Shutting Tesoro Refinery Will Hurt Hawaii’s Residents

Closing Tesoro’s Kapolei refinery will hurt the wallets of Hawaii’s residents, give the state’s economy a black eye, threaten our national security and make the state dependent upon renewable sources that will take years to develop before they are economically viable.

Tesoro announced in January it had not found a buyer for the Kapolei refinery and would turn it into a terminal to import fuel. The refinery plans to lay off about 210 employees on or around May 1. 

Tell the Governor and your elected officials you don’t want the Tesoro refinery closed. Send an Email to savetherefinery@gmail.com.

The Kapolei refinery processes up to 94,000 barrels per day of crude oil to make gasoline, diesel, jet fuel, ship fuel, asphalt and fuel oil for electrical generation. The Tesoro and Chevron refineries in Hawaii enable the state to mostly be self-sufficient in energy. Imported fuel is relied upon to a lesser degree. This will change when the refinery is shut down and the state becomes dependent on foreign sources of fuel.

Higher Costs, Uncertain Supply

Being dependent on imports will make Hawaii vulnerable to major disruptions in the global oil market. One international oil consultant said that if there is a global crisis, Hawaii is more vulnerable than anywhere on the mainland.

These imports will likely come from Asia. One independent oil consultant told the media that the jet fuel Tesoro produced would be imported mostly from Asia and that would boost prices. 

Currently, Hawaii is self-sufficient in residual fuel, which is used as bunker fuel for powering ships and as fuel for the state’s electric power plants. If the state has to import this fuel it will be costly. It sells for about a $90 per ton premium (about $13 per barrel) over the rest of the world for shipment into Pacific Island ports. Imagine how this will affect electric prices.

Ultimately, the increased cost for imported fuel will lead to higher prices for all goods and services.

Local Economy Hurt

The United Steelworkers (USW) Local 591 represents the majority of workers at the Tesoro refinery. Union refinery jobs pay high wages and are known to have a multiplier effect on the local economy. Each of these family-supporting jobs is thought to support seven to 10 other jobs. This means that up to 2,100 other jobs could be lost if the Tesoro refinery closes, affecting those who work for Tesoro’s suppliers and for businesses that the workers and their families patronize.

Closing the refinery also means less tax revenue coming in to support local and state government and schools. Laid-off workers also will increase the burden on local, state, and federal budgets, and they also will pay fewer taxes.

National Security Interests

The Tesoro refinery supplies as much as 70 percent of the fuel needed for Hawaiian military bases. With North Korea acting up, our military needs to have a ready supply of fuel in case it is called to action. 

Do we really want our military to be dependent on fuel produced outside of the U.S.? Even if the fuel is obtained from the U.S. mainland there will be extra costs to ship it.

Renewable Energy

Renewable energy is important, but it could take decades in order to create a system that will capture, store and transmit this energy efficiently and at a reasonable cost.

Switching to LNG is not an immediate solution, and it does little or nothing to provide fuel for cars, trucks, ships, ferries and aircraft. The infrastructure to import large quantities of it is lacking, and Hawaiian Electric Company (HECO) will not be able to fully convert to LNG until 2019 or 2020. Meanwhile, HECO likely will request environmental waivers until its equipment can be modified.

Importing fuel also does not help the environment. Overseas refineries operate under fewer environmental regulations than U.S. facilities like the Kapolei refinery. Also, having more ships unload refined fuel increases the chances for an oil spill.

Does This Make Sense?

The Kapolei refinery was built 41 years ago in 1972 because imported fuel cost too much and there were supply problems.

Governor Abercrombie and other elected leaders need to ask themselves: Does it really make sense to let the Tesoro refinery shut down and throw 2,100 residents out of work in favor of high-priced fuel imports produced overseas and without a guarantee there will be no supply problems? 

Tell the Governor and your elected officials you don’t want the Tesoro refinery closed. Send an Email to savetherefinery@gmail.com.

Thanks for your support!