Engineering News

Marcus Hook small businesses cheer reuse of refineries by Delta, Braskem
July 17, 2012

It is with a serious leap of faith — if not a plentiful supply of antacids — that small business owners take the plunge into the terrifyingly unpredictable world of entrepreneurship.

But Mario Giambrone thought he was leaping into a pretty sure thing a little more than four years ago. He was opening Italiano's restaurant in Marcus Hook, a small town bursting with hungry lunch crowds. On one end was the Sunoco refinery, spread over 781 acres and employing nearly 600 people. On the other end, just across the northern border in Trainer, was another monument to oil's employment oomph — the 343-acre ConocoPhillips refinery, a job site for more than 400, not counting contractors who also needed to eat.

Lunch business was brisk at Italiano's. The dinner crowd was good too, helped by refinery workers who came in with their families. Giambrone was providing jobs to 14 locals.

"It was good," he said of business life in general. And then it wasn't.

Last year, the concussions hit a month apart: The refineries announced plans to close.

"We thought it was the end of the world," Giambrone recalled.

In the tight-margin world of small business, it sort of was.

"We lost 30 percent of our business," Giambrone said of the effect of the subsequent idling of both plants along the Delaware River.

But at lunchtime in Italiano's one day last week, spirits were once again like the pizza dough — rising. Takeout orders were also up and Giambrone was talking about hiring again.

Italiano's new life is attributable to new life at the hulking ConocoPhillips refinery just up the road, where workers started returning late last month to a soon-to-be repurposed plant built by Sinclair Oil in 1925. In an unprecedented undertaking by an airline, Delta Air Lines bought the site for $180 million in June to manufacture its own jet fuel under subsidiary Monroe Energy L.L.C. By doing so, the airline hopes to cut its fuel bill by $300 million a year.

That's quite all right with Giambrone as long as the appetites of the roughly 400 workers expected to be back at the plant when it resumes fuel production in September aren't cut, he said.

Last week, he and other small businesses owners in the town of just over one square mile — where entrepreneurial life has been especially harrowing since the refinery closings were first announced — were starting to feel optimistic.

We're ecstatic about all the business, all the new faces," Giambrone said standing at the cash register inside Italiano's Tuesday. "It's good stuff. Keeps everyone working around here, whether it's heating and air-conditioning [contractors], local mechanics."

Business operators were further juiced by Gov. Corbett's announcement Wednesday that the state would provide $15 million to support the acquisition of a chemical processing unit at Sunoco's Marcus Hook refinery by neighbor Braskem America Inc. It will be integrated into Braskem's polypropylene plastic plant, where 119 employees and contractors work. The state grant is contingent on Braskem investing at least $56 million at the site and creating at least 28 new full-time jobs, for a period of five years.

Understandably, the enthusiasm running through Marcus Hook's weathered commercial corridors is somewhat checked. There's no ignoring that the Sunoco refinery, which essentially forms the town's southern border, is in need of a new use.

At Marcus Hook Pharmacy, which last week on a sidewalk sign was touting the "best milk price in town" at $3.85/gallon, Tim Arnold is in charge of business development. Whether the refineries that sandwich Marcus Hook are brimming with employees is of no direct impact on the 29-year-old drugstore, Arnold said, explaining that most refinery workers traditionally have had mail-order prescription plans.

The benefit comes from the refineries doing business with other companies in town — from eateries to hardware stores — that employ local residents who do get prescriptions filled at his place on East Tenth Street, Arnold said.

"Anything that keeps Marcus Hook vibrant and alive is valuable for our business," he said.

The "kind of outside-the-box thinking" that led to Delta reopening the ConocoPhillips refinery, Arnold added, "gives us some hope for the Sunoco refinery."

A study by IHS Consulting, commissioned by the Delaware County Council and made public in late June, found that the complex's best chance for a second life is as a multipurpose energy-processing facility fueled by natural gas from the bountiful Marcellus Shale. Sunoco has been unable to find a buyer to operate the 110-year-old plant as a refinery since shutting it down last year.

Marcus Hook Hardware has been around almost as long as the refinery has, opened 98 years ago by Julius Taback, grandfather of current owner Irv Beerson. He runs the classically crammed store on East Tenth Street with son Josh, a place that 50-year customer Eleanor Nealy, of Trainer, still refers to as "the John Wanamaker's of Marcus Hook because you could always get whatever you wanted here."

Last week, Irv Beerson would not go into specifics about the impact the shuttering of both refineries had on his business and its staff of five other than to say: "It slowed the whole community. You did what you had to do."

He brightened when asked about the impact the reopening of the ConocoPhillips plant has had on the store.

"They have opened accounts," he said. In the past, refinery purchases have been anything and everything, Beerson said, "from Gatorade to hand tools to nuts and bolts to weed killer to sampling jars."

Nealy had stopped by last week to pick up window shades she had ordered. While there, she expressed relief that the Beersons were able to survive the refinery closings and be around to see the revival of the ConocoPhillips facility.

"We were concerned," she said.

Across the street, Arnold stood among the pharmacy's stocked shelves and allowed himself to think of a similar rebirth at the Sunoco plant — and then stopped himself.

"We would love to have both of them up and running, but some is better than nothing," he said.

Source: The Inquirer - Philadelphia

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