Fuel GaugePublished 11:24am Thursday, November 20, 2008
The refinery at the mouth of the Big Sandy River that Ashland Inc. founder Paul Garrett Blazer ruled for five decades may be synonymous with the gasoline we put in our cars.
But right now, it’s the diesel that comes out of the distillation towers that fuels the refinery as far as the bottom line goes.
That’s what Tri-State print and broadcast journalists learned during Wednesday’s media day at what is today called Marathon’s Catlettsburg Refinery.
“(The price) of wholesale gasoline is below the cost of crude oil,” Jim Cantrell, division manager at the Catlettsburg refinery, said. “Diesel demand is keeping refinery economics profitable.”
In the recent past, demand for gasoline was so high, “we couldn’t refine enough gas,” he said. “That bubble has burst. Product demand is at a low level.”
The current collapse of consumer demand fueled by the increase in gasoline prices has sent supplies up. That oversupply has driven the price down. Right now the refinery is producing approximately 85 percent of its capacity.
“If the economy were right, we would be at 93 percent,” he said.
The refinery, which was begun in 1924 as the Swiss Oil Co. and then quickly segued to the Ashland Oil Refining Co., became the sole property of Marathon in 2005. That is when Marathon, the fifth largest U.S. refiner, bought out Ashland’s interest in a joint venture the two companies had formed to operate the 650-acre site in 1998.
Today, the plant refines an average of 226,000 barrels a day, or two percent of the entire gasoline consumption in the United States. Catlettsburg is the second largest of Marathon Petroleum Co.’s seven refineries with the plant at Garyville, La., producing about 30 barrels a day more. The smallest refinery is at St. Paul Park, Minn., with a capacity of 74,000 barrels a day.
Working in tandem with the refinery is the marine repair terminal that maintains the boat-barge system that transports the major part of the product out to customers. There, in the past three years, staffing has risen from 270 to 400 employees.
With the building of four new towboats, the first to go into operation next spring, that figure is expected to rise to 500, according to Jamie Alcorn of MRT.
With approximately 900 employees on the payroll and on average 1,000 contract employees, Catlettsburg Refinery has a payroll of $126 million annually.
That contract figure goes up to around 2,200 outside workers at least twice a year for periodic, scheduled shutdowns of major units when they undergo decontaminated for hydrocarbons and undergo a full inspection.
“We keep the building and trade union hall pretty empty,” Cantrell said.