Flint Hills North Pole Refinery Shutting Amid ‘Enormous’ Costs

[FarCenter]

Flint Hills Resources LLC will begin to permanently halt operations in May at the North Pole refinery, Alaska’s largest by capacity, citing poor economics and “enormous” costs for cleaning up soil and groundwater.

The subsidiary of Koch Industries Inc. will take the extraction unit at the refinery near Fairbanks out of service on May 1, ending gasoline production, and shut the No. 2 crude unit by June 1, ceasing the output of jet fuel and all other refined products, the Wichita, Kansas-based company said in an e-mailed statement yesterday. It will continue to sell fuels at terminals in Anchorage and Fairbanks.

The announcement follows the shutdown of the refinery’s No. 1 crude unit in early 2012 because of what Flint Hills described at the time as “challenging economics” and rising crude prices. Cleaning contaminated soil and groundwater has further compounded costs, the company said.

“Our company has spent an enormous amount of money and resources addressing soil and groundwater contamination,” Mike Brose, manager of the North Pole refinery, said in the company’s statement. “With the already extremely difficult refining market conditions, the added burden of excessive costs and uncertainties over future cleanup responsibilities make continued refining operations impossible.”

Spot Alaska North Slope crude prices have climbed 9.2 percent in the past three years as oil production in the state declines. Output has dropped every year since 2002 as the yield from existing wells shrinks

http://www.bloomberg.com/news/2014-02-05/flint-hills-north-pole-refinery-shutting-amid-enormous-costs.html

[Xipe Totec]

1. You know, if you don't contaminate water or soil, the cleanup cost is zero. nt

[WhiteTara]

2. This might be the planet's only hope

that the cost of destroying the earth is too high, so they just quit.

[lumberjack_jeff]

3. I worked there one winter when it was owned by Mapco.

It wasn't the cold that sucked, it was the 2-hours of daylight.

[FarCenter]

5. Mapco seems to have owned the refinery from 1980 to 1998.

Earth Resources before Mapco. After Mapco, the Williams Companies and Flint Hills from 2004.

60% of output is for aviation. Maybe operations at Eielson don't need as much fuel anymore?

[Blue_In_AK]

4. Koch Bros. contend the contamination was caused by the previous owners

of the refinery. I don't know about that, but I do know that North Pole's groundwater is messed up. While I'm sorry people will lose their jobs and this closure will probably have ripple effects throughout Alaska's economy, I'm not sad at all to see the Kochs go. I wish they'd get their filthy noses out of the rest of Alaska's business, as well. They and ALEC are pulling the strings of a bunch of our legislators.