Image by Yves Bernardi from Pixabay

The Chalmette refinery was hit by the pandemic and want to reopen with at least part of it making bio-fuel To do this they want the 80% tax break possible citing the retention of jobs, the Governor’s support and we want it.

The owners of the 105-year-old refinery in Chalmette say they need a big break on local taxes to lure investment in a new “green” energy project — and without it, they say, the future of the plant and its 516 employees is at risk. PBF Energy, the New Jersey-based corporate owner of the refinery, which bought it from ExxonMobil for $322 million six years ago, is seeking a deal through the controversial Industrial Tax Exemption Program that would exempt it from paying 80% of local property taxes if the new project becomes a reality. The ITEP incentive, which is estimated to cost local governments in Louisiana about $2 billion a year, has in recent years faced increasing opposition from across the political spectrum. A package of bills that proposed to phase it out advanced in April, although the bills ultimately didn’t pass.

Steven Krynski, the Chalmette refinery’s manager, said that they were severely hit by the pandemic and had to borrow heavily.

Steven Krynski, the Chalmette refinery’s manager, said operators like PBF were devastated by the pandemic and have had to borrow heavily from banks just to survive. He said that “every one (of PBF’s six U.S. refineries) is in jeopardy,” after the parent company took on $1.2 billion in debt over the past year. “We have taken a shellacking on COVID, and if we don’t have this project, we don’t have a refinery,” Krynski said of the proposed $550 million investment needed to partially convert the plant to renewable energy production.

The plan is to used a disused hydrocracker unit to make bio-fuel, a part of the climate initiative being pushed by the Governor.

PBF said that it needs outside investment to go ahead with the conversion of a disused hydrocracker unit that used to make distillates and gasoline until it was put out of service more than a decade ago. The company argues that the investment would allow that unit to turn soybean oil and other feedstock into biodiesel fuel at a much cheaper rate than rival refineries. On Thursday, Gov. John Bel Edwards and local Chalmette officials pushed for the project. “This innovative project at Chalmette Refining is right in line with the goals set out by the Climate Initiatives Task Force I created last year,” Edwards said in a statement released by Louisiana Economic Development, the state economic agency. “With this major capital investment in a next-generation energy source and the creation of quality manufacturing jobs along the way, Louisiana would benefit from this project on many levels,” Edwards added.

The plant will hire 20 new workers with the possibility of going up to 40 or more. Construction would add 600 more jobs over the construction period. The Parish President is behind this request and yet, there will be no lessening of the emissions.

St. Bernard Parish President Guy McInnis and Meaghan McCormack, executive director of the parish’s economic development foundation, both also said the project was necessary to shore up the refinery and ensure jobs. The conversion, while adding “green fuel” capacity, would have little impact on the refinery’s emissions levels, as it would continue to have the capacity to process medium-sour grade crude oil from the Gulf of Mexico. Last year, the refinery emitted 114 tons of fine particulate matter and 6.4 tons of toxic volatile organic compounds, according to Louisiana Department of Environmental Quality data. Long-term exposure to fine particulate matter can result in respiratory issues and worsen heart disease. In 2019, the facility also added the equivalent of 1.6 million metric tons of carbon dioxide to the air, according to the EPA’s Greenhouse Gas Reporting Program. The plant is also working with the federal agency to address spikes in benzene releases recorded by fenceline monitors. The benzene releases ranked it No. 8 in such releases among U.S. refineries, according to a recent report by a host of environmental groups.

DEQ has a different way of determining harm that may well change with the EPA study and what the Tulane Environment Law Center has just submitted. The success will also depend on what the government does as bio-fuels have been in an up and down state. They are not a new technology, this is just a new site.

The success of the biodiesel project would be dependent on the future of federal incentives for that industry. In the past, biofuel incentives have been highly volatile as administrations’ priorities have shifted. President Joe Biden has promised to prioritize “next generation” biofuels in his climate change policy, though he recently scaled back on specific incentives offered to the industry. The local political leaders and refinery representatives were scheduled to put their case at a public meeting held at the La Bella Vita Reception House in Meraux on Thursday evening.

Another plane with another product only this one is to the south of us.

Chalmette Refinery wants Tax Relief for Green Biofuel