Layoffs announced at Columbia Pacific Bio-Refinery
28 jobs cut as facility transitions from crude oil to ethanol
The Columbia Pacific Bio-Refinery in Clatskanie will no longer ship crude oil from its facility for the time being.
Global Partners LP, which owns the bio-refinery, announced Thursday that in light of the heavy decline in the crude oil market, the company plans to transition its facility at Port Westward to an ethanol transloading operation.
Shifting commodities at the site led to the layoff of 28 employees at the facility, the company reported Thursday. The layoffs were part of a reduction in workforce of about 70 employees from the company.
These reductions are a direct result of the severe headwinds affecting the crude oil market and the corresponding decrease in crude oil transloading activities at the facility, a statement released by the company on Thursday reads.
Storage tanks previously used for crude oil will be cleaned out and prepared for ethanol, according to the statement. Once the tanks are ready for ethanol, the company anticipates hiring back an appropriate level of staff.
The bio-refinery was initially constructed to handle ethanol, but it was never used for that.
The site began transloading crude oil from rail shipments in 2012.
In early 2013, Global Partners bought the bio-refinery from Cascade Kelly Holdings LLC for about $95 million, according to JH Kelly.
In March 2014, the Department of Environmental Quality fined Columbia Pacific Bio-Refinery for transloading crude oil without an air quality permit. The bio-refinery settled with DEQ for $81,834.
Later that year, Global Partners announced plans for a $50 to $70 million investment in the bio-refinery to add ethanol production and transloading to the site. Dan Luckett, general manager of the bio-refinery, said the company would first need to expand the site, because it wasn't equipped to handle crude oil and ethanol.
News of the staffing layoffs and crude oil wind down at Port Westward came after the continuing decline in Global Partners stock.
Earlier this year, the Port of St. Helens, which has a lease agreement with Global Partners for the bio-refinery at the port's Port Westward facility, reported it expected to lose nearly $1 million in revenue from the company due to the significant decline in crude oil shipments. The port previously received revenue from the bio-refinery in the form of wharfage tariffs at its docks.
We continue to be negatively impacted by fixed costs associated with our crude oil business, including railcar leases, Eric Slifka, Global Partners president and CEO stated in a news release Thursday. As a result, in the first quarter we have implemented a number of initiatives to reduce expenses and manage our cash flow. We are pursuing this approach in order to position the Partnership for the long term.
Paulette Lichatowich, a commissioner on the Port of St. Helens Board of Commissioners, said the dramatic layoffs and slow down of crude oil signal a need for the port to look beyond Port Westward for new industrial growth.
I have concerns about the large investment that's been made out at Port Westward," Lichatowich said Thursday. "I do have concerns about putting so much emphasis out there and not having a broader portfolio. We've spent so much time focusing on Port Westward and we haven't seen the results. I'd like to see more jobs out ther efor the amount of money that's been invested out there.