Local Ripples
by Leah Hadfield
The refinery came out of nowhere. My photographer was driving and I looked out the window at the grasslands and forests along the road. Suddenly, Whatcom County’s British Petroleum Cherry Point Refinery came into view. It loomed above us and columns of steam poured from the stacks. Metal dominated the horizon and asphalt conquered the earth. We drove along the fence looking at the framework of industry, turned left though the brick entryway and parked outside the administrative building.
The BP refinery was built in 1969 but remains one of the newest oil refining facilities in North America, said Keith Willnauer, Whatcom County assessor.
More than 90 percent of the refinery’s crude oil comes from the Alaskan North Slope. The refinery is specially designed to process Alaskan North Slope crude, said Mike Torpey, an engineer at the refinery. The crude is processed into gasoline, diesel, jet fuel and propane. Every four days an 800,000-barrel tanker arrives from the Prudhoe Bay oil field in Alaska.
In an effort to balance the nation’s energy supply with its demand, President George W. Bush commissioned a group of cabinet members to create a National Energy Policy. Released in May 2001, the policy makes it easier for refineries to increase capacity and efficiency while expanding oil exploration and production. Whatcom County’s economy is dependent on the oil industry’s ability to continue production and provide jobs for the approximately 1,300 permanent and contract-based employees of the area’s two refineries — BP Cherry Point and ConocoPhillips.
Whatcom County Executive Pete Kremen said if the refineries in Whatcom County shut down it would have a severe effect on the local economy.
"Between the number of jobs lost and the elimination of the overall payroll produced by the two facilities (it) would have a significant adverse impact to our local economy," he said.
Kremen said the facilities produce revenues through taxes that fund road building, public schools and other county projects.
For example, the Blaine School District receives $1.8 million in tax money from the BP Cherry Point Refinery annually, Willnauer said.
"We’re a major player for the economy," said George Fletcher, a senior laboratory technician at BP Cherry Point. "We have 600 employees and a number of contractors. The impact is just tremendous."
BP Cherry Point’s government and public affairs manager Mike Abendhoff said the jobs provided by the refinery pay well, offer good benefits and are some of the most sought after jobs in the county. The refineries contribute to the local tax base and the money spent by employees supports local businesses, he said.
"The economic ripples of (the refineries’) ability to expand and grow would be significant," Abendhoff said.
According to the Bush administration’s policy, refineries have had trouble getting money through investments to improve efficiency due to the numerous environmental regulations and required permits. The policy recommends expediting the permitting process to make it easier for refineries to expand and meet the nation’s oil demand.
Abendhoff said the required permits and the poor national economy limit the BP Cherry Point Refinery’s ability to expand production. He said, however, the refinery has been running near maximum production at 220,000 barrels per day for the last five years.
According to the energy policy, as the nation’s demand for oil increases refineries are running near full capacity.
"Whether the economy is booming or in a recession, we still have to drive to work and heat our homes," Abendhoff said.
The policy states that the nation’s energy crisis is due to an imbalance between production and consumption. It also says the United States gets 52 percent of its oil from imports.
According to the Department of Energy, in December 2002 the United States imported more than 11 million barrels of crude oil and oil products — each day.
On average, the United States consumes more than 25 percent of the oil produced worldwide, according to the energy policy.
In 2000, more than 55 percent of oil refined in the United States came from four countries: Canada, Saudi Arabia, Venezuela and Mexico, according to the DOE.
To increase domestic sources of oil, the energy policy and Bush’s 2004 budget proposal suggest opening public lands, such as the Arctic National Wildlife Refuge, to oil exploration and production.
Bill Bradlee, Western Region program manager for the League of Conservation Voters, said he questions the amount of oil that could be extracted from public lands and whether it would quench the nation’s demand for oil. He said some estimates predict the oil in ANWR would satisfy six months of consumption in the United States.
"I don’t see opening up the Arctic wilderness or building new pipelines as any kind of solution other than a temporary solution," said Kathy Moran, an operations technician at BP Cherry Point.
The Bush administration also suggested that alternative forms of energy, such as solar, wind and geothermal energy should be researched for future use. Both the energy policy and the budget proposal recommended opening ANWR to drilling and using part of the money from land bids to fund research for renewable and alternative forms of energy.
Bradlee said because the money for renewable research has to come from drilling in the Arctic, the proposal, in essence, takes renewable energy hostage.
Bush’s 2004 budget has to be approved by Congress before the oil industry can begin exploration for oil in the Arctic. For now, oil companies will continue to drill on Alaska’s North Slope and BP Cherry Point’s employees will continue to refine its crude.
Within the next few years, the refinery will add two new units that will make production of petroleum products more efficient and provide jobs.
BP Cherry Point’s manager of environmental health and safety Karen Payne said the refinery is adding a clean gasoline unit that will allow the refinery to produce cleaner gasoline, which should be available at gas stations by 2005.
The refinery is also adding a co-generation facility that will provide electricity for the refinery as well as for the electricity grid. The unit takes natural gas through turbines that produce electricity and steam for the refinery, Payne said.
Abendhoff said the two units will provide 55 to 65 permanent jobs at the refinery.
"I have to look at the big picture," Fletcher said. "I work in the oil industry. It’s provided a fantastic living."
Kremen said that he believes times will change and in the future the production of gasoline will not have the value that it has today.
"I think the local economy will evolve as technology changes," he said. "In the near future our local economy is somewhat dependent on those two refineries, but I think in the long term that may not be the case."
Moran said that oil is woven into American culture and will be necessary until better options are available.
"I don’t know very many people who would be willing to give up their ability to travel," Moran said. "They don’t want to give up police responding to their calls or the military to a national incident. At this point in our economy and technology, we have to have gasoline and diesel to move our people."
