevented searchers from reaching the site on Saturday. Helms joined Phillips 66 when the company acquired the River Parish pipeline system in November. Helms has worked on pipelines for eight years.[376]
February 12, 2017: One Worker Remains Hospitalized After HydroFluoric Acid Leak at Phillips 66 Ferndale Refinery
Reuters reported that one contract worker remained hospitalized on Saturday after a hydrofluoric acid leak at Phillips 66's Ferndale, Washington, refinery on Friday, the company said in a statement. The leak was from the refinery's alkylation unit according to a report on the Bellingham Herald newspaper website. Alkylation units are considered the most dangerous in a refinery because a release of hydrofluoric acid from an explosion or fire could spread a possibly lethal vapor cloud across surrounding communities.[377]
Dangers of Hydrofluoric Acid
According to a report from the Center for Public Integrity, Hydrofluoric acid, known for its ability to race long distances in a cloud, is extremely toxic. It causes lung congestion, inflammation and severe burns of the skin and digestive tract. It attacks the eyes and bones. Experiments in 1986 detected the acid at potentially deadly levels almost two miles from the point of release. Despite decades-old warnings that the compound, commonly called HF, could cause mass casualties — and despite the availability of a safer alternative — 50 of the nation’s 148 refineries continue to rely on it. At least 16 million Americans, many of them unaware of the threat, live in the potential path of HF if it were to be released in an accident or a terrorist attack, a joint investigation by the Center for Public Integrity and ABC News has found. The government maintains closely controlled reports outlining worst-case scenarios involving highly hazardous chemicals. The Center reviewed reports for the 50 refineries that use HF. The reports describe the most extreme accidents anticipated by the plants’ owners. The information is not published and is not easily accessible by the public.
According to a report from the Center for Public Integrity, the refining industry plays down the risks of Hydrofluoric acid, saying it has adequate safeguards in place and the chances of a catastrophic accident at any one location are slim. “There hasn’t been any HF release that has impacted the communities,” said Charles Drevna, president of the National Petrochemical & Refiners Association. “We’ve controlled them.” The industry should take the threat more seriously, said Paul Orum, a chemical safety consultant who works with public-interest groups. “These are low-probability, high-consequence events, which is why any individual company is not, by itself, motivated to make potentially expensive changes to a safer technology,” Orum said. Refiners use HF as a catalyst to make high-octane gasoline. A few companies, under pressure from advocacy groups and regulators, have switched to a modified form of the acid, which still poses significant risks to workers and communities but is less likely to travel as far. No refinery owner has embraced a product known as solid acid catalyst, which union officials and chemical safety experts say is far safer than HF. The industry says that making a switch would prove too complicated and expensive. The cost of shifting from HF to alternatives is somewhere between $50 million and $150 million per refinery.[378]
- Learn More about the Dangers of Hydrofluoric Acid Used in Oil Refineries
Hydrofluoric Acid Used at Ponca City Refinery
According to a report by KOCO News in 2011, the Phillips 66 refinery in Ponca City is one of three refineries in Oklahoma that use Hydrofluoric acid. The other Oklahoma refineries that use Hydrofluoric acid are the Valero Refinery in Ardmore and the Gary Williams Corporation Refinery in Wynnewood.[379] According to a memorandum from the Oklahoma Department of Environmental Quality Air Quality Division dated June 8, 2010, the HF Alkylation Unit (Alky) at Ponca City Refinery uses hydrofluoric (HF) acid as a catalyst to promote the reaction of olefin with isobutane to form high-octane gasoline blending components. The olefin feed stream to the unit is produced in the fluid catalytic cracking and delayed coking processes. As mentioned in the No. 5 FCCU process description, the olefin feed is split into a propane-propylene stream (PP) and a butane-butylene stream (BB). The BB stream is treated for H2S removal in the Alky Unit BB Merox Treater prior to feeding the SHP (Selective Hydrogenation Process) unit to remove butadiene and isomerize 1-butene. On the way to the Alky, the PP stream can be processed through the Catalytic Polymerization Unit. Isobutane makeup feed is either produced in the Butamer Unit or purchased from outside the Refinery.[380]
- Learn More about the Hydrofluoric acid Alkylation Unit (Alky) at Ponca City Refinery
Hydrofluric Acid Unit Injured Three Workers at Phillips 66's Borger Refinery in 2014
Channel 7 Amarillo reported on March 18, 2014 that two Phillips employees and a contractor were injured in an accident at Borger refinery that took place at about 5 pm on March 18, 2014. The injured were taken to Golden Plains Community Hospital to receive medical treatment and the condition of the individuals is not life threatening. One employee is at Golden Plains Community Hospital, the second has been transported to the Lubbock Burn Center, and the contract worker is under observation at Golden Plains Community Hospital. Scanner traffic indicated the injured had been exposed to hydrogen sulfide. Phillips is investigating the incident.[381]
According to the Borger News-Herald the incident occurred during turnaround at the unit that handles hydrofluric (HF) acid. The hydrofluric acid unit was shut down at the time the accident occurred. Phillips did not confirm the exact nature of the incident. Phillips is investigating the cause and implications of the incident and details are still being clarified as the influx of turnaround workers has increased traffic inside the plant. "We want to figure out exactly what happened," said Dennis Nuss, a Senior Advisor for Phillips 66 who works with Project Communications. "We want to make sure that something similar will not happen again." When asked if the incident was due to either a chemical exposure or a fire, Nuss said, "There was no fire." The Borger News-Herald is reaching out to contract companies and contractors for more information and will update the story as more information is released.[382]
February 11, 2017: Phillips 66 Pipeline Worker Still Missing As Fire Continues to Blaze in Paradis
The Advocate reported on February 11, 2017 that one worker is missing and another recuperating in a hospital burn unit as a Phillips 66 natural gas pipeline in St. Charles Parish was still ablaze almost a full day later. Officials and plant workers could do little Friday but seal off the section of pipe that caught fire and wait for the gas inside to burn off. Authorities warned it could be hours or days more before the flames were entirely extinguished, although the fire had shrunk considerably by early evening. Todd Denton, general manager of midstream operations for Phillips 66, the company that owns the pipeline, said Friday it was the most serious industrial accident of his career. “I can’t express strongly enough the concern I have and that the Phillips 66 family has for those impacted,” he said. The missing worker and those who were injured have yet to be identified by company officials. One worker received treatment at a nearby hospital and was released, while another was listed in fair condition after being airlifted to the regional burn unit at Baton Rouge General Hospital.
The fire began in a fenced-off, 800-square-foot area around which six workers — three employed by Phillips 66 and three by Blanchard Contractors — were trying to clean out a section of the pipeline, officials said. Oil and gas companies routinely send pieces of equipment called “pigs” down the line to clear debris from the inside of a pipe. To launch a pig, crews typically burn off the fuel in the pipe, then seal off the section so it can be depressurized. Then they load the pig, seal the pipe back up and open the valve, allowing the liquefied natural gas to push the equipment through. “We were receiving that pig,” Denton said. “We don’t know what happened after that.” Between depressurizing and pressurizing the pipeline and burning off gas, running the equipment can be dangerous, experts said, especially if all the gas doesn’t burn off or if there’s a leak in the line or some other problem.
Environmental groups seized on the fire as an example of the dangers posed by pipelines carrying fossil fuels. Those groups hope to halt the construction of another line, the Bayou Bridge Pipeline, in which Phillips 66 is a partner. Conservationists are planning to rally outside the state Department of Environmental Quality at 10:30 a.m. Monday to keep up the opposition. “As the Phillips 66 pipeline fire continues to burn, can we really trust their assurances that another pipeline would be safe?” Cyn Sarthou, executive director of the Gulf Restoration Network, asked in a statement. “Clearly, if the Bayou Bridge pipeline is built, it will place our communities and our workers at risk.” Regulators argued that the comparison doesn’t hold water. The Venice-Paradis line that caught fire Thursday transports liquid natural gas, while Bayou Bridge would carry crude oil. "In terms of the regulatory community, (the fire) doesn't have any bearing on” the Bayou Bridge debate, said DEQ spokesman Greg Langley.[383]
February 11, 2017: Hydroflouric Acid Leak at Phillips 66 Ferndale Refinery Injures Seven Workers
Reuters reported on February 11, 2017 that seven contract workers were taken to St. Joseph hospital after a toxic hydrofluoric acid leak at Phillips 66's Ferndale Refinery. The leak was from the refinery's alkylation unit, the Bellingham Herald said, citing a company statement. Alkylation units use hydrofluoric acid to convert refining byproducts into octane-boosting components of gasoline.[384] The gas leak occurred about 5 p.m. in the refinery at 3901 Unick Road. “Our internal response team immediately activated the emergency response plan and the leak was contained within the property,” Phillips 66 stated. “There was no threat to the public, to anybody in the area,” said Assistant Chief Larry Hoffman of Whatcom County Fire District 7, which serves the Ferndale area. Other workers “sheltered in place as a precaution,” Phillips 66 said. There also was a report of a precautionary evacuation. A horn was blown at 6:13 p.m., signaling the all-clear for people to resume normal work activity.[385]
February 10, 2017: Sixty Homes Evacuated, Two Workers Taken to Hospital, One Worker Missing in Phillips 66 Pipeline Fire in Paradis Louisiana
Reuters reported on February 10, 2017 that sixty homes in Paradis, Louisiana were evacuated, two workers were taken to a local hospital, and another is unaccounted for after an explosion and fire at a Phillips 66 pipeline station. Two of the workers were hospitalized — one taken to a burn center— and three had minor or no injuries, the sheriff said. The remaining worker was unaccounted for, and a helicopter was being brought in to help search for him. Workers are now attempting to shut a high pressure line, a spokesman for the parish said. "It's a very high pressure, high intensity fire," Champagne said. "When you get close to it, it is really singeing." The source of the product in the pipeline has been shut off, but the fire could burn for hours or at least a day, Champagne said. "It is a loud and scary fire, but it is burning off." "Phillips 66 is in the process of accounting for all employees and contractors who were working at the site at the time," the spokesman said.[386]
Champagne said the source of the 20-inch pipeline had been shut off but the fire would have to burn off the rest of the liquid inside, which could take hours or even days. “They tell us the best thing that can happen right now is for the product to burn off,” he said. The pipeline was carrying a highly volatile byproduct of natural gas, which was burning cleanly and very hotly over a 30- to 40-foot area, the sheriff said. “It’s just a big blow torch,” he said.[387]
Officials evacuated 60 homes within a couple of miles of the pipeline as officials let the fire burn off. That could take anywhere from a few hours to a few days, the sheriff said. The evacuation perimeter, which remained in effect as of 8 a.m. Friday, is Louisiana Highway 635 to 306 Bayou Gauche Road. Those evacuated from the east side of Highway 635 were allowed to return home late Thursday. The west side of Highway 635 remains under an evacuation order. The Edward A. Dufresne Community Center at 274 Judge Edward Parkway in Luling is being used as a shelter for evacuees. Paradis is about 30 minutes west of New Orleans.[388]
February 9, 2017: Construction Resumes on Phillips 66 Funded Dakota Access Pipeline After Government Grants Final Easement
The LA Times reported on February 9, 2017 that despite months of protests led by tribal groups and an expanded environmental review ordered in the final days of the Obama administration, construction on the Dakota Access oil pipeline, funded in part by Phillips 66, resumed less than 24 hours after the government granted a final easement allowing for completion of the disputed project. Energy Transfer Partners said that it had “received all federal authorizations necessary to proceed expeditiously to complete construction of the pipeline.” The company, based in Texas, said it expects to have in hand $2.6 billion in loans for the project “within the next several days” and for the pipeline to be operational no later than June.
The Standing Rock Sioux Tribe, which has led protests against the pipeline, has said it will continue to oppose its completion in court and, if necessary, fight the operation of the pipeline if it is completed. The nearby Cheyenne River Sioux tribe, which has joined the Standing Rock Sioux in legal battles, filed a request in federal court in Washington on Thursday for a restraining order to stop construction. The Standing Rock Sioux have encouraged people who have been protesting the pipeline near its reservation for months to leave and focus instead on political and legal efforts across the country. Those efforts include divestment. On Tuesday, Seattle became the first city in the nation to end its relationship with a bank in protest of the pipeline. The Seattle City Council voted unanimously to sever ties with Wells Fargo, which manages about $3 billion for the city annually.[389]
February 9. 2017: Environmental Lawsuit Against Phillips 66 Borger Refinery Benefits Students
News Channel 10 reported on February 9, 2017 that after Phillips 66 Borger refinery failed to meet environmental requirements, they were fined by the Texas Commission on Environmental Quality (TCEQ) and proceeds from the lawsuit are benefiting students in the Borger School District. Any time environmental lawsuits like this are settled, a portion of the financial penalty is paid to a Supplemental Environmental Project. Phillips 66 was penalized $13,688 for failing to meet environmental air standards. Approximately 40 percent of the penalty was paid to a SEP which, in this case, is Borger Independent School District (ISD). These funds will help pay for new school buses with reduced fuel emissions. "We have an older fleet of buses, so it's nice to add a newer bus to our fleet, especially if it has better emissions," said Rebecca Calder the communication coordinator for Borger ISD.[390]
February 8, 2017: Phillips 66 Warns of Employment Scam at Humber Refinery
The Grimsby Telegraph reported that Phillips 66 Humber Refinery is warning about a job offer scam it has been embroiled in. Would-be employees have been asked in a phishing email to provide application fees in the scam. In a statement, the company said: "These fraudulent communications have been sent to individuals through various channels and are typically distributed via email, social media or by phone solicitation in which individuals are encouraged to provide personal or financial information." Phillips 66 enjoys phenomenal responses to recruitment campaigns, often done in conjunction with the Grimsby Telegraph. The company's name and logo has been used in the elaborate phishing hoax, which looks to capitalise on the fact Phillips 66 is seen as a top employer. "Email communications from our company will never request sensitive financial or personal information such as social security number, passport information, date of birth, credit card numbers, banking information, etc."[391]
February 3, 2017: Why Phillips 66 Earnings Were Such a Disappointment This Quarter
Jordan Blum wrote at Fuel Fix that Phillips 66 saw its quarterly profit fall 75 percent from 2015 to close out a “disappointing” quarter with $163 million quarterly profit compared to $650 million in earnings at the end of 2015 and $1.56 billion profit for the year versus $4.23 billion in 2015. U.S. refiners struggled in 2016 with low or non-existent profit margins on fuel products as oil prices grew and low gasoline prices lagged behind. On a positive note, the fourth quarter saw Phillips 66 bring its new liquefied petroleum gas export terminal in Freeport online that allows the company to ship propane and butane worldwide. The company also touted major projects coming online this year, such as Chevron Phillips’ massive petrochemical expansion being finished later this year in Baytown and Old Ocean. In December, Phillips 66 said it will cut its capital spending by 25 percent this year, taking a conservative approach as the energy sector pulls out of the two-year oil bust.[392]
Matthew DiLallo wrote at Fox Business that Phillips 66 faced a tough operating environment in 2016 as rising costs, and other issues, squeezed margins but those problems grow worse during the fourth quarter, as a range of items across several of the company's other business segments caused its earnings to deteriorate even further. According to DiLallo, Phillips 66's refining segment turned in an atrocious quarter, reporting an adjusted loss of $95 million. "One of the reasons Phillips 66's refining segment dropped into the red was because it also had a major refinery turnaround during the quarter, which resulted in its utilization rate falling to 93%, causing volumes to slip. Add in some other company-specific pricing issues for volumes shipped on certain pipelines, and it seemed like everything that could go wrong during the quarter did."
Phillips' DCP Midstream joint venture seemed to be turning things around thanks to rising commodity prices. Unfortunately, that growth did not materialize during the quarter. Instead, adjusted earnings fell from $75 million last quarter to $33 million in the fourth quarter. Several of Phillips 66's other midstream businesses performed poorly during the quarter. Earnings in its transportation segment declined 14% to $69 million while NGL earnings slumped more than 50%, primarily due to start-up costs at its LPG export terminal.
DiLallo says that the final flaw for the quarter was the unexpectedly deep decline in earnings at Phillips 66's other two business segments: Chemicals and marketing and specialties. Phillips 66's chemicals joint venture with Chevron reported a 35% drop in adjusted earnings, which fell to $124 million due primarily to lower margins and turnaround activities while adjusted earnings in the marketing and specialties segment plunged 47.6% over the prior quarter to $140 million.
The investor takeaway is that broad themes drove the earnings underperformance across Phillips 66's segment results in this quarter. "First, the company faced higher input costs from rising oil prices, which squeezed margins across all its segments. On top of that, the company experienced several one-time issues associated with asset turnarounds, which impacted volumes. When combined, these formed a one-two punch that knocked down earnings rather quickly. Unfortunately, these problems are par for the course for energy manufacturing companies like Phillips 66."[393]
February 3, 2017: Garland Says Dakota Access Pipeline Will Start Operations in the Second Quarter
Reuters reported on February 3, 2017 that Phillips 66 CEO Greg Garland said he expects the Dakota Access Pipeline to start operations in the second quarter, even though the project - which has sparked protests by Native Americans and environmentalists - is still in the midst of legal battles and a U.S. regulatory review. "Commercial operations are expected to begin in the second quarter of 2017, pending the issuance of an easement from the U.S. Army Corps of Engineers to complete work beneath the Missouri River on DAPL," Phillips 66 said in its earnings news release. On February 1, 2017, the U.S. Army said it had taken initial steps to "expeditiously review requests for approvals to construct and operate" the pipeline per an order issued by President Donald Trump, but the project's easement has not yet been approved. It is unclear whether the second-quarter timeline would be met unless the easement is granted soon. The comment period ends on Feb. 20, and even if the easement were granted immediately after, ETP has estimated a 90-to-120-day drilling period.[394]
February 3, 2017: Garland Says Donald Trump's Proposed Border Tax Could Spike Fuel Costs by 40 Cents a Gallon
The Houston Chronicle reported on February 3, 2017 that Phillips 66 CEO Greg Garland said a proposed border tax on imports would cause gasoline prices for American drivers to skyrocket as much as 40 cents a gallon. The U.S. still imports large amounts of crude from Canada, Latin America, the Middle East and other parts of world, all of which would be subject to the border taxes floated by House Republicans and President Donald Trump. With refining profit margins already tight, companies would unload as much of the additional tax burden on consumers as possible, said Greg Garland, CEO of Phillips 66 of Houston. "It's going to get mostly passed through," Garland told analysts during an earnings call. Garland noted that the tax proposal has pros and cons for his company. It would mean higher taxes on refining, but also lower taxes on corporate profits and the company's petrochemical exports. The proposal also could cause oil prices to rise and boost profits for U.S. exploration and production companies.[395]
February 1, 2017: Phillips 66 Loses Court Battle Over Paid Leave
Pension & Benefits Daily reported on February 1, 2017 that the Washington State Court of Appeals has agreed with two Phillips 66 workers that the company’s failure to offer specifically designated sick leave didn’t strip them of protections offered by state law, which forces employers offering paid leave to extend that leave to workers caring for sick family members. The dispute centers on a Washington statute forcing employers that offer paid leave to make that leave available for workers who care for sick family members. Two union-represented Phillips 66 workers filed a lawsuit in 2015 claiming that the company made them choose between using vacation days or taking unpaid leave to care for sick family members. According to the workers, they should have been able to take paid leave through Phillips’ short-term disability insurance policy. Phillips argued that it didn’t have to open up short-term disability benefits for workers’ family care needs, because it allowed workers to take vacation days in the event of their own illness or that of a family member. The court disagreed. In its view, the vacation days offered to Phillips employees didn’t qualify as paid leave “for illness” under the terms of the Washington law. This meant that Phillips’ disability plan—the only clear avenue for employees to take sick leave—could be liable for providing paid family leave, the court said.[396]
January 31, 2017: Trump Administration Orders Army Corps of Engineers to Issue Final Permit for Phillips 66 Funded Dakota Access Pipeline
The Washington Post reported on January 31, 2017 that according to two North Dakota GOP lawmakers who support the project, the acting secretary of the Army has instructed the Army Corps of Engineers to provide the final permit needed to complete the Dakota Access pipeline, funded in part by Phillips 66. “This will enable the company to complete the project,” said Sen. John Hoeven, “which can and will be built with the necessary safety features to protect the Standing Rock Sioux Tribe and others downstream.”
A statement by the Standing Rock Sioux tribe, provided by its policy adviser Jodi Gillette Tuesday night, said that while a final easement had not yet been granted, tribal members planned to challenge any such action in court. “The Army Corps lacks statutory authority to simply stop the [Environmental Impact Statement] and issue the easement. The Corps must review the Presidential Memorandum, notify Congress, and actually grant the easement. We have not received formal notice that the EIS has been suspended or withdrawn. To abandon the EIS would amount to a wholly unexplained and arbitrary change based on the president’s personal views and, potentially, personal investments,” the statement added. “We stand ready to fight this battle against corporate interest superseding government procedure and the health and well-being of millions of Americans.”
Given the likely court challenge, it is unclear when work on the pipeline would restart. The tribal council has asked the few hundred protesters who remain on site to leave, in part because of harsh weather conditions. Last fall, hundreds of law enforcement officers from different states and counties confronted protesters with water cannon, tear gas and pepper spray. Arrests reached a peak of more than 140 protesters. On Sunday, according to Hoeven, another 20 additional Bureau of Indian Affairs law enforcement officers arrived at Standing Rock to help local authorities.[397]
January 30, 2017: Phillips 66 Plans To Remediate Former Oil Refinery near Duncan, Oklahoma
SWOK News reported on January 30, 2017 that Phililps 66 plans to remediate 446 acres near Duncan, Oklahoma where a refinery was formerly located south of Duncan on Refinery Road and old U.S. 81. The property was in use as a refinery from the 1920s to 1983 and had several different owners during that time period. Stephens County purchased the property in 2003. Phillips 66 signed the agreement for the remediation process in 2003, according to Jeremy Anthon, who made a Power Point presentation for Phillips 66 to Stephens County Commissioners.
One concern on the property is for Claridy Creek, which runs along the east side of the property, as well as two or three portions of the parcel that were used as landfills and impoundments, according to the Anthon. Due to the size of the property, there will be some areas where dig and haul will be implemented.[398]
January 28, 2017: An Unexpected Delay Emerges in Phillips 66 Funded Dakota Access Pipeline
NPR reported on January 28, 2017 that just as President Trump takes power promising to ramp up oil and gas production, a sudden resignation in the Federal Energy Regulatory Commission (FERC) threatens to delay projects like the Dakota Access Pipeline. Norman Bay, one of just three current members of the commission, said he would resign effective February 3, even though his term isn't up until next year. Bay's decision leaves FERC with just two members — not enough for the required quorum to make decisions. Some projects that have been through years of regulatory review and were nearing the finish line could now be in limbo for months.
It's unclear what impact the FERC delay might have on the Keystone and Dakota Access pipelines, which Mr. Trump aimed to green light through executive actions this past week. Even if the president chooses someone quickly, the process will likely take several months — the appointment requires Senate confirmation. Sen. Lisa Murkowski (R-Alaska), chair of the Senate Committee on Energy and Natural Resources, says she will make it a top priority. "After next week, FERC will need a full complement of commissioners as soon as possible so that it can tackle the important work on its busy docket," Murkowski said in a statement. "The senate's challenge will be to promptly consider, without undue delay, FERC nominations once they are received."[399]
The Washington Post reported on February 3, 2017 that although a least a half-dozen major pipeline projects totaling more than $10 billion hang in the balance as FERC seeks a third commissioner to allow the commission to resume normal operations, the turmoil at FERC would not affect the proposed Keystone XL and Dakota Access oil pipelines because FERC does not issue permits for oil pipelines. Without a quorum, pipeline approvals on projects including the $2 billion Nexus pipeline in Ohio and Michigan; the $1 billion PennEast pipeline in Pennsylvania and New Jersey; and the $450 million Northern Access pipeline in Pennsylvania and New York could be delayed by months or even a year if Democrats fight Trump’s nominations, said Jeff Tittel, director of the New Jersey chapter of the Sierra Club, adding that Trump’s appointment of a new acting chair precipitated the FERC crisis.[400]
January 24, 2017: Trump Gives New Life to Phillips 66 Funded Dakota Access Pipeline
The Washington Post reported on January 24, 2017 that President Trump signed executive orders clearing the way for the controversial Dakota Access Pipeline to move forward. Trump also signed an executive order to expedite environmental reviews of other infrastructure projects, lamenting the existing procedures “incredibly cumbersome, long, horrible permitting process.” Trump said that both pipeline projects would be subject to renegotiation but it remained unclear how Trump’s order would restart the pipeline projects or expedite environmental reviews.
As news of the move surfaced Tuesday morning, oil industry officials hailed it as overdue. “Making American energy great again starts with infrastructure projects like these that move resources safely and efficiently,” said Stephen Brown, vice president of federal government affairs at Tesoro Companies.
The Standing Rock Sioux tribe and other Native American groups have been protesting the project, which they say would imperil their water supplies and disturb sacred burial and archaeological sites. The Army Corp of Engineers called a halt to the project in December to consider alternative routes. “We all saw the incredible strength and courage of the water protectors at Standing Rock, and the people around the world who stood with them in solidarity,” said Greenpeace Executive Director Annie Leonard. “We’ll stand with them again if Trump tries to bring the Dakota Access Pipeline, or any other fossil fuel infrastructure project, back to life.”[401]
January 23, 2017: White House Press Secretary Strongly Suggests Trump Will Push Through Phillips 66 Funded Dakota Access Pipeline
Alternet reported on January 23, 2017 that White Press Secretary Sean Spicer heavily implied during a press conference on January 23, 2017 that President Trump would overturn the permit denial that is prohibiting the Dakota Access Pipeline, funded in part by Phillips 66, from being built through the Standing Rock Reservation in the Dakotas. "I'm not going to get in front of the President's executive actions," said Spicer, "but I will tell you that areas like the Dakota and Keystone pipeline are areas that we can increase jobs, increase economic growth, and tap into America's energy supply. That's something that he's been very clear about." Trump has previously stated that he supports the completion of the pipeline. In December, the U.S. Army Corps of Engineers announced that it would not grant the final permit needed for the controversial Dakota Access Pipeline to be completed and that it would conduct an environmental impact review before continuing any part of the process. According to Alternet, while the permit denial was always perceived as temporary, it was a major win for the Standing Rock Sioux tribe and the activists who supported its fight against the pipeline.[402]
January 23, 2017: Comment Period Extended for Construction of Phillips 66 Funded Bayou Bridge Pipeline Until February 13
KATC reported on January 23, 2017 that the The LDEQ, Office of Environmental Services, and USACE, CEMVN has extended the period to receive comments regarding a Water Quality Certification Application and Department of Army (DA) Permit Application prepared for Bayou Bridge Pipeline from January 16, 2017, to February 13, 2017.[403]
January 23, 2017: Phillips 66 to Buy Crude from U.S. Strategic Petroleum Reserve
Reuters reported on January 23, 2017 that Phillips 66 submitted a winning bid in an auction held earlier this month by the U.S. Department of Energy to buy crude from the U.S. Strategic Petroleum Reserve (SPR). The sale is part of a resolution to sell up to $375 million of crude in fiscal 2017 to fund operational improvements to the infrastructure that holds the reserves. The Department of Energy Strategic Petroleum Reserve plans to sell approximately 8 million barrels of sweet crude oil from the Big Hill, Bryan Mound, and West Hackberry SPR sites. Deliveries are anticipated to take place beginning in March, with the potential for early deliveries in February, the Department of Energy previously said.[404]
January 20, 2017: Employees Allege Phillips 66 Violated California Labor Codes
The Northern California Record reported on January 20, 2017 that three California residents, Kyndl Buzas, Raudel Covarrubias and Daniel Runions, allege that they were required to work 12-hour shifts, were never provided rest breaks and that Phillips failed to provide their employees accurate wage statements. The plaintiffs request a trial by jury and seek all unpaid wages, damages, statutory and civil penalties, restitution, enjoin the defendant, disgorgement, all legal fees plus interest and any other relief as the court deems just.[405]
January 18, 2017: Phillips 66 Funded Bayou Bridge Pipeline is Shaping Up to Be Another Dakota Access Pipeline
Nick Cunningham writes at Oil Price that Energy Transfer Partners has another potential controversy on its hands with the Bayou Bridge Pipeline that could turn into the sequel to the Keystone XL and Dakota Access sagas. Energy Transfer Partners, along with joint owners Phillips 66 Partners and Sunoco Logistics Partners L.P., are proposing the Bayou Bridge Pipeline (BBP), a 163-mile pipeline that will run from Lake Charles, Louisiana to a key oil hub just west of New Orleans in St. James Parish. The oil will end at a terminal owned by NuStar Energy L.P., from which the oil could reach any number of customers, such as refiners along the Gulf Coast or be sent abroad as exports.
"The problem with the Bayou Bridge Pipeline is that it runs across the Atchafalaya Basin, a national heritage area that also happens to be the world’s largest natural swamp. It is home to endangered wildlife and also has a successful crawfishing industry. The pipeline route through the world’s largest swamp will cross 600 acres of wetlands and 700 bodies of water, which provide drinking water to over 300,000 people. Because of this, there are signs that a popular resistance akin to the Dakota Access protests is starting to emerge. At a packed public hearing on January 12, a raucous crowd filled with pipeline critics from disparate backgrounds spoke out against the project. The crowd jeered and hissed at former Louisiana Senator Mary Landrieu, who testified in favor of the Bayou Bridge Pipeline. She now lobbies on behalf of Energy Transfer Partners.
According to Cunningham this may seem like a local story, but so did the Dakota Access Pipeline until mid-2016. Protests that delay construction have a tendency of blowing up the issue into a national flashpoint. "Protest can be dismissed as mere sideshows, but they can have a concrete impact. When financial analysts warn investors to steer clear of companies like Energy Transfer Partners because of the political risk, the public backlash to large infrastructure projects should be taken seriously," concludes Cunningham. "Even as the protests in the frozen prairie of North Dakota could be in their final act, the spotlight could shift more than 1,000 miles to the south to the swampy wetlands of the bayou."[406]
Both the Bayou Bridge Pipeline and Dakota Access Pipeline are funded in part by Phillips 66.
January 18, 2017: Federal Study on Phillips 66 Funded Dakota Access Pipeline to Move Forward
ABC News reported on January 18, 2017 that U.S. District Judge James Boasberg denied Texas-based Energy Transfer Partners' request to stop the Corps from proceeding until he rules on whether the company already has the necessary permission to lay pipe under Lake Oahe, the water source for the Standing Rock Sioux tribe. The Army published a notice Wednesday of its intent to prepare an environmental impact statement on the Lake Oahe crossing. ETP won't be able to lay pipe under the reservoir while the study is ongoing; it is currently blocked from doing so anyway. A study could take up to two years, but the study notice can be withdrawn if Boasberg were to eventually rule that ETP has permission for the crossing, Army attorneys said. The notice says public comments will be accepted until Feb. 20 on "potential issues, concerns and reasonable alternatives" that should be considered in a study.
The Standing Rock Sioux and its supporters believe the four-state pipeline threatens drinking water and cultural sites. The tribe issued a statement Wednesday saying the study is "yet another small victory on the path to justice."[407]
Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
January 17, 2017: Environmental Groups Gear Up for Second Hearing Against Phillips 66 Funded Bayou Bridge Pipeline
The Advocate reported on January 17, 2017 that Louisiana environmental groups are gearing up for round two in a battle against the proposed 163-mile Bayou Bridge Pipeline, funded in part by Phillips 66, that they say they fear will foul the state's wetlands and water. A public hearing last week in Baton Rouge for a required U.S. Army Corps of Engineers permit drew more than 400 people, but activists expect a bigger turnout on February 8, 2017, said Anne Rolfes, "because people are fired up." "... This opposition is really unprecedented."
The subject of next month's hearing is the state Department of Natural Resources permit needed for portions of the pipeline that would pass through state-designated Coastal Zones in St. James and Assumption parishes, said DNR Communications Director Patrick Courreges. DNR began reviewing the permit early last year and initially closed the public comment period in May, but Courreges said the agency decided to hold a public hearing based on the increasing amount of attention the project has received in recent months. "When this project was originally being looked at, there wasn't that much interest," he said. Rolfes said the pipeline company can expect continued protests to block the project, even if it receives the required approvals from regulators who she accused of generally doing "big oil's bidding." "They will not lay this pipeline," she vowed.[408]
January 17, 2017: Builders of Phillips 66 Funded Dakota Access Pipeline File Motion to Bar Environmental Study by US Corps of Engineers
Yahoo News reported on January 17, 2017 that Energy Transfer Partners, builders of the Dakota Access Pipeline funded in part by Phillips 66, has filed a motion to bar the U.S. Army Corps of Engineers from initiating an environmental study for its controversial Dakota Access pipeline crossing at Lake Oahe in North Dakota. ETP has requested that a U.S. District Court judge for the District of Columbia stop the Corps from initiating the environmental impact statement process until a ruling has been made on whether the company already has necessary approvals for the pipeline crossing. The Corps said it would publish a notice in the Federal Register on Wednesday stating its intent to prepare an environmental impact statement for the requested easement at Lake Oahe. The notice will invite interested parties to comment on potential issues and concerns, as well as alternatives to the proposed route, which should be considered in the study.[409]
January 16, 2017: Basinkeepers Release Policy Statement on Phillips 66 Funded Bayou Bridge Pipeline
The IND reported on January 16, 2017 that Atchafalaya Basinkeeper and the Louisiana Crawfish Producers Association-West released a policy statement Monday on the proposed Bayou Bridge Pipeline, funded in part by Phillips 66 that says in part that bfore granting any permits which will use an existing right-of-way (corridor), we ask the Corps of Engineers to:
1. Conduct a thorough analysis of all existing violations already on the proposed right-of-way.
2. Conduct an EIS to determine the effects that those violations, such as illegal dams and spoil banks, are having into the wetlands, including to navigation on waters of the U.S., fisheries, the ecology and aesthetics of the wetlands.
3. Conduct a study on the economic consequences that these violations are having on the fisheries, ecotourism and any other industry affected by them.
4. Put the right-of-way out of commission until it is brought back into compliance. Make violators accountable by mandating that they correct the problems which they created.
Before granting a permit to Bayou Bridge to build a new pipeline in the Atchafalaya Basin we want the Corps of Engineers to:
1. Review all existing pipeline permits by Energy Transfers and/or any of their subsidiaries. [(We know that Energy Transfer also owns Florida Gas, responsible for building the Florida pipeline across the Atchafalaya Basin, one of the most damaging pipelines ever built.)
2. Identify all lack of compliance issues related to those permits.
3. Make Energy Transfer bring those right-of-ways back into compliance, and fix all damages done to wetlands as a consequence of any and all violations.[410]
January 15, 2017: 400 Activists Protest Phillips 66 Funded Bayou Bridge Pipeline at Public Hearing
The Guardian reported on January 15, 2017 that Scott Eustis, a coastal wetland specialist with the Gulf Restoration Network, was surprised to be joined by more than 400 others when he attended a public hearing in Baton Rouge about the Bayou Bridge Pipeline, a pipeline extension partially funded by Phillips 66 that would run directly through the Atchafalaya Basin, the world’s largest natural swamp. “This is like 50 times the amount of people we have at most of these meetings,” said Eustis, adding that the proposed pipeline was “the biggest and baddest I’ve seen in my career”. The Bayou Bridge Pipeline, if approved, would carry 480,000 barrels of oil per day a final 162 miles across the state to refineries and ports, through eight watersheds and long stretches of fragile wetlands.
At the public hearing in Baton Rouge on Thursday, the first speaker, Cory Farber, project manager of the Bayou Bridge pipeline, said it was expected to create 2,500 temporary jobs. When Farber then said the project would produce 12 permanent jobs, the crowd laughed heartily. “Those who have airboat companies and equipment companies that specialize in putting in equipment, they’re not opposed to pipelines because of the short-term jobs,” said Jody Meche, president of the state Crawfish Producers’ Association, one of dozens who spoke at the hearing. “But once that pipe is in there, the jobs are gone.”
Debate was fierce. Pro-pipeline speakers – oil industry reps, state representatives, a retired Louisiana State University professor – pointed out that many pipelines already run through the Atchafalaya Basin and said pipelines were in general the safest way to transport oil – in the case of the Bayou Bridge pipeline, 280,000 barrels per day of crude to the Gulf coast region, with the potential for 480,000. Where most in attendance worried about potential oil spills and their effect on drinking water, Meche was more concerned with ways existing pipelines have, he said, “crippled” the fishing industry. “They excavated the trench that they put the pipe in and then [they didn’t clean up] and it leaves a dam behind that blocks the water flow,” he said on the microphone, “until there’s not enough oxygen in the water for the crawfish, the fish, or anything.”
Native Americans dotted the crowd, many of them fresh from Standing Rock. “The Native Americans in North Dakota get a lot of credit for showing people their power,” Eustis said. Lifelong Iberia Parish resident Andrea Kilchrist, 71, described the violence she had witnessed at Standing Rock: peaceful protesters battered with sonic grenades, tear gas, mace, and cannons. “If you think this company is not going to do the same thing here — it’s going to do the same thing here,” she warned the room. “I hate pain. I’m afraid of pain and broken bones,” she continued, her voice shaking. “But on that first day, if y’all give that permit, I will be sitting in front of a bulldozer.”
As activists see it, Louisiana residents are starting to really care about environmental issues and, more importantly, to make themselves heard. “A lot of times we don’t get this opportunity to speak up,” said Eustis, still admiring the surprisingly large crowd. “[These oil companies] want to just roll over us. “But after Katrina, and the BP spill, and the Baton Rouge flood last year – 100,000 people displaced from their homes because of climate change – I guess we’re finally just sick of this.”[411][412]
January 15, 2017: Phillips 66 Bayway Refinery Donates $30,000 for Nature Outpost
Tapinto reported on January 15, 2017 that Phillips 66 Bayway Refinery has donated $30,000 to fund an outdoor pavilion and associated activities at Phil Rizzuto Park that will serve as a headquarters for learning about ecology and the need to preserve nature in urban communities. "Phillips 66 is proud to sponsor projects that protect and enhance the environment and add benefits to our local communities," said Nancy Sadlon, manager, Phillips 66 Bayway Refinery Public Affairs. “The County of Union is proud to partner with Groundwork and Phillips 66 to promote environmental education in one of the state’s most populated regions,” said Freeholder Chairman Bruce H. Bergen.[413]
January 13, 2017: Phillips 66 Pays Multi-Million Dollar Settlement for Alleged "Double-Dipping" into Oklahoma's Petroleum Storage Tank Cleanup Fund
NewsOK reported on January 13, 2017 that the state of Oklahoma received $2.8 million and an outside law firm working on contingency for Oklahoma Attorney General Scott Pruitt received $942,000 from a little-publicized settlement with Philips 66 over alleged "double-dipping" into a petroleum storage tank cleanup fund. Pruitt's lawsuit alleged Phillips 66 had collected money from the indemnity fund even after it used private insurance proceeds for the environmental remediation. Pruitt, who typically issues news releases touting legal victories, didn't publicize the settlement award or issue a news release. The only public mention of it came in meeting minutes at the Oklahoma Corporation Commission. The settlement agreement doesn't specify how much of the award went to the outside law firm, only that "the Oklahoma attorney general shall be responsible for paying any attorney fees." The Phillips 66 case and others like it have been touted by Pruitt supporters as an example of the attorney general being willing to go after energy companies. Related lawsuits against BP and Chevron over indemnity fund payments were filed by his predecessor in late 2010.[414]
Phillips 66 previously paid $2 million in 2014 to settle allegations it helped itself to Utah’s Petroleum Storage Tank Fund for cleaning up damage from leaking fuel storage tanks even though it had insurance to cover the cleanups. Phillips was said to have relied on the fund for cleanups at 82 service stations. "Consistently, these guys were saying, ‘No, we don’t have any insurance,'” said Therron Blatter, a branch manager for underground storage tanks at the Utah Division of Environmental Response and Remediation. “Clearly, they did have the insurance.”[415]
According to the Salt Lake City Tribune Phillips 66 was accused of defrauding the Utah’s Petroleum Storage Tank Fund to the tune of $25 million for cleanups associated with leaking underground tanks. In its lawsuit filed in 2012, the division alleged ConocoPhillips collected $25 million in payouts to cover cleanups at 82 service stations by falsely reporting that these sites were not covered by independent insurance. The suit sought to recover this money, plus punitive damages and fines totalling $10,000 for every day ConocoPhillips violated the law. But as lawyers gathered evidence it became apparent some of the claims were not that strong, said Brent Everett, director of the state Division of Environmental Response and Remediation. Officials said they are satisfied with the $2 million settlement, which amounts to less than 10 percent of what they originally claimed was misappropriated.[416][417]
January 12, 2017: Showdown Looms Over Phillips 66 Funded Bayou Bridge Pipeline
The Greater Baton Rouge Business Report reported on January 12, 2017 that the $750 million Bayou Bridge Pipeline project being jointly pursued by subsidiaries of Phillips 66, Sunoco Logistics and Energy Transfer Partners, will face off against environmentalists at a public hearing on January 12, 2017 over the proposed 162-mile Bayou Bridge pipeline, which, if approved, will run from Lake Charles through the Atchafalaya Basin to St. James Parish. Advocates of the project are expected to argue that pipelines are the safest, most environmentally friendly and cost effective way to transport oil, noting also that the proposed pipeline will join an existing network of pipelines crisscrossing the state. “This is not the first pipeline that will run through the Atchafalaya,” says Tommy Foltz, executive vice president of the Consumer Energy Alliance.
But environmentalists are expected to take issue with the claim that pipelines are safe. Anne Rolfes with the Louisiana Bucket Brigade, who will be among those attending tonight’s hearing, notes that Louisiana had 144 pipeline accidents in 2016. “Our pipelines are falling apart,” Rolfes says. “They are leaking. They have holes in them. They are rusty and corroded. Our state should be forcing industry to repair the current pipelines rather than permit a new one.” The state should also be exploring alternative fuel sources like solar and wind energy, which represent the economic development opportunities of the future, Rolfes says. “One of the fastest growing sectors of job growth is in renewable energy and we’re dealing with these guys who are stuck thinking about fossil fuels,” she says.[418]
January 12, 2017: Six Environmental Groups Join Against Phillips 66 Lawsuit Regarding Santa Maria Rail Project
Edhat Santa Barbara reported on January 12, 2017 that six environmental groups were granted permission to intervene in a lawsuit brought by Phillips 66, challenging the San Luis Obispo County Planning Commission's denial of the company's proposal to construct a crude oil train terminal for the Santa Maria Refinery. Phillips 66's lawsuit challenges the Planning Commission's determination that the site for the proposed oil train terminal contains rare and valuable habitat that is protected under the California Coastal Act and the County's local policies and ordinances. In granting the motion to intervene, the court ruled that the groups have an interest in protecting the environment as well as an interest in participating in further hearings on the project. The court allowed the environmental groups to join the lawsuit so that they could "continue to participate in and protect the environmental review process" as it relates to the Phillips project and the determination that the project would impact environmentally sensitive habitat. Now that the environmental groups are parties to the lawsuit, they plan to file a motion asking the court to dismiss the case as premature. The hearing on that motion is scheduled for February 16, 2017.[419]
January 10, 2017: Darren Cunningham Replaces Julian Stoll as New Refinery Manager at Phillips 66's Humber Refinery
The Grimsby Telegraph reported on January 10, 2017 that Darren Cunningham has been appointed as the new refinery manager at Phillip 66's Humber Refinery replacing Julian Stoll. Cunningham has previously been the refinery manager at Bayway Refinery for the past four years and returns to Humber after previously serving as operations manager for Humber Refinery until 2008. Cunningham will be Humber's fourth refinery manager in little over four years, following Julian Stoll, Brian Coffman and Mike Wirkowski, who left in 2012.
Stoll has been promoted to regional vice president for refining and will be relocating to Phillips Headquarters in Houston, Texas. Under Stoll's tenure, Humber Refinery completed a mega-turnaround, a feat unlikely to be seen again, as the largest shutdown in the site's near 50-year history was twinned with the replacement of the crude oil reception pipeline beneath the Tetney coastline. Following the huge projects, timed to coincide, Humber was named number one business unit in the entire Phillips 66 portfolio, recognizing operational excellence. At the time of the award, Mr Stoll said: "It was a tremendous performance. We shut down the most complex UK refinery, repaired it, brought it back online and ran for the rest of the year without any serious process issue. I've never seen that before, it was really world class performance. It was very fulfilling."[420]
January 4, 2017: DCP Midstream And DCP Midstream Partners Merge
Nasdaq reported on January 4, 2017 that DCP Midstream, a 50/50 joint venture between Phillips 66 and Spectra Energy, and DCP Midstream Partners, announced that they have signed and closed a transaction combining all of the assets and debt of DCP Midstream with DPM, simplifying the corporate structure and creating the largest natural gas liquids or NGL producer and gas processor in the United States.
The new company (DPM) will construct a new 200 MMcf/d cryogenic natural gas processing plant (Mewbourn 3) in the DJ Basin, its tenth plant in the basin, projected to be in service by the end of 2018. Additionally, DCP collaborated with several key producers to form a cooperative development plan which provides a framework to add another 200 MMcf/d plant by mid-2019. Together, these projects will increase capacity by 50 percent to 1.2 billion cubic feet per day to support growing processing needs of producers. DPM will also complete the next phase of its Grand Parkway low pressure gathering project and associated compression expansions by the end of 2018.
DPM is in the process of constructing additional field compression and plant bypass infrastructure that will add approximately 40 MMcf/d of incremental capacity during the summer of 2017. The new plants will connect to the Front Range Pipeline, one-third owned by DPM, for NGL takeaway to Mont Belvieu, Texas. Total capital investment for the plant and associated gathering is expected to be up to $395 million.
DPM will expand NGL takeaway capacity on Sand Hills Pipeline by 30 percent, or 85,000 barrels per day (BPD) to 365,000 BPD, through the addition of four pump stations and a pipeline loop (Sand Hills expansion) to meet NGL production growth from owned and third party plants in the Delaware Basin.[421]
DCP Midstream previously announced in April, 2016 they were eliminating 300 positions nationwide. After the 300 cuts, DCP will still employ about 2,900 overall. In a prepared statement, DCP Chairman and CEO Wouter van Kempen said the joint venture reduced its 2016 capital budget down to $250 million. In comparison, Phillips 66’s contribution alone to DCP’s capital budget last year was $550 million. Van Kempen noted DCP completed most of its capital construction program last year. “This is a challenging environment that we are managing through and we continue to execute on our strategy to reset our break-even cost to ensure we are the most reliable, safe, low-cost midstream services provider sustainable in any environment,” van Kempen said in a prepared statement.[422]
In September, 2015 Spectra Energy and Phillips 66 announced they would attempt to prop up their troubled natural gas liquids joint venture with $1.5 billion in cash and a share of two pipelines. DCP Midstream has been in trouble since last year as prices for the fuels have fallen and Spectra and Phillips 66 pushed DCP Midstream into a corporate restructuring earlier this year. In February, DCP Midstream announced plans to cut about 20 percent of its corporate staff and consolidate much of its remaining workforce in Denver and Houston. The latest transaction is intended to shore up the company’s balance sheet and ease its access to credit, the two companies said in the announcement. “The contribution of the one-third interests in Sand Hills and Southern Hills will diversify DCP Midstream by enhancing the balance of fee-based assets while building on the re-contracting work already underway,” said Greg Ebel, chairman and CEO of Spectra Energy, in a written statement.[423]
December 29, 2016: Seven Rail Cars Overturn at Phillips 66 Wood River Refinery
The Belleville News-Democrat reported on December 29, 2016 that seven cars overturned at the Wood River Refinery in Roxana on Thursday morning, spilling about one gallon of acid that was quickly contained, according to officials. “We are monitoring the area, and there are no injuries or impacts to the community. Refinery operations are not impacted,” read a statement from Wood River Refinery. Norfolk Southern spokesman Dave Pigeon said the material that leaked was a waste product from the refining process known as spent sulfuric acid. It can eventually be recycled and reused, he said, but is transported as hazardous materials. There were seven cars derailed in the incident, Pigeon said, with five cars that came to rest on their sides while two remained upright. As of 3:30 p.m., Norfolk Southern workers had uprighted three of those five cars.[424]
December 29, 2016: Standing Rock Activists Target Profits of Phillips 66 Funded Dakota Access Pipeline
The Guardian reported on December 29, 2016 that Native American activists are targeting the Dakota Access pipeline’s finances in an effort to further strain the oil corporation and cause continuing delays that they hope could be disastrous for the project focusing on an approaching January 1, 2017 deadline that the operator, Energy Transfer Partners (ETP), has cited in court records. ETP wrote in a filing this year that the pipeline “committed to complete, test and have DAPL in service” by the start of 2017. And if the company did not meet its contract deadline, then its shipping partners had a “right to terminate their commitments”. But in emails to the Guardian, DAPL spokeswoman Vicki Granado claimed that January was just an “initial target” and not a “contractual date”, which is “much later”, though she refused to say when. Her statement, which contradicts the company’s official court testimony on multiple occasions, has prompted accusations that the corporation has either committed perjury or is lying to reporters. Regardless of the significance of the January date, opponents of the project argued that the continuing suspension of the project is already having a big impact on the ETP’s bottom line.
The financial challenges for Energy Transfer come at a time when the company is already in a precarious economic situation due to broader industry trends, analysts said. Global oil prices began to collapse in 2014 after shippers committed to DAPL, and production in the Bakken Shale oil field has fallen, which has created major hardships for drillers, according to the recent Ieefa report. That means the existing pipeline infrastructure may be adequate to handle regional oil production, and that if the contract deadline does expire, shippers could be eager to pull out or renegotiate favorable terms.
LaDonna Brave Bull Allard, a Standing Rock tribe member who owns land where one of the main camps remains in place, said the DAPL corporation was “panicking” about its finances and misleading the public. The company should not be trusted, she said, noting that the construction site was being monitored to ensure that DAPL workers do not start drilling under the Missouri river, which provides the tribe’s water supply. “We are preparing because we know we have a fight on our hands. We will be standing our ground no matter what.”[425]
Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
December 29, 2016: U.S. Refiners Face Severe Labor Shortage For Deferred Maintenance
Reuters reported on December 29, 2016 that refiners are now competing for pipe fitters and ironworkers with a host of billion-dollar energy projects, including Cheniere Energy's liquefied natural gas export terminals and a new petrochemical unit for Dow Chemical and without undertaking the work they need, refineries run the risk of more unscheduled outages at plants. "Putting off work definitely affects the safety of the refinery," said Ed Lee, an independent refinery safety consultant. U.S. refiners are expected to spend $1.26 billion on planned maintenance next year, up 38 percent from this year and the highest level since at least 2010 as a spate of unexpected outages have hit refineries nationwide, taking hundreds of thousands of barrels off the market and boosting gasoline prices and margins. "Refiners are going to have trouble finding even the lowest skilled workers, such as scaffold builders, and you can't do work at a refinery without a scaffold," said said Anthony Salemme, a vice president at IIR. "That's going to complicate scheduling and even extend outages." According to IIRC the coastal region from Brownsville, Texas to New Orleans - the largest U.S. refining region - will be short roughly 37,400 craftsman needed to complete all of the planned capital projects in 2017. "We are definitely feeling the labor shortages in skilled craft labor," said Paul Tooze, construction manager for the oil, gas and chemicals business at Bechtel.
A recent survey conducted by the Associated General Contractors of America found that 74 percent of Texas contractors are having trouble filling hourly craft worker positions, and a majority of them believed they would continue to struggle over the next year. More than 60 percent of the respondents said they bumped up salaries to attract more skilled craft workers. "These shortages have the potential to undermine broader economic growth by forcing contractors to slow scheduled work or choose not to bid on projects, thereby inflating the cost of construction," said Stephen Sandherr, head of the Associated General Contractors.[426]
Phillips 66 recently announced that the Ponca Refinery is beginning the largest turnaround since 2011 which at its peak will involve more than 1,000 contract laborers from approximately 35 different companies. The turnaround requires a large monetary investment from the company and there is a large outlay of dollars spent in the Ponca City community as contract laborers will fill hotel and motel rooms, RV parks, and rental properties and will spend money throughout the community. [427]
December 23, 2016: Enbridge Stalls on Purchase of Stake in Phillips Funded Dakota Access Pipeline
The Duluth News Tribune reported on December 23, 2016 that Enbridge Energy Partners L.P. and its joint venture partner Marathon Petroleum Corp. now have until March 31, 2017 to back out of a deal to purchase a stake in the Dakota Access Pipeline, according to a recent Securities and Exchange Commission filing. The previous deadline to terminate the sale was December 31, 2016. The Enbridge/Marathon purchase was announced August 2, 2016 just before pipeline protests erupted around a river crossing north of the Standing Rock Reservation. SEC filings show the joint venture is to pay $2 billion for a 49 percent interest in Bakken Holdings Co. LLC, a subsidiary of Energy Transfer Partners and Sunoco Logistics Partners that owns 75 percent of the Dakota Access pipeline. Phillips 66 owns the remaining 25 percent of the Dakota Access Pipeline. None of the companies involved cite a reason to push back the termination date in SEC filings, though uncertainty over the project’s future could play a part.[428] "If Enbridge and Marathon thought that completion of the pipeline was a done deal, the money would have been a done deal too," said Energy analyst Antonia Juhasz. "This means they are worried and are not feeling secure enough to turn over their cash, putting even more financial pressure on Energy Transfer Partners."[429]
December 23, 2016: Phillips 66 Alliance Refinery Donates $65,000 to Sorrento Fire Department
The Creole reported on December 23, 2016 that Phillips 66 recently donated $50,000 to the Sorrento Fire Department to help with both aging equipment and losses suffered during the August flood with some of the money used to replace a 20-year-old fire truck by matching a grant. Several assets in south Louisiana, including a Sorrento salt cavern in the McElroy Swamp, were acquired by Phillips 66 earlier this year.[430]
December 20, 2016: Phillips 66 Donates $35,000 to Amarillo Police for Training
Myhighplains reported on December 20, 2016 that Phillips 66 Amarillo Pipeline Division has made a grant of $35,000 to the Amarillo Police Department to provide updated supervisory and leadership training to police supervisors.[431]
December 19, 2016: Vallejo Mayor Wants Phillips 66 and Other Refiners to Pay for Air Monitoring Equipment After Oil Spill in San Pablo Bay
KQED reported on December 19, 2016 that incoming mayor of Vallejo is calling on Phillips 66, Valero, Shell, and Tesoro to foot the bill for new air monitors for five Bay Area cities that sit near local refineries after a mysterious odor sickened dozens of Vallejo residents around the same time an oil spill was discovered in San Pablo Bay in September. The U.S. Coast Guard’s investigation into the oil spill concluded that the spill came from either the marine terminal for Phillips 66 Rodeo refinery or an oil tanker that was unloading crude there. “I think as a good neighbor, Conoco Phillips 66 should be concerned about providing air quality monitors to the surrounding communities,” said Mayor-elect Bob Sampayan. “I want to see a more expanded role with the oil companies in providing information should we have this kind of incident occur again.” A spokesman for Phillips 66 did not respond to a request for comment, and a representative for the Western State Petroleum Association said the industry group has no comment.[432]
December 18, 2016: Pickens Sponsor First Formal Dinner in E. W. Marland's Private Dining Room at the Mansion in 75 Years
The Ponca City News published a paid article on December 18, 2016 about a formal dinner that took place in E. W. Marland's private dining room at the Marland Mansion. A party of twelve guests were served dinner in the formal dining room on December 10, 2016 courtesy of Hugh Pickens and Dr. S. J. Pickens, the signature sponsors of this year's Gala at the Mansion supporting the Marland Mansion Estate Foundation. Dinner has not been served in the Marland's private dining room at the Mansion since Mr. Marland's passing in 1941. Although Marland lost his oil company to banking interests in the 1920's and closed the mansion, he would reopen the “Palace on the Prairie” to parties and formal dinners during his tenure as Governor of Oklahoma from 1935 to 1939. "We are honored to have the opportunity to sponsor the Marland Gala this year," said Pickens, "and especially honored to be the first guests to have dinner in E. W. Marland's formal dining room in over 75 years."
Terron Liles, Chairman of the 2016 Marland Gala, made every effort to create the ambiance of a formal dinner just as it would have been served in the 1920’s when Marland was building his vast oil empire. Marland was an Anglophile, so dinner was served Downton Abbey style just as it would have been served to Marland and his guests. Wait staff dressed as footman and maids in formal attire served the meal with grace and elegance. "We want to express our sincere gratitude to the Pickens for being our major sponsor for the 2016 Gala," said Terron Liles, Chairman of the Marland Foundation, “and we want to thank them for their generosity toward the Marland Gala, The Marland Estate Foundation and the Marland Mansion as a whole." “My husband and I would like to thank Terron Liles, the organizer of the Gala, David Keathly, Executive Director of the Marland Estate, our guests, and those who prepared and served the food throughout the night, and everyone else associated with the Gala,” said Dr. Pickens. “This has truly been a night to remember that we will treasure for the rest of our lives.”[433]
- Learn more about the historic Dinner at the Marland Mansion
December 16, 2016: Phillips 66 Awards Three Grants to City of Ponca City for $120,000
The Ponca City News reported on December 16, 2016 that Phillips 66 has award three grants to the city of Ponca City for a total of $120,000 intended to enhance the environment and safety of the community. A $60,000 Pillar of Safety grant will be used to purchase and install musical-themed playground equipment at Garfield Park. A $30,000 Pillar of Safety grant will be used to purchase mobile repeaters for the City of Ponca City’s public safety communication radio system in order to enhance public safety and emergency operations. A $30,000 Pillar of Environmental grant will be used to purchase and distribute dual smoke and carbon monoxide battery operated detectors that will be distributed on a first come, first serve basis to income-qualifying homeowners.[434]
The Ponca City News reported on December 21, 2016 that in addition to the three grants already announced on December 16, 2016 Phillips 66 is contributing two additional grants for a total of $165,000. The grants include a pillar of Safety grant to McCord School for installation for protection to ensure safety for the children on the playground and a pillar of education and literacy a grant to Ponca City High School to help grow the robotics program, which will benefit from funding to help students with materials and components and help defray the cost of competitions.[435]
December 16, 2016: Phillips 66's Freeport LPG Export Terminal is Now Fully Operational
Businesswire reported on December 16, 2016 that Phillips 66's Freeport LPG Export Terminal located in Freeport, Texas, is fully operational. The company loaded its first contracted cargo on the Commander, a very large gas carrier that departed the terminal on December 16. “The startup of the Freeport LPG Export Terminal is the culmination of a four-year effort to develop a new U.S. Gulf Coast natural gas liquids (NGL) market hub that also includes Phillips 66 Partners’ 100,000 barrel-per-day Sweeny fractionator and 7.5 million barrel Clemens storage facility,” said Greg Garland, chairman and CEO of Phillips 66. “The new liquefied petroleum gas (LPG) export terminal gives customers the ability to place multi-grade LPG products directly into global markets through Port Freeport, which provides immediate blue water access with minimal congestion.”
The Freeport LPG Export Terminal can simultaneously load two ships with refrigerated propane and butane at a combined rate of 36,000 barrels per hour. Supply is sourced from the Phillips 66 Partners’ Sweeny fractionator and Clemens storage facility, which is connected by pipeline to the Mont Belvieu Hub.[436]
December 15, 2016: Osage Nation Wants to Increase Oil and Gas Production
Oil and Gas 360 published an article on December 15, 2016 about the history of mineral rights and oil and gas production in the Osage Nation since 1870 when the remainder of Osage land in Kansas was sold and the proceeds used to relocate the tribe to Indian Territory. According to the article the Osage Nation has a long history of smart deal making and being expert negotiators. “By their delays in agreeing to removal, the Osage benefited by the change in administration; they sold their lands to the administration of President Ulysses S. Grant, for which they received $1.25 an acre rather than the 19 cents previously offered to them by the US.” The Osage were one of the few American Indian nations to buy their own reservation, and they retained more rights to the land and sovereignty as a result. Unlike its arrangements with other Native American tribes, in 1906, the U.S. Congress reserved the entire Osage Minerals Estate for the benefit of all of the Osage members.
“Already rich from leases of their grazing lands, the Osage grew exponentially more wealthy after the discovery of oil on their lands. In 1895 Henry Foster of Kansas acquired a blanket lease that covered the entire Osage Reservation, more than 1.5 million acres—the ‘Foster lease’. Over the next two decades the Osages’ ‘underground reservation’ would produce more wealth than had all of the American gold rushes combined.” Unlike other landholders, the Osage were able to retain collective ownership of subsurface mineral rights, rather than having to accept allotments to individual owners. Instead, tribal members received ‘headrights’ that assured them an equal share of mineral rights.
The Osage Nation has been vocal about getting the U.S. government to speed up oil and gas permitting on its reservation. In March of 2016, a delegation of tribal councilmembers testified before the U.S. House of Representatives Appropriations Committee, Subcommittee on Interior, Environment and Related Agencies, chaired by Oklahoma Congressman Tom Cole. The Osage councilmembers testified as follows: “Congress called us Headright Owners. Each Headright Owner had one share of royalty from the production of oil and gas in the Osage Minerals Estate. The Osage Minerals Estate has been producing oil since 1896, making it one of the oldest fields in the United States. Our Minerals Estate contains proven reserves. In 2015, it was estimated that our Headright owners would receive about $13.6 billion in royalties from 2012 to 2027. That’s about $1 billion a year."
Everett Waller, chairman of the Osage Nation Minerals Council, is one Osage tribal member and a former Bureau of Indian Affairs employee who is doing everything in his power to remove the federal agency’s roadblocks to new drilling on Osage lands. "We’re going to use the new 3D technology just like they’re going to use on the old fields in Texas. The projections there are through the roof. I have some of the largest dome caps in the world here, and if we can find one out of the three they predict are here, we’re going to be in business. I’m going to have all workovers ready to go, and if we have to, we’ll go to court to get the permitting done. I believe the new technology is going to bring us new production, and that’s going to be the key to survival here."[437]
December 13, 2016: Protesters of Phillips 66 Funded Dakota Access Pipeline Say 176,000 Barrel Oil Spill in western North Dakota 'Validates Struggle'
NBC News reported on December 13, 2016 that North Dakota officials estimate that more than 176,000 gallons of crude oil has leaked from the Belle Fourche Pipeline over the past week into the Ash Coulee Creek in western North Dakota validating the concerns of those who spoke out against the project for months, activists said. "The spill gives further credence to our position that pipelines are not safe," said Tara Houska, a Native American environmental activist who has resided at the camp since August. "Oil companies' interest is on their profit margins, not public safety." One of the protesters' central arguments for months has been that, despite assurances from Energy Transfer Partners — the Dallas-based company funding the $3.7 billion project — an oil spill would be inevitable. And the Standing Rock Sioux Tribe believes that a spill would devastate the Missouri River, which is the main water source for the tribe. In an interview last month, Energy Transfer Partners CEO Kelcy Warren told NBC News that he could not assure the tribe that an oil spill could not potentially occur. Warren would only say that the Dakota Access Pipeline was prepared to withstand such an event. "They can say they have all the latest technologies to safeguard against a leak," Standing Rock Sioux Chairman Dave Archambault II told NBC News. "But when that leak happens, and it will, all those safeguards will go out the window."[438]
The leaking segment of the pipeline was built in the 1980s. Since then, construction materials and pressure monitoring equipment have improved, and tighter regulations have been put in place. "It's hard to compare one company, especially one that has had a pipeline in the ground for maybe 40 or 50 years, to a brand new pipeline," says Carl Weimer, executive director of the nonprofit Pipeline Safety Trust. "It's not just the old ones that fail, new ones can fail also." Since 2010, according to data from the Pipeline and Hazardous Materials Safety Administration, operators have reported about 200 crude oil spills per year, on average. Most of them are comparatively small — think a few bathtubs full or less. The Belle Fourche pipeline leak is the largest in North Dakota since 2013. But the same company that owns and runs the pipeline was involved in another oil spill in Montana in 2015 that leaked 30,000 gallons of crude into the river. At one point, tests showed traces of oil in the local drinking water. Still, generally these incidents are low probability, high impact events, and John Stoody with the Association of Oil Pipelines says they remain the most efficient way to go. "They're also the safest way to move crude oil and petroleum around," says Stoody.[439]
Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
December 12, 2016: Donald Trump Says He'll Solve the Dakota Access Pipeline Question
UPI reported on December 12, 2016 that President-elect Donald Trump promised quick action on the Dakota Access oil pipeline if it's not "solved" by the time he's scheduled to take office in January. "Let me not answer the Dakota [oil pipeline question] because perhaps that'll be solved by the time I get there, so I don't have to create enemies on one side or the other," Trump told Fox News. "But I will tell you when I get to office, if it's not solved, I'll have it solved very quickly." Trump did not elaborate on what "solved" implied.[440]
December 9, 2016: Phillips 66 Cuts Capital Spending by 25 Percent in 2017
Fuelfix reported on December 9, 2016 that Phillips 66 will cut its capital spending by 25 percent next year, spending $2.7 billion in capital spending in 2017 — not counting joint ventures — with nearly $1.5 billion going to pipeline and terminal projects, and more than $900 million toward refining improvements. “The reduction in capital spending from prior years reflects that fewer projects meet our return thresholds in the current business environment,” Phillips 66 Chairman and CEO Greg Garland said in a prepared statement, noting an ongoing emphasis on share buybacks and investor dividend growth. One of the big 2017 projects is completing the Bayou Bridge Pipeline from its Beaumont terminal to St. James, La. Only the Louisiana portion of construction remains. Phillips 66 also will spend another $1.1 billion next year on joint ventures like Chevron Phillips Chemical and DCP Midstream. Chevron Phillips next year will complete its U.S. Gulf Coast Petrochemicals Project near Houston to produce much more chemicals and plastics from Baytown and Sweeny.
Phillips 66 is also a 25 percent owner of Energy Transfer Partners’ Dakota Access project. According to the NY Times Energy Transfer Partners, the nation’s biggest pipeline operator, has lost $450 million dollars from delays in the completion of the Dakota Access Pipeline and its standoff with the Standing Rock Sioux Tribe over a section running through tribal lands could mean an additional $80 million a month in losses. According to the Wall Street Journal U.S. District Judge James Boasberg has denied a request by Energy Transfer Partners LP to quickly force the federal government to approve the final link in its Dakota Access pipeline, but said he would take up the issue next year ordering lawyers for Energy Transfer Partners and the Justice Department to file motions by January 31, 2017.[441][442][443]
December 9, 2016: Phillips 66 Wood River Refinery Donates $125,000 to Playground Project
The Alton Daily News reported on December 9, 2016 that Phillips 66 Wood River Refinery has donated $125,000 toward Alton's Gordon Moore Park that will be a part of massive upgrades at the facility along Illinois Route 140.[444] “Phillips 66 is a company that believes in the importance of celebrating diversity and achieving inclusion within our community,” Phillips 66 spokesperson Megan Allen said. “This project is a perfect representation of the values we respect and abide by as a company. It was a natural connection for us to be involved in the development of this playground.”[445]
December 7, 2016: Court Orders Further Review of Phillips 66 Propane Project at Rodeo Refinery
The East Bay Times reported that Contra Costa Superior Court Judge Barry Goode has voided a land use permit and the certification of an environmental report for a propane project at the Phillips 66 petroleum refinery issuing an order voiding the land use permit and the Environmental Impact Statement's certification, pointing to shortcomings in the EIR’s analysis of emissions and air pollution. The Phillips 66 Propane Recovery Project calls for installing new equipment to recover and sell propane and butane instead of burning the fuel at the refinery or flaring off excesses. The refinery has said the project will reduce pollution while creating well-paying jobs and generating taxes. It would involve construction of new distillation columns and absorber towers, a hydrotreater, six propane storage vessels, a loading rack, two rail spurs, some additions and modifications to ancillary facilities, and perhaps a new steam boiler.
“Phillips 66 is pleased with the court’s conclusion that the county’s environmental analysis was performed correctly regarding almost every claim raised by the plaintiffs,” refinery spokesman Paul Adler said in an email this week. “With respect to the limited issues in the air impacts analysis that the Court found lacking, we are reviewing that portion of the Court’s decision.”[446]
December 7, 2016: First Dinner to be Served in Marland's Formal Dining Room at Marland Mansion in 75 Years
The Ponca City News reported on December 7, 2016 that something is happening in Ponca City that hasn't occurred for at least seventy-five years. On December 10 dinner will be served in E. W. Marland's private dining room at the Marland Mansion for the first time since 1941. A party of twelve guests will have dinner in the formal dining room courtesy of Hugh Pickens and Dr. S. J. Pickens, the signature sponsors of this year's Gala at the Mansion supporting the Marland Mansion Estate Foundation. The Marland Gala is a fundraiser for the Marland Estate Foundation whose mission is to restore and preserve the historic, architectural landmark and to educate people on the E.W. Marland story.
Dinner has not been served in the Marland's private dining room at the Mansion since Mr. Marland's passing in 1941. Although Marland lost his oil company to banking interests in 1929 and closed the mansion, he would reopen the mansion to parties and formal dinners during his tenure as Governor of Oklahoma from 1935 to 1939. "We are honored to have the opportunity to sponsor the Marland Gala this year," said Pickens, "and especially honored to be the first guests to have dinner in E. W. Marland's formal dining room in over 75 years."
The Pickens' invited guests include Ponca City Mayor Homer Nicholson, Barbara Rozell, Kay County District Attorney Brian Hermanson, Ruslyn Hermanson, Marland Estate Manager David Keathly, Marcia Keathly, Phillips 66 Community Affairs and Public Relations Head Diane Anderson, Deloris Pickens, and Joseph Gierek, owner of the Gierek Art Gallery in Tulsa and his wife Mary Gierek. "We want to express our sincere gratitude to the Pickens for being our major sponsor for the 2016 Gala," said Terron Liles, Chairman of the Marland Foundation, “and we want to thank them for their generosity toward the Marland Gala, The Marland Estate Foundation and the Marland Mansion as a whole."[447][448][449]
December 5, 2016: Trump Team Pledges Support for Completing Blocked Dakota Access Pipeline
The Wall Street Journal reported on December 5, 2016 that a spokesman for President-elect Donald Trump said the incoming administration supports completing the Dakota Access Pipeline, funded in part by Phillips 66. “With regard to the Dakota Access Pipeline, that’s something that we support construction of and we’ll review the full situation when we’re in the White House and make the appropriate determination at that time,” said Jason Miller, a spokesman for Mr. Trump. The statement by the Trump transition team, however, cast doubt on whether that decision would hold any sway after the new administration takes over in January. Pipeline experts said that Mr. Trump would have several options once he takes office to enable the $3.8 billion pipeline to proceed. That could include directing the Secretary of the Army to reinstate a previous permit for the reservoir crossing, or issuing an executive order approving the pipeline.[450]
However Rep. Raul Grijalva (D-Ariz.), the top Democrat on the Natural Resources Committee and an early ally of Dakota Access opponents, praised Obama’s decision. He said this “big win for tribal rights, for environmental quality and for every American who has stood in solidarity with the water protectors” should survive after Obama leaves office. “It now falls to the Trump administration to follow the law, treat this entire process with the respect and seriousness it demands, and honor the sacrifices of the Americans who put themselves in harm’s way to demand justice at Standing Rock,” Grijalva said.[451]
December 5, 2016: Could Phillips 66 Funded Dakota Access Pipeline Lose Its Contracts with Oil Companies on January 1?
Democracy Now reported on December 5, 2016 that according to Amy Goodman, a new report exposes "The Rickety Finances Behind the Dakota Access Pipeline," published by the Institute for Energy Economics and Financial Analysis and the Sightline Institute that spotlights a potential economic weakness of the project: the January 1st deadline by which Energy Transfer Partners had promised oil companies it would have completed construction. Missing the January 1st deadline opens up the possibility the pipeline company may lose its contracts with oil companies.
"One of the fundamental findings of our report was that the oil market has changed dramatically since the pipeline was first proposed in early 2014," says Clark Williams-Derry. "Back then, oil prices were at $100 a barrel or more, and oil production in North Dakota was rising. It kept rising and rising. And all the forecasts said that oil prices were going to remain high and that oil production in North Dakota was going to remain robust. But almost as soon as the companies signed up its first set of shippers, the first commitments from oil companies to ship through the pipeline, you started to see oil markets collapse. You saw prices fall from $100 a barrel down to $50 a barrel. And as that happened, oil companies in North Dakota started to pull back. They stopped—they weren’t drilling as much. A lot of them were starting to lose money from some of their oil projects in the Bakken region in North Dakota. And so, what you started to see is a decline in production. You’ve already seen a 20 percent dip in production in the Bakken region since oil prices started to collapse. And it’s still collapsing. It’s still declining by a percent or two every month. And if those declines—that decline in production continues, well, it’s not clear that the pipeline’s capacity is going to be needed at all."
“Oil markets have changed radically since ETP first locked in its contracts,” Williams-Derry said. “Shippers have to be asking themselves if the contracts they signed in early 2014 still make sense. ETP boxed itself in with the January 1 deadline.”[452][453]
Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
December 4, 2016: Corps of Engineers Blocks Drilling of Phillips 66 Funded Dakota Access Oil Pipeline
The NY Times reported on December 3, 2016 that the Standing Rock Sioux Tribe has won a major victory in its battle to block the Dakota Access Pipeline, funded in part by Phillips 66, being built near its reservation when the Department of the Army announced that it would not allow the pipeline to be drilled under a dammed section of the Missouri River. The announcement set off whoops of joy inside the Oceti Sakowin camp. Tribal members paraded through the camp on horseback, jubilantly beating drums and gathering around a fire at the center of the camp. Tribal elders celebrated what they said was the validation of months of prayer and protest. “It’s wonderful,” Dave Archambault II, the Standing Rock tribal chairman, told cheering supporters who stood in the melting snow on a mild North Dakota afternoon. “You all did that. Your presence has brought the attention of the world.” The Standing Rock Sioux had objected to the pipeline’s path so close to the source of their drinking water, and said any spill could poison water supplies for them and other reservations and cities downstream. They also said the pipeline’s route through what are now privately owned ranches bordering the river crossed through sacred ancestral lands.
The Army said it would look for alternative routes for the $3.7 billion Dakota Access pipeline. “The best way to complete that work responsibly and expeditiously is to explore alternate routes for the pipeline crossing,” Jo-Ellen Darcy, the Army’s assistant secretary for civil works, said in a statement. The move could presage a lengthy environmental review that has the potential to block the pipeline’s construction for months or years.
Though the Army’s decision calls for an environmental study of alternative routes, the Trump administration could ultimately decide to allow the original, contested route. Representatives for Mr. Trump’s transition team did not immediately respond to requests for comment. There was no immediate response from Energy Transfer Partners, but its chief executive, Kelcy Warren, has said that the company was unwilling to reroute the pipeline, which is intended to transport as much as 550,000 barrels of oil a day from the oil fields of western North Dakota to a terminal in Illinois.[454]
Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
December 1, 2016: Phillips 66 presents check for $57,000 for Flint Hills Maps in Butler County, Kansas
The Butler County Times Gazette reported on December 1, 2016 that Phillip 66 presented a $57,000 check to all of the schools in Butler County, Kansas for the display of a new Flinthills map, showing students just where it is they live, and where the Tall Grass Prairie is located. “The idea is too many children who grow up in the Flint Hills, grow up believing they are from no where,” said Emily Connell, who is part of the program. The latest map was dedicated at Flinthills Primary School in Cassoday recently, at which time a major donor for the Butler County schools, Phillips 66, was recognized. The goal was to be in 150 schools in the Flint Hills and they are close to 170. When they get in the Oklahoma schools in the region they will be close to 180 schools. It is important to realize all of the Butler schools were funded through Phillips,” Connell said. “All of this is because of Phillips. It’s huge to have a corporation like Phillips step forward.”
The whole idea behind the map is place-based education. It includes not only a map of the Flint Hills but also the Tall Grass Prairie and information about the area on each of the maps, with different maps created for elementary, middle school and high school/college levels. This is the first time a map has shown the remaining native tall grass prairie. Ninety-six percent of it has been plowed and developed, making the tall grass prairie the most altered ecosystem there is.[455]
November 30, 2016: Ponca Refinery Begins Largest Turnaround Since 2011
The Ponca City News reported on November 30, 2016 that the Ponca Refinery is beginning the largest turnaround since 2011 which at its peak will involve more than 1,000 contract laborers from approximately 35 different companies. The turnaround requires a large monetary investment from the company and there is a large outlay of dollars spent in the Ponca City community. Contract laborers will fill hotel and motel rooms, RV parks, and rental properties and will spend money throughout the community. The city of Ponca City will benefit from tax revenues that come from this project. “This investment is just another example of the company’s commitment to Ponca City and the area for the long term,” said Tim Seidel, manager of the Ponca City Refinery. “It shows our company’s support to the Ponca City Refinery. Our employees who call Ponca City home are committed to make our refinery the best in the industry.”[456]
A turnaround is a planned break in production so that maintenance may be performed. Most refineries go through a turnaround every three to five years. Each turnaround requires extensive planning and careful coordination of labor and materials. Most often, the shutdown happens when production is at its lowest and required skilled labor is readily available. Some turnarounds take a few weeks to complete. Others may need a few months. Turnarounds depend entirely on the extent of the project and any problems that occur or are found along the way. Most refineries go through an extensive inspection and testing process during a turnaround. If the inspection or testing identifies a problem, the time may be extended.[457]
November 30, 2016: Ponca Refinery Will Start Revamp of their Largest Crude Fractionation Unit in 2017
The Ponca City News reported on November 30, 2016 that the Ponca Refinery is in the early construction stages of revamp to its largest crude fractionation unit which will allow the refinery to convert a larger percentage of crude oil into motor fuel (specifically more diesel); replace older equipment with state of the art, energy efficient equipment; and will enable the refinery to run more local grades of Oklahoma crude. The project, which is in its early constructions stages now will start in 2017.[458]
November 30, 2016: Ponca Refinery Has Hired Fifty New Operators and Maintenance Personnel in Last Two Years
The Ponca City News reported that Ponca Refinery has hired close to 50 new operators and maintenance personnel in the last two years. “Over the past two years, Phillips 66 PCR has hired close to 50 new operators and maintenance personnel. We have a strong partnership with Northern Oklahoma College, which has the Process Technology (PTech) degree program that helps with having qualified operator candidates,” according to Tim Seidel, refinery manager. “Also Pioneer Tech, right here in Ponca City is a critical partner to provide educational and training programs for our mechanical craft workers for both employees and contractors. “New in 2016, the refinery started an instrumentation internship program, partnering with the Oklahoma State University-Information Technology’s (OSU-IT), four-year degree plan. In the same two year time period, we have hired nine engineers and scientists with the off-campus hires coming primarily from our core universities of OU, OSU and KSU.”[459]
The Ponca City News reported on October 14, 2012 that Refinery Manager Pete Stynes spoke to the Ponca City Lions Club on October 10, 2012 about Phillips 66's Refinery in Ponca City and said that 800 employees work at the refinery with the direct employment of 625 Phillips employees.[460]
November 30, 2016: Two Thousand Veterans to Protect Protesters of Phillips 66 Funded Dakota Access Pipeline
UPI reported on November 30, 2016 that the Veterans Stand For Standing Rock group says it plans to have up to 2,000 veterans help protect Dakota Access Pipeline protesters from what it describes as abusive and humiliating tactics committed by a "militarized police force." The group has called on veterans joining the protest to bring body armor, gas masks, earplugs and shooting mufflers, due to possible use of a sound cannon by police and asked veterans not to bring drugs, alcohol or weapons. "This event ... will not tolerate hate, violence or divisive behavior of any kind. We're doing this to support our country so let's do it with honor, working together," the group wrote on Facebook. "We can stop this savage injustice being committed right here at home. If not us, who? If not now, when?"
Police forces have been criticized for using tear gas and other non-lethal methods, such as rubber bullets and water cannons amid freezing temperatures, to disrupt the protests. "Are you going to treat us veterans who have served our country in the same way as you have those water protectors?" said Loreal Black Shawl, a Native American eight-year U.S. Army veteran. "We're not there to create chaos. We are there because we are tired of seeing the water protectors being treated as non-humans."
North Dakota Gov. Jack Dalrymple this week signed an emergency evacuation order to clear Dakota Access Pipeline protesters from U.S. Army Corps of Engineers territory.[461] Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
November 23, 2016: Phillips 66 Donates $25,000 To Help Cushing Recovery From Earthquake
The Ponca City News reported that Phillips 66 presented a $25,000 donation to the the American Red Cross to help to help people affected by the 5.0 earthquake in Cushing, Oklahoma on Nvember 6, 2016 as well as increase earthquake and disaster preparedness education throughout the Cushing area and Northwest Oklahoma. “It is Phillips 66’s pleasure to team up with an outstanding organization such as the Red Cross and be able to give back to the Cushing community,” said Rodger Lewis, manager, central pipeline division, Phillips 66. “Our employees who work in the community immediately recognized a need to help their fellow citizens affected by the recent earthquake. Supporting the communities where we operate aligns with our core values of safety, honor and commitment, and we hope our donation will help those in the Cushing community who are in need of assistance.”[462]
November 21, 2016: Police, Citing ‘Ongoing Riot,’ Use Water Cannons in Freezing Weather on Protesters Against Phillips 66 Funded Dakota Access Pipeline
The Washington Post reported on November 21, 2016 that police used water cannons to disperse a group of about 400 protesters against the Dakota Access Pipeline, funded in part by Phillips 66, as they tried to move past a barricaded bridge toward construction sites for the project. As temperatures in Cannon Ball, N.D., dropped into the 20s, police in riot gear sprayed activists with a hose mounted atop an armored vehicle and formed a line to prevent them from advancing up the road. Protesters also reported being pelted with rubber bullets, tear gas and concussion grenades during the standoff, which lasted until late Sunday night.
Protesters, who call themselves “water protectors,” have argued that the barricade prevents emergency services from reaching the Standing Rock Sioux Reservation and a nearby camp they have used as a staging ground for demonstrations. “Folks have a right to be on a public road,” said Dallas Goldtooth. “It’s absurd that people who’ve been trying to take down the barricade now have their lives at risk.” The sheriff’s department told the Tribune that the bridge has been closed since October because transportation officials were concerned about its structural integrity.[463]
- Learn More About Dakota Access Pipeline
November 21, 2016: Phillips 66 to Host Chamber of Commerce at Ponca Refinery
The Ponca City Chamber of Commerce reported on November 21, 2016 that Phillips 66 will be hosting an open house for chamber members on November 22, 2016 in E. W. Marland's board room and office at the Ponca Refinery.
November 16, 2016: Scores Arrested in Nationwide Protests Against Phillips 66 Funded Dakota Access Pipeline
NBC News reported on November 16, 2016 that dozens of protesters against Dakota Access Pipeline, funded in part by Phillips 66, were arrested in what organizers called a "National Day of Action" by self-proclaimed "water protectors" near Army Corps of Engineers offices from Los Angeles to New York City. The protests planned for more than 300 communities across the U.S. were an intended show of solidarity with the Standing Rock Sioux Indian tribe, which says its drinking water and way of life are threatened by the proposed pipeline. In Los Angeles, an estimated 1,500 protesters gathered peacefully in the financial district, while hundreds participated in a march at Daley plaza in Chicago. Sen. Bernie Sanders joined a crowd in front of the White House, and police in riot gear met protesters marching in Denver. In Mandan, North Dakota, about 40 miles from where the pipeline would cross on the border of the Standing Rock Sioux Indian Reservation, 350 protesters blocked a railroad with a pickup truck and other debris. More than 25 were people were arrested, some on felony charges, according to the Morton County Sheriff Department.
Over 1,500 anti-Dakota Access Pipeline protesters marched in Lower Manhattan, many holding signs and placards decrying the pipeline, and others warning of a bleak future for their cause under a Trump administration. "It's important for us to show solidarity across the country for those of us who can't be there at Standing Rock," said Korina Emmerich, a Brooklyn resident and member of the Puyallup tribe. "It's so important to show that we are not stopping until they stop building the pipeline," said Emmerich, carrying a sign that read "Don't sign our Mother Earth over to pollution, war + greed."
The fate of the project lies with the U.S. Army Corps of Engineers. For weeks, the agency has been conducting a federal environmental review of the land in question. In its letter Monday, the Corps did not provide a timeline for its final decision.[464]
November 14, 2016: Phillips 66 Loads First Cargo From Billion Dollar Freeport LPG Terminal
Houston Business Journal reported on November 14, 2016 that the first cargo of propane and butane out of Phillips 66's new liquefied petroleum gas export terminal in Freeport, Texas, has been loaded and departed — ahead of the facility’s full-start in December. When it enters full operation in mid-December, the Freeport LPG terminal will have an export capacity of about 4.4 million barrels per month. The entire Gulf Coast region exported 20.34 million barrels of LPGs in August, according to the most recent data released by the U.S. Energy Information Administration. Phillips 66 broke ground on the Freeport LPG terminal in August 2014, when it was expected to cost about $1 billion. The new LPG export terminal is at Phillips 66's existing marine terminal in Freeport, south of Houston. The company will get the fuel from its Sweeny complex in Old Ocean and its Gulf Coast Fractionators facility in Mont Belvieu.[465]
November 14, 2016: Garland Sells $6.4 Million in Phillips 66 Stock
Gurufocus reported on November 14, 2016 that Phillips 66 CEO Greg C. Garland sold 76,165 shares of Phillips on November 10, 2016 at an average price of $83.48 a share for a total sale of $6.4 million.[466]
November 12, 2016: What Will the Trump Presidency Mean for Phillips 66 Funded Dakota Access Pipeline?
NBC News reported on November 12, 2016 that according to Kelcy Warren, CEO of Energy Transfer Partners, the incoming Donald Trump administration will ensure the completion of the controversial Dakota Access Pipeline in North Dakota. "I'm 100 percent sure that the pipeline will be approved by a Trump administration," said Warren. "I believe we will have a government in place that believes in energy infrastructure." In June, Warren donated $100,000 to the Trump Victory Fund, a joint fundraising committee for Trump's campaign, and a further $3,000 directly to the Trump campaign. For his part, Trump's campaign financial disclosure forms revealed the President-elect's investments totaling between $500,000 and $1 million in Energy Transfer Partners, suggesting a possible vested financial interest in the completion of the pipeline.
Warren, who has remained publicly silent on the pipeline for months as protests forced a halt in the pipeline's construction, labeled most of the protesters at Standing Rock as "violent mobs." He repeatedly praised the work of local law enforcement, despite reports of police brutality, unlawful arrests and mistreatment in jail. "It's unbelievable how they've conducted themselves," said Warren.
Standing Rock Sioux Chairman Dave Archambault II said that Warren's remarks reflected the mindset of a "Dallas-based billionaire" unconcerned with the well being of his tribe. "Energy Transfer Partners' assertion that there are no sacred sites affected is another example of how they ignore our voice and fail to listen to our serious concerns," Archambault said in the statement. "Once again, a Dallas-based billionaire and the state of North Dakota's archeologists continue to render our voice meaningless regarding our own understanding of our traditions, spirituality and culture."[467] Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
November 5, 2016: Iowa Landowners Criticize Work on Phillips 66 Funded Dakota Access Pipeline: 'They Show No Respect'
The Des Moines Register reported on November 5, 2016 that countless landowners across Iowa have petitioned county inspectors, supervisors and state regulators, claiming that questionable construction practices are worsening tensions between landowners and Dakota Access LLC, funded in part by Phillips 66. "It's evidence that even as the pipeline nears completion in Iowa, opposition to the pipeline and the way it has been built shows no signs of ebbing," writes Kim Hardy. "And some say the state has failed to do enough to protect landowners who now have pipeline running through their property. Dakota Access, however, maintains it has upheld its commitments to landowners."
Cyndy Coppola said she and her nephew have found several 30-inch steel rings and other debris on their 80-acre family farm in Calhoun County. She was astonished to see that crews have no garbage bins on site to collect refuse as they go. "I guess our biggest complaint is they show no respect," said Coppola, 68, who lives in Des Moines and was arrested for trespassing while protesting construction on her land in October. Inspectors have assured Coppola that crews eventually will come back to clean up the site. But she's skeptical, even as she watches debris getting pushed underground by heavy construction equipment. She worries that buried debris will eventually end up wrecking a combine during harvest. "We don’t think they’re going to make any effort to unbury what's already been covered up," she said. "That's a joke, because they’ve just gotten by with it all along."
Dakota Access spokeswoman Vicki Granado said the company takes its construction commitments "very seriously." And she said no complaints concerning the 1,295 parcels under construction in Iowa have been determined to be founded by the Iowa Utilities Board or county supervisors. "It is our goal to maintain this record throughout the rest of construction," Granado said, "which is nearing completion in Iowa."[468] Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
November 3, 2016: Chevron Phillips Chemical’s Ethane Cracker at Baytown Likely Will Cost Another $250 million to $500 million
Platts reported on November 3, 2016 that Chevron Phillips Chemical’s ethane cracker, a 50/50 JV of Phillips 66 and Chevron Corp., likely will cost another $250 million to $500 million because a months-long delay has pushed its target startup to the second half of 2017. Phillips 66 Chief Executive Greg Garland told analysts last week that the delay will probably raise the cost of the project in Baytown, Texas, by 5%-10% “just due to delays we are seeing in construction,” though two associated polyethylene plants 86 miles away in Sweeny, Texas, are expected to be mechanically complete in the second quarter and start up by mid-2017 as planned. About $5 billion of the combined $6 billion project is related to the cracker. Phillips 66 President Tim Taylor said the main push behind the delay is construction amid a tight craft labor squeeze.[469]
November 3, 2016: Fluor takes $154 million Hit on Delayed Chevron Phillips Petrochemical Expansion in Baytown
Fuelfix reported on November 3, 2016 that Fluor, which is building Chevron Phillips’ “U.S. Gulf Coast Petrochemicals Project” in a joint venture with Japan-based JGC, said it recorded a $154 million impairment charge for the project in the third quarter. “We are very disappointed in the construction progress on a fixed-price Gulf Coast project that led to a significant charge this quarter,” said David Seaton, Fluor chairman and CEO. Seaton confirmed Fluor will take a net loss on the entirety of the project. He cited weather delays, which were caused by Houston-area flooding in the spring, as well as problems with “piping performance” during the construction process. There was also one fatality in May when a Fluor contractor died after an on-site accident. Last month, Chevron Phillips acknowledged some minor delays caused by weather and additional retraining needed for some craft workers.[470]
November 2, 2016: Obama Says Army Corps is Weighing Whether to ‘Reroute’ Phillips 66 Funded Dakota Access Pipeline
The Washington Post reported on November 2, 2016 that President Obama said Tuesday that his administration was considering ways to “reroute” the Dakota Access Pipeline after a week of violent clashes between authorities and activists protesting the controversial project. “We’re monitoring this closely,” Obama said. “My view is that there is a way for us to accommodate sacred lands of Native Americans. And I think that right now the Army Corps is examining whether there are ways to reroute this pipeline. We’re going to let it play out for several more weeks and determine whether or not this can be resolved in a way that I think is properly attentive to the traditions of First Americans." Even as Obama raised the possibility of rerouting the pipeline, he seemed to suggest that it would go forward.
But many climate activists have called on Obama to halt the project altogether, the way he blocked construction of the Keystone XL pipeline last year between Canada and the U.S. Gulf Coast. Jamie Henn, a spokesman for the environmental group 350.org, said in an email Wednesday that it would be hypocritical for Obama to allow the pipeline to be completed. “There’s no reroute that doesn’t involve the same risks to water and climate,” Henn said. “The president must submit Dakota Access to the same climate test as Keystone XL, a test it will surely fail.”[471]
Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
October 31, 2016: Phillips 66 Wood River Refinery Pays Civil Penalty to Settle Wastewater Pollution Case
The St. Louis Post-Dispatch reported on October 31, 2016 that Phillips 66, ConocoPhillips and WRB Refining — the past and present operators of the Wood River Refinery have agreed to pay a civil penalty of $125,000 and install new wastewater control systems at the refinery after alleged releases of wastewater contaminants that exceeded the facility’s permitted levels. Pollutants that exceeded allowable levels for the facility included mercury, fecal coliform, ammonia and other byproducts. Courts records show the exceedances were documented in monthly reports submitted by the refinery to the Illinois EPA from 2011 to 2016. Phillips 66 issued a statement saying the settlement “acknowledges the improvements the refinery has already made to improve the refinery’s wastewater treatment performance, as well as outlines additional investments the refinery is committed to implement.”[472]
October 28, 2016: Garland Expects Permit "in Relatively Short Order" to Complete Dakota Access Pipeline
Yahoo reported on October 28, 2016 that Greg Garland expects a permit will be granted to build a controversial oil pipeline under the Missouri River near Native American land in North Dakota. "There's not that much left to be finished once we get the easement to go underneath the Missouri River," Garland told analysts on a conference call. "So I think that can be wrapped up in relatively short order." The U.S. Justice and Interior Departments along with the U.S. Army Corps of Engineers halted construction under the Missouri in September due to protests by Native American tribes who say the pipeline would disturb sacred land and pollute waterways supplying nearby homes. Construction is continuing on sections of the pipeline away from the Missouri River, Garland said. Phillips owns 25 percent of the project.[473]
- Learn More About Dakota Access Pipeline
October 28, 2016: Phillips 66 Quarterly Profit Plunges Prompting Cuts in 2016 Capital Expenditures
Reuters reported on October 28, 2016 that Phillips 66 reported a sharp fall in quarterly profit due to lower refining margins, and cut its full-year capital expenditure forecast to about $3 billion. The company's consolidated earnings fell to $511 million, or 96 cents per share, in the third quarter, from $1.58 billion, or $2.90 per share, a year earlier.Adjusted earnings fell to $1.05 per share from $3.02 per share.[474]
Still, Phillips 66 keeps profiting, while many oil and gas producers and services companies continue to report quarterly losses. “This year we are delivering record operational excellence results, managing costs, executing our major projects and maintaining disciplined capital allocation,” Phillips 66 Chairman and Chief Executive Greg Garland said in a prepared statement. Garland said its capital spending for the full year is decreased down to $3 billion from an initial budget of $3.9 billion. The 2017 capital budget is projected to come in below $3 billion.[475]
Refining's third-quarter earnings were $177 million, compared with $149 million in the second quarter of 2016. Refining's earnings in the third quarter of 2016 included a benefit of $43 million related to a legal award. Refining's second-quarter earnings included a net charge of $3 million related to a logistics commitment that was partially offset by a favorable U.K. tax settlement. Refining's adjusted earnings were $134 million in the third quarter, compared with $152 million in the second quarter of 2016. The decrease in adjusted earnings was largely driven by higher planned turnaround expenses, partially offset by lower routine maintenance costs. Realized margins were $7.23 per barrel, in line with the prior quarter's $7.13 per barrel. Phillips 66’s worldwide crude utilization rate was 97 percent and its clean product yield was 84 percent in the third quarter. Pretax turnaround costs for the third quarter were $117 million.[476]
October 26, 2016: Analyst Says Phillips May Bid on ExxonMobile Refinery in Billings
Toronto Metro reported on October 26, 2016 that Calgary oilsands analyst Michael Dunn of GMP FirstEnergy said Cenovus may be working with American refining partner Phillips 66 to bid on a Billings, Montana, refinery owned by Imperial's parent company, U.S.-based ExxonMobil.[477] The ExxonMobile refinery is one of the highest quality plants in the Rocky Mountains, with a fluidized coking unit for refining heavy oil. The plant primarily processes crude either imported from Canada or transported from nearby Wyoming. Industry sources quoted by Reuters said that major refiners, including Chevron Corp. and Exxon Mobil, are seeking to unload their smaller refineries that aren’t associated with petrochemical manufacturing, which can be more profitable. The Billings ExxonMobil refinery is the company’s smallest and it isn't associated with petrochemical manufacturing. Rumors that ExxonMobil is interested in selling its Billings refinery have surfaced in industry publications in past years, but so far have proven unfounded. Reuters speculated that the 60,000-barrel-per day plant would be worth between $500 million and $700 million.[478]
Greg Garland says that Phillips is not in a hunt for anyone that are for sale today. "So I think historical answer is still a good answer for us," said Garland. "Yes having said that if we could find the right assets for the right value certainly we would look at it, but none of the ones that are on the market today we are not in a hunt for those."[479]
October 22, 2016: Eighty-three Arrested at Protest Against Phillips 66 Funded Dakota Access Pipeline
UPI reported on October 22, 2016 that police in North Dakota arrested 83 protesters after violent clashes at the construction site of the Dakota Access pipeline. The protest happened in rural Mandan, N.D., where workers are installing the 1,172-mile oil pipeline that will run from the oil fields in North Dakota south as far as Illinois. A group of protesters walked some three miles off the nearest road with a large all-terrain vehicle, slashed its tires and fastened themselves to the machine, according to the Bismarck Tribune. One individual chained herself to the steering wheel. Another man put his arm through a hole in the vehicle's door, than put his hand in a bucket of dried cement.
When police arrived on scene, a group of 300 or so protesters, Native Americans who view the construction as a violation of their sovereignty along with environmentalists, refused to leave. Police formed a line near the protesters and some tried to breach the line; officers responded with the use of pepper spray. Two officers were injured, though not seriously, in the confrontation. Police said they used the least amount of force possible to remove the protesters from private property. "We want to use the most nonlethal method possible," Morton County Sheriff's Department Rob Keller told the Bismarck Tribune. It took police about five hours to clear the scene of protesters so work in the area could resume. WDAZ-TV reported protesters were mostly charge with a combination of assault on a peace officer, reckless endangerment, criminal trespass, engaging in a riot, resisting arrest and fleeing an officer on foot.[480]
Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
October 21, 2016: Phillips 66 Disputes Coast Guard Finding They’re Responsible for Oil Spill at Rodeo Refinery Marine Terminal
KQED reported on October 21, 2016 that Phillips 66 is rejecting a finding by the Coast Guard that a marine terminal at its Rodeo facility played a role in an oil spill in San Pablo Bay last month. After the oil sheen was discovered, the refinery told the operators of the Yamuna Spirit to stop transfer operations, according to company spokesman Paul Adler. “Phillips 66 subsequently tested the refinery’s dock transfer piping,” Adler said. “The tests were observed by several federal, state and local government agencies and there was no evidence of leakage from Phillips 66 piping and connections.” Phillips 66 shut down its marine terminal at the beginning of the investigation. A week later, it reopened the facility and allowed the Yamuna Spirit to depart.
Local environmentalists say there should have been better oil transfer procedures in place at the refinery. “Whether or not the oil spill that took place during oil transfer operations at Phillips 66 was the fault of refinery staff or the shipping company hired to transport its oil is irrelevant,” said Ian Wren, a staff scientist at Baykeeper, an organization that works to stop pollution in San Francisco Bay. “Phillips 66 should be expected to take full responsibility for this spill and any others that take place under its authority."[481]
October 20, 2016: US Coast Guard Says Phillips 66 Responsible for Oil Sheens on San Pablo Bay from Rodeo Refinery Oil Terminal
The East Bay Times reported on October 20, 2016 that the mysterious oil sheens that appeared on San Pablo Bay on September 20, 2016 were connected to a crude oil tanker or the Phillips 66 refinery, the U.S. Coast Guard announced. The spill left two sheens on the bay, including one just over a mile long by 40 yards wide on the water in the northern San Pablo Bay area, according to the U.S. Coast Guard, the lead agency investigating the incident. A second sheen was later identified during a Coast Guard overflight near the Phillips 66 Rodeo refinery marine terminal. Authorities were unable to determine if the sheen found in the bay originated from the Yumuna Spirit of the Phillips 66 facility. The U.S. Coast Guard said the vessel and the facility are responsible for recovering federal related response costs. The Coast Guard could not determine what caused the odor that sent dozens of people to hospitals in Vallejo with complaints of headaches, nausea and dizziness on September 20, 2016.[482]
KQED reported on October 18, 2016 that officials have revealed a clue that could help determine what caused the oil spill in San Pablo Bay a month ago and a sickening odor that sent dozens of people to the hospital in Vallejo around the same time. Results of tests taken of the substance found in the water in late September show that it was crude oil from the Middle East, according to an official with California’s lead agency for responding to oil spills. Randy Sawyer, chief environmental health and hazardous materials officer for Contra Costa County Health Services, says the crude must have come from an oil tanker at a marine terminal in Rodeo. “Based on the analysis and where the sheen was located, the oil sheen originated from the ship while it was unloading to Phillips 66,” Sawyer said. I’s unclear how the oil might have leaked from the vessel. “I know that Phillips did check their piping and there were no leaks,” Sawyer said. “There may have been a portion of the piping (that was) not tested.”
Phillips 66 declined to comment on the investigation and activity of the Yamuna Spirit at its marine terminal. “Phillips 66 generally does not comment on activity as it relates to our crude supply and transportation arrangements,” said Aimee Lohr, a refinery spokeswoman.
When the investigation is concluded, local environmentalists say whoever is responsible should be held accountable. “The perpetrators need to face stiff penalties for this absolutely unacceptable oil spill,” said Patrick Sullivan, an Oakland-based spokesman for the Center for Biological Diversity. “But even the steepest fines won’t undo the damage this oil has done to the bay,” Sullivan said. “That’s why we’ve got to move away from shipping dirty crude through California’s fragile coastal ecosystems.”[483]
- See also Health Official Says Phillips 66 Rodeo Refinery Needs to Notify Local Agencies Faster Next Time it Learns of an Oil Spill Near its Facility September 28, 2016
- See also Officials Investigate Whether Phillips 66's Rodeo Refinery Is Tied to San Pablo Bay Oil Spill September 16, 2016
October 20, 2016: Phillips 66 Replaces Crude Distillation Tower at Ferndale Refinery
The Bellingham Herald reported on October 20, 2016 that Phillips 66 replacing a crude distillation tower that was installed at the Ferndale Refinery in late 1954. The 16-story tower was recently delivered to the refinery and should be in operation sometime in 2017. The tower takes heated crude oil and creates different components as it is recaptured at different temperatures. Those components include butane, gasoline, kerosene and diesel. Up to 120 contract workers will be on the project during installation and it will take about 70,000 contractor hours to complete.[484]
October 20, 2016: Phillips 66 Appeals Santa Maria Rail Project to San Luis Obispo County Supervisors
The San Luis Obispo Tribune reported on October 20, 2016 that Phillips 66. has appealed San Luis Obispo County Planning Commission’s rejection of its oil-by-rail plan to the county Board of Supervisors, setting the stage for lengthy and passionate hearings over a project that has drawn statewide attention. Phillips 66, in its appeal filed Wednesday afternoon, also is asking county supervisors to set aside the issue while it seeks an order from San Luis Obispo Superior Court that would direct the county planning department to correct what Phillips 66 says are misapplications of county land-use rules. The petition, filed Wednesday in Superior Court, also asks the court to direct the Planning Commission to set aside its findings for denial and reconsider Phillips 66’s application. A case management conference is set for Dec. 5. The Planning Commission voted 3-2 on Oct. 5 to reject the project, with Commissioners Don Campbell and Jim Harrison dissenting. Commissioner Jim Irving joined Commissioners Eric Meyer and Ken Topping on Wednesday to deny the plan.
In the meantime, environmental groups are gearing up for another fight. One such group, 350 Silicon Valley, is part of a statewide coalition of climate organizations focused on stopping the Phillips 66 project and plans to give county supervisors numerous reasons to reject the proposal, said Stew Plock, development manager for the group.[485]
October 18, 2016: Equipment Fire Called Arson on Phillips 66 Funded Dakota Access Pipeline
UPI reported on October 18, 2016 that authorities said arson is the likely cause of an Iowa fire that caused about $2 million in damage to construction equipment on Dakota Access oil pipeline, funded in part by Phillips 66. A preliminary investigation that included the FBI and the Iowa Fire Marshal found that the fires were intentionally set. It was at the same location that equipment was damaged in an Aug. 1 fire, which police suspect was started by vandals. Dakota Access LLC, the company constructing the controversial, 1,172-mile pipeline across four states, offered a $100,000 reward for information leading to a conviction in Saturday's incident.
A protest against the pipeline in North Dakota turned violent last month, and several of the approximately 800 demonstrators said they were attacked with mace or bitten by guard dogs. The rally was organized after it was noted the pipeline traverses Native American graves and sacred sites.[486]
Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.
October 17, 2016: Phillips 66 Donates $600,000 to Ponca City Public Schools for Spatial Temporal Math
Ponca Post reported on October 17, 2016 that the Ponca City Public School district received a grant in excess of $600,000 from Phillips 66 to purchase ST (Spatial Temporal) Math licenses for all students in prekindergarten through 7th grade. ST Math is a game-based software designed to help students and enhance student comprehension and proficiency through visual learning. Students are able to learn at their own pace and to incorporate problem solving into their math lessons. ST Math utilizes a game concept that is interactive and has graphic animations that according to Mind Research, “visually represents mathematical concepts to improve conceptual understanding and problem-solving skills.”
The grant also included 3D printers for schools, iPads for the pre-K center, professional development for employees, and other supporting hardware totaling over $185,000. “Ponca City is the only school district in Oklahoma fortunate enough to have ST Math,” said Dr. Pennington. “We appreciate Phillips 66 bringing the program to us and committing more than $450,000 towards the program and supporting technology. Additionally, Phillips 66 has agreed to help pay the license renewal fee for the next three years if needed. Our teachers and students will have access to a tool that we know will increase students’ math skills and make learning fun.”
Tim Seidel, Diane Anderson (PCR Community Relations), Dr. Pennington, and Barbara Cusick (Ponca City Schools Director of Curriculum) and Teri Vogele, Associate Director of Curriculum visited students at Lincoln Elementary and West Middle to view first-hand how the program was being received and how it is helping students be more engaged and teachers to be able to teach math at several different levels. “We are excited to bring our Ponca City teachers this new tool and program to teach our students math,” said Tim Seidel. “I believe that through the application of ST MATH, we will identify opportunities and provide immediate benefits that will help students on an individual basis. Moreover, it will give teachers and students more flexibility and allow students to advance their math skills at an accelerated rate. Through this program, we hope to instill a love of math and create tomorrow’s problem solvers.”[487]
October 16, 2016: Ponca Tribe Members Protest at Phillips 66 Ponca Refinery
The Osage Nation Supports the Standing Rock Sioux. The Osage Nation is providing emergency supplies to the protesters at Standing Rock and has issued a proclamation supporting Standing Rock opposition to the Dakota Access Pipeline. Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners. Photo: Woolaroc
The Ponca City News reported in a front page story that dozens of members of the Ponca Tribe protested at Phillips 66's Ponca Refinery carrying signs decrying the pollution of water and air, a multitude of earthquakes and other negative results attributed to fracking. Tribal members also protested against oil pipelines across waterways, sacred lands and other tribal lands like the Phillips 66 funded Dakota Access Pipeline. Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners that has been the subject of months of protests by hundreds of members of the Standing Rock Sioux and supported by over 200 Indigenous Nations.[488]
- See also Osage Nation Sends Support to Standing Rock Sioux Protesting Phillips 66 Funded Dakota Access Pipeline September 2, 2016
October 13, 2016: United States Senators Call for a Halt to Phillips 66 Funded Dakota Access Pipeline
Senators Bernie Sanders, Patrick Leahy, Dianne Feinstein, Ben Cardin, and Ed Markey sent a letter to President Barack Obama this week asking him to direct the US Army Corps of Engineers to require a full environmental impact statement for the Lake Oahe crossing of the Dakota Access Pipeline, funded in part by Phillips 66. The senators added that "the project's current permits should be suspended and all construction stopped until a complete environmental and cultural review has been completed for the entire project."
Protests over the 1,172-mile pipeline erupted again this week after Energy Transfer Partners, the company behind the project, resumed construction Monday morning. The pipeline, which would run from North Dakota to Illinois and cost $3.78 billion, has drawn criticism over its potential impact on the environment and the damage it could inflict to sacred grounds and water sources of the Standing Rock Sioux tribe. In late July, the tribe filed a lawsuit against the US Army Corps of Engineers, alleging that the agency failed to properly consult the tribes before approving the pipeline. On Sunday, a federal appeals court denied the tribe's request to halt construction on the pipeline. The Obama administration repeated its request for Energy Transfer Partners to voluntarily suspend construction, but the company has disregarded that request.[489]
“In light of the decision of the Court of Appeals for the D.C. Circuit to reject the Standing Rock Sioux Tribe's request for a temporary halt to construction, the project’s current permits should be suspended and all construction stopped until a complete environmental and cultural review has been completed for the entire project,” the senators wrote. “If there is one profound lesson that indigenous people have taught us, it is that all of us as human beings are part of nature. We will not survive if we continue to destroy nature.”[490]
Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
October 13, 2016: Phillips 66 Donates $250,000 to Bartlesville Girls and Boys Club
The Bartlesville Examiner Enterprise reported on October 13, 2016 that Phillips 66 is making a $250,000 donation to the Bartlesville Girls and Boys Club to help build the new C.J. “Pete” Silas Boys & Girls Club, which will replace the aging structure. The club plans to begin construction this fall with hopes of startings operations in the 2017-2018 school year. The state of the art facility will include a dedicated teen center, learning centers, gymnasium, technology and STEM lab, arts and music spaces, outdoor sporting courts, and an expanded kitchen to better accommodate the nutrition program. The Cal Ripken, Sr. Foundation will partner with the Club construct the playing field. “It's giving back to the community, and the Boys and Girls Club is one of the great institutions and organizations (in Bartlesville),” said Phillips 66 CEO Greg Garland. “When you think back to Pete Silas, the former chairman of Phillips Petroleum, he was a great guy that was loved in the industry and a great leader for the company during some difficult times. No one ever questioned his ethics or integrity, and he's known for that.”[491]
October 12, 2016: Phillips 66 Makes Multi-Million Dollar Investment in Bartlesville Research Center
Bartlesville Radio reported on October 12, 2016 that Phillips 66 joined Public Service Company and Dallas-based contractor, Brandt Companies as they broke ground on a new electrical substation at the Research Center. The substation is a multi-year, multi-million dollar investment in the Phillips Research Center.[492] According to Phillips 66 Vice President of Technology Merl Lindstrom, the new substation is part of a Infrastructure Upgrade Program following a study of the Phillips 66 Research Center to increase viability for continued use and growth long into the future. Phillips 66 Chairman/CEO Greg Garland said the new substation and infrastructure upgrades at the Research Center indicates the company’s continued presence in Bartlesville, from today through the future.[493]
October 10, 2016: Chevron Phillips' $6 Billion Houston Expansion at Baytown Nears Completion
The Houston Chronicle reported on October 10, 2016 that Chevron Phillips Chemical, a joint venture between Chevron and Phillips 66, is nearing completion of their $6 billion expansion at Baytown. The project involves a massive ethane cracker - on a plot the size of 44 football fields - that will separate a component of natural gas called ethane, which will provide the feedstock for some 1.5 million metric tons a year of ethylene, a common building block of plastics. The project adds to a petrochemical boom primarily along the Gulf Coast, where chemical and plastic makers can take advantage of cheap and ample natural gas, the feedstock for their products. The growing demand for plastics is mostly coming from Asia, primarily China, but also India and Indonesia, where rising incomes are fueling appetites for consumer goods, said Ron Corn, a Chevron Phillips senior vice president. Chevron Phillips also built what is called a low-profile flare to release fewer emissions more discreetly - as opposed to the typical tall flare that looks a ball of fire in the sky."[494]
October 5, 2016: San Luis Obispo County Planning Commission Votes to Deny Phillips 66 Santa Maria Rail Spur Project
KCBX reported on October 5, 2016 that the proposal by Phillips 66 to increase the number of trains bringing crude oil to its Santa Maria refinery will not move forward with a recommendation by the San Luis Obispo County Planning Commission with three out of five Commissioners voting to deny the request to build a rail spur at the facility. Mesa Refinery Watch Group Spokesperson Laurance Shinderman said that the issue is now likely headed to the San Luis Obispo County Board of Supervisors, but believes the recent vote helps set a tone for future debate. "When you have the planning staff saying no to it, and now the planning commissioners saying not to it...the sentiment seems to be leaning our way," said Shinderman.
Phillips 66 Spokesperson Dennis Nuss sent a statement to KCBX via email: "We presented a strong proposal, and will review the concerns raised today and consider our options, including the right to appeal."[495]
September 28, 2016: Archie Dunham Says that He Disagrees with Splitting Off Phillips 66 from ConocoPhillips
David Hunn wrote in the Houston Chronicle on September 28, 2016 that sixteen years ago, on his way to a black-tie fundraiser in Oklahoma City, Archie Dunham, then chief executive of the Houston oil company Conoco, stepped out of hotel elevator just as Jim Mulva, his counterpart at Phillips Petroleum of Oklahoma, emerged from another nearby. "Low prices and rising costs were driving a wave of mergers in the industry, including the blockbuster combination of Exxon and Mobil, and leaving smaller companies like Conoco and Phillips vulnerable to takeover," writes Hunn. "Dunham didn't like the idea of getting gobbled by a major oil company; he took the opportunity to broach the idea of a merger - a merger of equals - with Mulva." Big oil companies had been circling Conoco for some time when Dunham found himself in a hotel lobby with Mulva, the Phillips CEO. Dunham, in a recent interview, said Phillips seemed like a good partner to him. They had strengths in different parts of the world that complemented each other, he said, but they also came from essentially the same place. "We felt like our cultures, values, were very similar," Dunham said.
After running into each other at the Renaissance Waterford on that evening in 2000, Dunham and Mulva quickly parted, wary of being spotted together and tipping anyone off to their discussion. But they soon met again, secretly, in Colorado. Alone in a room in the Broadmoor Hotel in Colorado Springs, they talked for four hours about business, family and values. A few months later, on a stormy day in November 2001, the two men met in Tulsa, Okla. to announce the merger that would create world's sixth biggest integrated oil company. The new firm would have $50 billion in revenues, $60 billion in assets, 8.7 billion barrels in oil reserves and 58,000 employees worldwide. Dunham persuaded Mulva to name the new company ConocoPhillips, and keep it headquartered in Houston. The city's easy access to international flights made the decision practical. "Besides, I was a Houstonian," Dunham said. "I wanted Houston to have the headquarters." In exchange, Dunham took the chairman slot; Mulva became chief executive.
Dunham retired in 2004. In 2012, the company split again, spinning off its refining, retail, and marketing operations to form Phillips 66, while ConocoPhillips focused on oil exploration and production. Mulva, still CEO then, said that two independent companies focused on their respective industries would be more competitive. He insisted both were big enough to compete and generated enough cash to invest in their futures. Dunham stayed out of the fray, he said recently. He wrote letters to the board, arguing that an integrated company can use cash from its refining business to fund oil exploration - but he never sent them. According to Hunn, the separation is a decision with which Dunham disagrees, even now.[496]
September 28, 2016: Health Official Says Phillips 66 Rodeo Refinery Needs to Notify Local Agencies Faster Next Time it Learns of an Oil Spill Near its Facility
KQED News reported on September 28, 2016 that a top Bay Area health official said Phillips 66's Rodeo Refinery needs to notify local agencies faster next time it learns of an oil spill near its facility. Randy Sawyer, Contra Costa County’s chief environmental health and hazardous materials officer, said Phillips 66 took 10 hours to tell his agency about the spill, a delay that could have impacted the investigation. “Hours later the sheen was gone and there was no evidence of it at that location,” Sawyer said. “So we lost some valuable time in trying to determine where the oil came from.” Phillips 66 has not responded to requests for comment on its delay in contacting the county.
The refinery told the California State Warning Center shortly before 9 a.m., according to Shawn Boyd, a spokesman for the Governor’s Office of Emergency Services. The company told Contra Costa’s hazardous materials program at 11 a.m., Sawyer said. The lack of answers frustrates at least one Vallejo city official. Councilwoman Katy Miessner said the possibility that an oil spill may have sickened some of the city’s residents is cause for concern. “I think this is something we’re going to have to address,” Miessner said. “Personally, I had no idea that we were vulnerable to the refineries across the bay.”[497]
The Times Herald reported on September 27, 2016 that the City of Vallejo has released an official statement about the pungent and mysterious odor that hung heavy in Vallejo last week. Residents reported an “unknown odor” primarily centered in South Vallejo that smelled of gasoline or natural gas. After dozens of patients began arriving at local hospitals in connection with breathing problems after inhaling the odor, the city issued a shelter-in-place order and advised residents to avoid being outside if possible. After the smell was noticed, a one-mile-by-40-foot sheen in the waterways was discovered near the the Phillips 66 Rodeo Refinery Marine Terminal. The odor in Vallejo gradually dissipated throughout the night. Though the shelter-in-place warning in Vallejo was lifted at 6 a.m. Wednesday, some residents took to social media to report still being able to detect something in the air. As the second day progressed, an additional sheen was eventually detected in the surrounding waters and city officials were informed about a leak that was found across the waterway at the Phillips 66 refinery.
“To date, no entity has shared any information with city officials about a possible cause of the unknown odor,” according to the city’s statement. One Vallejo resident, Liz Harkness, is not satisfied with the city’s answers about the incident and has started a petition to the “decision makers” of Vallejo and Phillips 66 Refinery in Rodeo to release more definitive answers. “Is the air truly safe?” Harkness wrote in the petition. “People are still feeling ill today! Just what is the sheen made of? Is it effecting wildlife, the bay and rivers? How much is moving upstream with the tides? Are the wetlands in danger? Especially those along Highway 37 that were just restored. Too many questions. No answers in this age of science? I feel we’re being left out. They know more than they let on, and a lot of us in the city know it.”[498]
- See also Officials Investigate Whether Phillips 66's Rodeo Refinery Is Tied to San Pablo Bay Oil Spill September 16, 2016
September 23, 2016: Future Operator of Phillips Funded Dakota Access Pipeline Tops U.S. Crude Spill Charts
Reuters reported on September 23, 2016 that Sunoco Logistics, the future operator of Dakota Access Pipeline, partially owned by Phillips 66 and delayed this month after Native American protests in North Dakota, spills crude more often than any of its competitors with more than 200 leaks since 2010, according to a Reuters analysis of government data. Reuters analyzed data that companies are obliged to disclose to the Pipeline and Hazardous Materials Safety Administration (PHMSA) when they suffer spills and found that Sunoco leaked crude from onshore pipelines at least 203 times over the last six years. PHMSA data became more detailed in 2010. In its examination, Reuters tallied leaks in the past six years along dedicated onshore crude oil lines and excluded systems that carry natural gas and refined products. The Sunoco data include two of its pipeline units, the West Texas Gulf and Mid-Valley Pipeline. That made it the operator with the highest number of crude leak incidents, ahead of at least 190 recorded by Enterprise Products Partners and 167 by Plains All American Pipeline, according to the spill data reported to PHMSA, which is part of the U.S. Department of Transportation.
Sunoco's spill rate shows protestors may have reason to be concerned about potential leaks. The main option that was considered for routing the line away from the Standing Rock Sioux Tribe reservation was previously discarded because it would involve crossing more water-sensitive areas north of the capital Bismarck, according to the project's environmental assessment.
The company has made previous efforts to improve safety, a former Sunoco employee who declined to be identified said. It overhauled safety culture after a spill in 2000, and did so again another in 2005 that dumped some 6,000 barrels of crude into the Kentucky River from its Mid-Valley Pipeline. Sunoco acknowledged the data and told Reuters it had taken measures to reduce its spill rate. "Since the current leadership team took over in 2012, Sunoco Pipeline has enhanced and improved our integrity management program," Sunoco spokesman Jeffrey Shields told Reuters by email. This significantly cut the amount of barrels lost during incidents, he said.[499]
Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.
- Learn More About Dakota Access Pipeline
September 21, 2016: Officials Investigate Whether Phillips 66's Rodeo Refinery Is Tied to San Pablo Bay Oil Spill
KQED reported on September 21, 2016 that the U.S. Coast Guard and state officials are investigating an oil spill in San Pablo Bay that may have produced an odor that sickened dozens of Vallejo residents Tuesday night. It’s possible the Phillips 66 Refinery in Rodeo could be connected to the incident. Vallejo city officials issued a shelter-in-place order after hundreds of residents complained of a gas-like odor, which sent dozens to the hospital. “We had over 800 calls to our dispatch center of complaints of the smell, questions about what the smell is,” Vallejo Fire Department spokesman Kevin Brown said. “Several dozen of them were medical complaints, so we took several dozen patients into local hospitals.” The U.S. Coast Guard, the California Office of Spill Prevention and Response and the Bay Area Air Quality Management District are investigating.
KQED Science Editor Craig Miller, who lives in Vallejo, described the odor as it first began wafting through the area. “The air up here first starting turning acrid around 7:00 or 7:30 last evening and gradually became more intense. I would describe the smell as some kind of heavy petroleum distill,” Miller said. “It’s similar to the smell you would get driving by an oil tank farm except much, much more intense to the point where the city finally issued a shelter in place alert around 8:30.”
A light oily sheen was discovered shortly after 8 a.m. today at the Phillips 66 Refinery Marine Terminal in Rodeo, company spokesman Paul Adler wrote in an email to KQED. "At the time, a tanker was berthed at the marine terminal," wrote Adler. "Our internal response team immediately responded to the incident and we notified the National Response Center (NRC) and the United States Coast Guard. Operations at the marine terminal have been temporarily shut down and we are working closely with the Coast Guard and other agencies regarding the response." The email indicates the exact amount of oil released is not known, and the cause of the incident is under investigation."[500]
According to the Napa Valley Register a Coast Guard helicopter crew from Air Station San Francisco Wednesday morning discovered a sheen just over a mile long and 40 yards wide in northern San Pablo Bay, and the Coast Guard and California Office of Spill Prevention and Response's pollution investigators aboard a small boat took samples to determine the source. A second sheen was identified Wednesday afternoon during a Coast Guard flight near the P