Parnell: Administration working to keep oil refinery operating

The Associated PressFebruary 17, 2014 

A fuel transport leaves the Flint Hills Resources North Pole Refinery on Monday, May, 12, 2008.

SAM HARREL — Fairbanks Daily News-Miner

— Gov. Sean Parnell said critics of his administration's actions in a North Pole oil refinery's impending closure don't see behind-the-scenes work that could keep the refinery operating.

Flint Hills Resources announced earlier this month that the refinery would cease gasoline production on May 1 and the production of jet fuel by June 1.

The Fairbanks Daily News-Miner reports Parnell told the newspaper's editorial board that the price the state sets for refinery "royalty" oil is under review.

U.S. Sen. Mark Begich has said the environmental-cleanup issue needs to be resolved, and he called for Parnell to take a "personal interest" in the matter. Former Gov. Frank Murkowski said in a column that Parnell has to act more aggressively.

Parnell defended himself in the editorial-board meeting on Friday.

"Just because you don't see it doesn't mean it isn't happening," Parnell said. "There are a whole host of players who are working diligently to make sure Interior residents get relief."

He also said his administration negotiated a lower royalty oil price in 2012.

Flint Hills completed its purchase of the refinery in April 2004. In 2009, the industrial chemical sulfolane, a liquid used in refining oil, was discovered to have leached into groundwater beneath the refinery, resulting in a plume about 2.5 miles wide and 3 miles long.

The company was aware of soil contamination but thought it was confined to the ground beneath the refinery. Sulfolane was later detected beyond refinery property, including trace amounts in the city of North Pole's two wells.

About 300 homes in the area have wells with sulfolane-fouled water, and those residents are being provided with an alternate water source by Flint Hills.

A Flint Hills vice president said the refinery is closing because of a difficult refining market and uncertainties over future soil and groundwater-cleanup costs that began under the refinery's former owners.

The decision to close the refining operations will cost about 90 jobs.

Parnell said calls have gone out to employers throughout Alaska to find new opportunities for refinery workers who will be losing their jobs.

"I care very much about what's happening here," Parnell said. "Our administration is on it."

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