Flying J ‘winding down’ Big West refinery operations

| 1/29/2009

The Flying J on Wednesday officially termed its shutdown of its Big West refinery in California a “suspension,” also indicating the company is preparing to shut down permanently the 70,000-barrel-a-day plant.

In a statement released Wednesday, a Big West official said the company is preparing to talk to the local union about the future of its Bakersfield, CA, refinery. Big West is a subsidiary of the Flying J, which filed for chapter 11 bankruptcy in December.

“For now, we will be winding down refining operations at the facility as we continue to explore opportunities,” said Fred Greener, Big West executive vice president. “We hope that this suspension will be short-lived, and are working very hard to find a solution that will allow resumption of operations. However, at this time, we cannot predict when that might occur.”

Big West confirmed it has contacted United Steelworkers Local 219 to begin discussions for the future of its contract with union employees at the Bakersfield refinery.

“We have reached out to the United Steelworkers, Local 219, to begin discussions regarding the future of the plant and its employees,” Greener said. “We remain committed to doing everything within our power to achieve positive outcomes for our company, our work force and for the Bakersfield community. We certainly wish the circumstances were different.”

As recently as last year, Big West was pursuing a major expansion of the Bakersfield plant that included plans to add 100 additional refinery workers. The plant, which has operated since 1932, has been being owned by Reserve Oil and gas, Getty, Texaco and Shell before the Flying J acquired it in 2005.

Big West’s announcement will reportedly mean job cuts for the 140 union workers who work at the Bakersfield plant. Kevin Cable, committee chairman for the United Steelworkers, told the Los Angeles Times that the plant employs 100 contract workers.

According to a statement filed by former CEO Adams, Flying J had 2007 sales exceeding $16.2 billion. The Flying J Group operates more than 200 travel plazas in 41 states and six Canadian provinces and employs about 16,000 workers.

Through other subsidiaries, Flying J also invests in more than 200 oil wells and develops land.

Big West refineries in Bakersfield and North Sale Lake City, UT, operate to create about 100,000 barrels of crude oil per day, according to court documents. The company’s Web site, available here, says the Bakersfield plant specifically produces about 70,000 barrels per day.

Another Flying J subsidiary, Longhorn Pipeline, can move 80,000 barrels of diesel and gasoline each day from Houston to El Paso, where the company owns a terminal capable of storing more than a million barrels.

According to the Energy Information Administration, the Big West plant in Bakersfield has total operating capacity of 68,000 barrels of oil per day, including 23,200 barrels of high-grade/jet fuel and 25 barrels of hydrogen.

The average breakdown of products made from U.S. processed crude oil includes 10.5 gallons of diesel and 19.5 gallons of regular fuel per 42-gallon barrel, the Energy Information Administration’s Web site states.

– By Charlie Morasch, staff writer