Damaged oil refinery closing; parish weighs economic impacts

November 10, 2021 GMT

BELLE CHASSE, La. (AP) — A Louisiana oil refinery that was flooded during Hurricane Ida is being shut down and turned into a storage terminal, prompting local leaders to assess the potential economic impacts that could come with losing one of the area’s biggest employers.

Phillips 66 announced Monday that it was closing its massive Alliance Refinery along the bank of the Mississippi River just south of New Orleans, The Times-Picayune/The New Orleans Advocate reported. The Houston-based company said the extensive damage from the storm Aug. 29 was too expensive to repair.

Converting part of the existing infrastructure at the 2,400-acre (971-hectare) site to a storage and transit terminal will likely affect most of the 900 employees and contractors who currently work there.

“Phillips 66 is in the process of determining how many employees will remain at the terminal,” spokesperson Bernardo Fallas told the news outlet. “Some employees could be offered positions at other sites within our portfolio.”


Plaquemines Parish President Kirk Lepine called the news “a gut punch to the community.”

“If you’re from Plaquemines you know somebody who either works for or did work there,” he said. “My brother is retired from there.”

Storm surge from Ida breached the refinery’s internal levee wall and much of the facility was covered under about 5 feet (1.5 meters) of water. Phillips 66 put it up for sale just days before the hurricane, citing poor market conditions. But the damage caused the plant’s value to fall to about $200 million, which ended attempts to sell it for around $500 million.

The Belle Chasse site that was built in 1971 has been the parish’s largest single source of property tax revenue for many years, according to Plaquemines Assessor Belinda Hazel. The company will pay $7.4 million of the parish’s approximately $60 million total this year.

While the tax revenue won’t immediately plummet, Hazel said it’s expected to decrease significantly when experts re-value the repurposed facility. She added that “the more immediate effect would be people moving and houses going on the market.”

Other projects, such as Venture Global’s proposed $8.9 billion liquefied natural gas plant, could provide more jobs in the area. Federal regulators said at the end of October that the planned 650-acre (263-hectare) site for the plant could start being cleared. That project would provide about 2,200 jobs during construction but would only create approximately 250 permanent jobs.

David Dismukes, executive director of Louisiana State University’s Center for Energy Studies, said the closure of the Alliance Refinery was not unexpected but is still a major blow.

“Finding something that can replace that big piece of infrastructure at that level of employment isn’t easy to come by,” he told the news outlet. “I can’t tell you that there is anything too promising out there for Plaquemines Parish.”