Phillips 66: Ponca City Refinery

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by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


Other Locations


Contents

[edit] Master Index of Articles about Phillips 66

The 587 foot tall Mammoet PTC 140 crane, seen here from North First Street, towers over the Refinery Complex in Ponca City. The supercrane was used to move two new 232 ton coker reactor units within the refinery on September 29, 2013. Phillips was willing to invest $70 million in the two new coker reactor units because the Ponca City Refinery is one of the best run, safest, and most profitable of Phillips' fifteen worldwide refineries and Garland wants the refinery in Ponca City to continue to run smoothly and profitably. This photograph of the supercrane in Ponca City was taken from almost two miles away from the crane. Photo: Hugh Pickens All Rights Reserved.
Hugh Pickens, an analyst who closely follows Phillips 66, speaks with Phillips CEO Greg Garland (right) about the disposition of the North Tower, South Tower, and Research West at Phillips' Ponca City Refinery after Garland's speech to the Bartlesville Chamber of Commerce on August 13, 2014.

by Hugh Pickens, Ponca City Oklahoma


The purpose of this report is to provide a comprehensive overview of Phillips 66 that documents and explains the company's business strategy and execution of that strategy.

Major Sections of this report on Phillips 66 include:

Safety, Environment, Legal


Corporate


Strategic and Financial


Business Segments


Stock Market


Reference

Refining Business Segment


Increasing Profitability in Refining Business Segment


Detailed Look at Ponca City Refinery


Other Phillips Refineries


Other Locations


[edit] Introduction

The purpose of this report is to provide a comprehensive overview of the Ponca City refinery and Ponca City's century old history as an oil refining center. The report is divided into five major sections that cover the refinery's history since its inception down to the present and discusses issues facing the refinery today under the tenure of Phillips 66:

[edit] Ponca City and its Century-Old Oil Refining History

A photo of part of Marland Refinery in Ponca City, Oklahoma taken in 1919. An article from Petroleum Age in 1922 said that Marland Refinery in Ponca City had a production of 10,000-barrel per day and Marland Refinery included nearly two million barrels of steel storage for crude and finished products. An article from Petroleum Age in 1928 said "Marland refinery at Ponca City is one of the largest complete plants in the Mid-Continent field with a crude capacity of 35,000 barrels per day of which approximately half can be run down to wax. The plant is equipped with four large Dubbs units, two Cross units, and 18 Fleming stills." Derivative Photo: Hugh Pickens
A photo of Marland Refinery in Ponca City in 1921. By 1921 EW Marland had consolidated all of his oil operations under the auspices of the Marland Oil Company. Headquartered in Ponca City the firm continued its phenomenal growth pattern by absorbing numerous small oil companies including the Comar Oil Company, Tom Jones Oil Company, Kenney-Cleary Oil Company, Francoma Oil Company, John S. Alcorn Oil Company, and many others whose highly competent executives Marland's company usually retained. Photo: Oklahoma Historical Society
Willie Cries was the first successful oil well drilled by EW Marland in 1911. Photo: Wikipedia
Prospectus for the 101 Ranch Oil Company. Marland founded the 101 Ranch Oil Company, located on the Miller Brothers 101 Ranch, and drilled his first successful oil well at Willie Cries on land which he leased in 1911 from the Ponca Tribe. Click to enlarge. Photo: Wikipedia
The Marland Refinery in 1921 from the Marland Oil Company Quarterly Report. There are multitude of oil derricks in the upper left had corner of the graphic, part of the Ponca Field. At the time the photo was taken the Marland Refinery had the largest oil tank storage facility in the world. Click on photo to enlarge.
The Marland Refinery in 1930. Photo: Unknown
The refinery at Ponca City circa 1940. Photo: Unknown
Conoco headquarters at Ponca City in 1950. Ponca City was a thriving community after it became the headquarters for Continental Oil Company (Conoco). Conoco was by far Ponca City's biggest employer with over 800 employees at the refinery and about 3,800 employees working in support services including financial, research, engineering, and service organizations. Photo: Unknown
The Conoco Oil Refinery in Ponca City, Oklahoma in the 1960's. The Park Building, shown in this photo directly north of the Continental Building, was built in the early 1960s, possibly completed in 1962. Derivative Photo: Hugh Pickens
The Conoco Oil Refinery in Ponca City, Oklahoma in the 1980's. The North Tower was completed in 1978. The South Tower was completed in 1982. Derivative Photo: Hugh Pickens

[edit] 1911: Marland finds Oil near Ponca City

Over the past 100 years, Ponca City's history has been shaped for the most part by the ebb and flow of the petroleum industry. EW Marland decided to come to Ponca City after a relative introduced him to the Miller brothers whose famous 101 Ranch lay near Ponca City, Oklahoma. In 1908 E. W. journeyed to Ponca City and immediately decided that the surface geology indicated oil. Marland raised capital from financiers back in Pennsylvania and began drilling. Marland originally founded the 101 Ranch Oil Company, located on the Miller Brothers 101 Ranch, and after drilling seven dry holes, drilled his first successful oil well, called Willie Cries, in 1911 on land which he leased from the Ponca Tribe.[1][2]

E. W. Marland's life ran to legendary proportions. The Pennsylvania native won and lost an oil fortune in West Virginia, a much larger one in Oklahoma, was a high-stakes gambler, lived lavishly, spent great amounts on his community and his workers, was a businessman with a strong social conscience, an enthusiastic conservationist and gardener. He had boom-and-bust times in politics as well as oil. After losing his independent Marland Oil Co. to financial sharks led by the younger J.P. Morgan, Marland a Democratic convert and ardent New Dealer won a term in Congress and one as Oklahoma's governor. Two bids for the U.S. Senate were unsuccessful. After his first wife died in 1926, he created controversy by having the legal status of their adopted daughter, Lydie, changed so he could marry her. He drilled for and found oil from the Appalachians to California, over much of the West and into Mexico. He pioneered in drilling the rich Three Sands and Burbank fields of Oklahoma this by a man trained as a lawyer, an early-day coal prospector self-taught in geology.[3]

E. W. Marland loved playing poker. A first rate player, Marland learned poker as a fraternity member at the Sigma Chi fraternity house at the Univeristy of Michigan in 1891. He loved gambling intensely and was a fair loser and a modest winner. At Ann Arbor he never gave the impression of excitability while playing and was alart though silent. John Joseph Mathews recounts in his book "Life and Death of an Oilman: The Career of E.W. Marland" that one time a sharpshooter from another part of town came to the Sigma Chi house to play. Very soon he had chips piled before him on the table. Then suddenly he stood up, beamed on the others and said, "I guess I'll check out." As he raked in the money from the banker in exchange for his chips, he said with a smug smile, "the fact is, boys, I need the money." Marland showed shocked surprise on his usually unreadable face. The expression of incredulity impressed the others when the sharpshooter had gone with all the money, they bantered Marland. At each game thereafter someone at some time usually after winning a large pot would say, "The fact is, boys, I need the money."[4]

After Marland sturck oil in Ponca City and had begun to build his oil empire, many a night E. W. and his lieutenants and friends would sit until daybreak playing poker. There were hundreds of private poker parties during a year. Sometimes there were lavish affairs at the Arcade Hotel , or at some private home. Marladn continued to love playing poker and played with deep concentration, except that now he could afford to lose of to win as much as seventy-five thousand dollars.[5]

[edit] 1917: Marland Oil Founded

Marland Oil Company was founded in 1917, when Marland assembled his various holdings including the 101 Ranch Oil Company into one unit, forming Marland Oil Company. Later, on January 3, 1921 Marland incorporated the Marland Oil Company in Delaware to acquire through an exchange of stock control of the Marland Refining Corp. and Kay County Gas Co. By 1920 it is estimated that Marland and his partners controlled 10% of the worlds oil production (the equivalent of Saudi Arabia in 2006) and that Marland was worth $85 million (over $1.0 Billion in 2015 dollars).[6]

From the outset Marland realized that to sustain long-range corporate growth he must form an integrated company encompassing drilling and production, storage and transportation, and refining, and retailing, similar to the very successful model used by the Standard Oil Company. The first step in this process was to dissolve the 101 Ranch Oil Company and replace it with the Marland Refining Company. Over the next several years Marland expanded his empire to include production in neighboring states, and by 1919 he had even started large-scale drilling operations in Mexico. The next step in bringing the feverish rate of growth under a more centralized and integrated operation came in early 1921 when Marland consolidated all of his oil operations under the auspices of the Marland Oil Company. Headquartered in Ponca City, where its major refining facility was located, the firm continued its phenomenal growth pattern by absorbing numerous small oil companies such as Comar Oil Company, Tom Jones Oil Company, Kenney-Cleary Oil Company, Francoma Oil Company, John S. Alcorn Oil Company, and many others whose highly competent executives Marland's company usually retained. Additionally, the company opened its first retail gasoline "filling station" in Pawhuska, Oklahoma, in 1920, and that aspect of the business began to experience rapid growth. Marland took a strong, paternal interest in his company and in his employees and provided numerous benefits not normally offered in that era. He furnished company housing at a nominal fee, provided free insurance to all employees, paid wages above the norm for the time, and is generally acknowledged to have provided the best employee benefits and working conditions in the state. Additionally, his donations to local charities and civic projects were enormous, and he sponsored legendary entertainment spectacles for both employees and the general public.[7]

[edit] 1918: Marland Refinery Constructed

In 1918 Marland began construction of the Marland Refinery and the population of Ponca City doubled then trebled in a few months.[8] According to an article appearing in Petroleum Age in 1922, the refinery in Ponca City was already one of the largest refineries in the world by 1920:

Located in the heart of the Mid-Continent oil field, the greatest known light oil field in the world, by 1920 the company controlled, with its subsidiaries, over 200,000 acres of proven and valuable oil land within a radius of 100 miles from Ponca City, the headquarters of the company. A study of the map of Marland properties in Northern Oklahoma proves easily the strong strategic position the company holds through its oil resources and large reserves in some of the best pools of this district. Marland oil opened in 1920 the famous Hickman, or now better known as Burbank pool, in the Western Osage; in 1921 the Tonkawa pool in Noble County, within fifteen miles of Ponca City, which promises to produce large quantities of high-gravity crude. It controls almost entirely the Ponca field, one of the oldest and best producing fields in the Mid-Continent, with five producing sands; holds large parcels of oil and gas lands in the Eastern and Western Osage fields, in the Garber, Noble, Newkirk, Deer-Creek and in the Pawnee Payne district. Marland draws its crude from eighteen producing fields with 244 wells and produces, with its affiliated companies, the Comar and Alcorn Oil Companies, over 12.000 barrels per day, sufficient crude for its own refinery demand. Pipe lines extending 271 miles, with thirteen modern equipped pumping stations, radiate in three directions from Ponca City and connect Marland's two refineries with oil fields which have ample unmined production to supply sufficient crude oil for many years to come. The company operates in Ponca City a 10,000-barrel complete refinery, and at Covington a 1,000-barrel skimming plant producing a well-known brand of high grade gasoline and lubricating oils. Nearly two million barrels of steel storage for crude and finished products give the company a strong position in the market, and enabled Marland to begin the storage of gasoline when the refinery price was as low as 12-1/2 cents. The recent raise, totaling so far 3 cents per gallon has greatly increased the value of the 250,000 to 300,000 barrels gasoline the company keeps i» storage against the coming summer demand.[9]

"E. W. Marland's dreams were about to come true when I arrived in Ponca City. That was in 1919 and there were no buildings south of Grand Avenue on the east side of the railroad tracks," says Charles D. Hull, later to become Refinery Manager in 1952 and mayor of Ponca City. "Only a wheatfield occupied the area. Mr. Marland already had the nucleus of a refinery operating where today's Ponca City refinery stands, but it was a mere shadow of the present-day facility. Evidence of the many Marland philanthropies was already beginning to show up throughout the City.[10]

W. H. Shorty Rogers, a refinery supervisor, arrived in Ponca City just after World War I and was sent by the Henry Volk Machine Company to assemble the wax plant for Marland Refining Company. "One day I was offered a position with Marland at the then-fabulous salary of $175 a month and moving expenses from Louisville. The offer came in December, 1919 and was the most unique Christmas present I ever received. We moved to Ponca City the following month. Marland and McFadden would make daily inspections of the refinery. One of the first units in operation were the shell stills, and one one particular day following a flash fire, Mr. Marland showed up on horseback with a lighted cigar in his mouth. I stopped him and asked him if he didn't think the cigar was a safety hazard in the refinery. With a startled look on his face, he grabbed the cigar and slammed it into the ground, then thanked me for reminding him of it.[11]

By 1922 nearly 600 Marland stations were found in 11 mid-continent states, from North Dakota to Oklahoma and as far east as Indiana. Growth required capital, however, and Marland was continually strapped. Turning to investment banker J.P. Morgan and Company, Marland was able to secure financial backing for continued expansion, but with expansion came a hefty price. By 1928 Marland had been forced out by Morgan interests who placed former Texaco executive Dan Moran in charge. With orders from Morgan and Company to put Marland Oil back in the black, Moran set out to acquire key assets that would round out the Marland operation, allowing for increased financial stability. With this in mind, Marland management began to look around for a partner, a company with complementary assets, an operation that would perhaps consider a merger.[12]

Marland's exploitation of oil reserves generated growth and wealth that were previously unimaginable on the Oklahoma prairie, and his company virtually built the city from the ground up. Mansions—including the Marland Mansion and Grand Home—were built by Marland and his associates. The "Roaring 20s" came to an end for Ponca City shortly before the Great Depression. After the takeover bid by J.P. Morgan Jr., son of financier J.P. Morgan, Marland Oil Co. merged with Continental Oil Co. (Conoco) in the late 1920s.[13] It was known as Conoco for more than 70 years. The company maintained its headquarters in Ponca City until the 1950s and continued to grow into a global corporation.[14] Marland was later elected the governor of Oklahoma and as a U.S. congressman.

[edit] 1928: Marland Loses Control of His Company

While in New York City in 1923 Marland received a phone call that would change his life and lead to the downfall of the oil empire he had created. J. P. Morgan, the financier and banker, wanted to talk to Marland. "I had a very pleasant meeting with Mr. Morgan and his associates," Marland later wrote. They asked me if they could be of any help to me by establishing a line of credit for me in their bank amd suggested they could close my lines of credit in Chicago, St. Louis, and Kansas City. This suggestion, besides being very flattering, was very agreeable to me." Marland needed $12 million to expand the Ponca City Refinery and get into the producing business in Texas, California, and New Mexico. Rather than borrow such a large amount, Marland agreed to let Morgan buy $12 million of stock in Marland Oil in return for representation on Marland Oil's board of directors. At first allowing Morgan to name three members to the company's other twelve board members seemed like a prudent move. Marland used the money to expand pipeline facilities, enlarge his fleet of tank cars to 3,100, and build 500 service stations. "He was walking the earth like a king in the company of bankers and brokers, wearing his crown with the ease of hereditary royalty, and viewing the nation's propserity with personal pride," writes Knowles.[15][16][17]

On May 14, 1924 E. W. Marland reported at the annual meeting of stockholders in Wilmington, Delaware that the company had eaned $2.09 per share on 1,382,987 outstanding shares in the company.[18] On August 1, 1925 J. P. Morgan officially notified E. W. Marland that he was exercising an option to purchase an additional 150,000 shares of Marland common stock at $40 per share. This brought the Morgan total to 635,000 shares of stock for an aggregate price of $22,400,000.[19]

By the end of 1926, Marland Oil's books showed current liabilities of over $8 million, an increase of $5 million from 1925. Marland gradually lost control of his company. One of the first decisions of the new board of directors was to form an executive committee that would meet in New York City with three Morgan members and three Marland members. "Every plan of major importance I suggested for the development of the company was vetoed, wrote Marland. "[Morgan] said I took too much 'human' interest in my employees and that Morgan and Company felt that I need under me a President of the Company...who would be hard-boiled and two-fisted." After Marland Oil recorded losses in 1926 and 1927, the executive committee met and decided in 1928 that Marland relinquish the president's title. Marland had no choice but to agree. The committee asked Marland to help find a new president but Morgan had already secretly chosen Marland's replacement - Dan Moran.[20][21][22]

On September 28, 1928 the NY Times reported that reports were circulating in the financial district that E. W. Marland would retire within a few weeks. It was said that he no longer desired an active role in his corportation and that it was expected that J. P. Morgan and Co would increase their representation. Three men were mentioned to succeed Marland: Colonel Franklyn R. Kenny and C. C. Brown, Vice Presidents at Marland Oil, and F. V. Taylor from outside the company.[23] On October 30, 1928 the NY Times reported that Marland had resigned as President of Marland Oil effective November 1, 1928 but that he would remain a director and member of the Executive committee. At the same time Marland Oil announced that Daniel J. Moran, Vice-President and director of the Texas Corporation had been elected President of Marland Oil.[24]

According to W. H. "Shorty" Rogers who later became a refinery supervisor, employee reaction to the Conoco-Marland merger was generally philosophical. "Most felt it meant more job security since we would be working for a bigger company. The program of reorganization went from the top down and most employees felt it was good."[25]

However, J. P. "Jack" Barrett, who went to work for Marland in 1917 and later became supervisor of bulk plant auditor says that when the Conoco-Marland merger occurred a general feeling of unrest swept through the work force and many employees were terminated. "We simply lived from day to day, doing our best and hoping we would not be among those cut loose. Those of us who survived the merger with our jobs intact became a close knit group and cooperation was splendid. We worked six days a week and on Sunday, our day off, we frequently got together for any excursion to the 101 Ranch to see Tony, the trained bear, the ostriches, and other exotic animals.[26]

[edit] 1928 - 1947: The Dan Moran Years

Dan Moran. E. W. Marland's successor as President of Marland Oil was Dan Moran. Known as a bulldog manager, Moran had an explosive temper. Moran's first management decision after taking over was to purge the company of the Marland influence, discharging most of Marland's operating executives, superintendents and managers who had grown up with the company alongside E. W. Marland. Next Moran merged Marland Oil with Continental Oil. "Continental needed a steady, inexpensive supply of crude oil, which Marland had aplenty. Meanwhile, Marland needed more marketing outlets for its refined products - Continental's strength." Moran's management style, although controversial, got results. "What Moran sought to build was not a great national company, but a tightly knit regional company, on the fringe of greatness playing its own special game," wrote Fortune Magazine in 1961. "And in this he succeeded admirably, [despite] is tyrannical one-man show." Although Moran's legacy is forever wedded to his explosive temper and gruff demeanor, his extreme ways did successfully navigate the shoals of the great depression and kept the company alive. As one Conocoan recalled "You need a tough man to survive hard times.

[edit] Dan Moran

E. W. Marland's successor as President of Marland Oil was Dan Moran. Known as a bulldog manager, Moran had an explosive temper. "Moran liked to brandish the machete lopping off people's jobs whenever he felt like it," says Keely Marshall. "Back in the 1940s, I was loading scrap iron into a gondola car with another kid. It was August and the temperature was well over 100 degrees. My partner told me his safety boots were killing him and he sat in the shad to pull them off. At precisely that moment, who but Mr. Moran pulls up in his car. 'Nobody sits down on company time,' he says. The kid was fired on the spot."[27]

L. W. Vickery, later to become Manager of the Engineering Center, arrived in Ponca City in 1929 and still remembers the Dan Moran period in Conoco history. "I was personally involved in his nocturnal visits to the refinery and many stories are still told of incidents that occurred during those visits. Most of them are true, too. Moran wanted everything done RIGHT NOW! He was ruthless and demanding, but in the words of an executive under him, 'he got more done in the wrong way than any man I ever knew.' In the 1930's, he stressed the need for research and engineering and got them. Look at us now."[28]

Cecil Hewitt went to work in the transportation department at Conoco in 1930 after previously working for Marland Oil at its Walters, Oklahoma bulk plant. "My second year in the Garage, Mr. Moran decided the annual inspection tour staff would camp out, so I was chosen to go along to pitch tents and make camp," says Hewitt. "Mr. Moran ran the tour with the precision of a railroad timetable. A minute late for departure and you were left behind. How you caught up was your business. Knowing the man personally, I can say with all candor that I never met a nicer or fairer person anywhere. He never accepted excuses for inefficiency, but the employee who did his job properly received Moran's praise and support."[29]

J. P. "Jack Barrett" said he first met Dan Moran while waiting on the elevator in the Main Office Building. "After introducing myself to him, I asked how his brother Bill, was. Surprised, he asked me how I came to know Bill. I told him that he was in my outfit in World War I. This was to put me in good stead with Mr. Moran for the rest of his time with Conoco. Although we were never close friends, he was always civil to me."[30]

[edit] Reorganization

Moran's first management decision after taking over was to purge the company of the Marland influence, discharging most of Marland's operating executives, superintendents and managers who had grown up with the company alongside E. W. Marland. "The pink slips just kept coming," says Keeley Marshall. Marland himself fared no better. In May 1928 when J. P. Morgan took over Marland Oil, they requested that E. W. Marland relinquish the job of President to become the Chairman of the Board. The Chairman's job was "ornamental, at best. "The bankers made it clear Marland would not be permitted any voice in company affairs," wrote Ruth Sheldon Knowle. Later it got worse when J. P. Morgan's executive committee told Marland that Dan Moran couldn't run the company efficiently while Marland remained in Ponca City. Marland resigned from the company he had founded. Marland later became a successful politician, elected to the House of Representatibves in 1932 and Governor of Oklahoma in 1934.[31][32]

[edit] Merger with Continental Oil

But behind the personal failings of Moran is the story of a man who reshaped and guided Conoco through the great depression and World War II. "When Moran took the wheel in 1928, the company was bleeding red ink, facing debt of $6.5 million ($90 million in 2015 dollars)," writes Russ Banham. "Prospects in the oil industry were poor, given the twin evils of overproduction and soft prices. Moran made it clear that the only way the company could survive was through iron-fisted control of every penny spent." Moran fired workers, gutted their salaries, and abandoned oil-producing property he felt was marginally profitable. "I assure you the decisions which have been executed were impelled by stern necessity," said Moran. "While necessarily painful to some, [they have] had the most salutary effect upon the organization."[33]

According to Banham, Moran set his sites on expanding Marland Oil's modest refinery capacity and marketing depth. Three months after taking over Marland Oil, on April 30, 1929, Moran merged Marland Oil with Continental Oil. "Continental needed a steady, inexpensive supply of crude oil, which Marland had aplenty. Meanwhile, Marland needed more marketing outlets for its refined products - Continental's strength." Rumor has it that the merger also satisfied the personal interest of J. P. Morgan. "J. P. Morgan wanted the merger simply because he was looking for any way to do away with the Marland name," says John Morrow, who retired as Conoco's group senior vice president of finance in the 1980s.[34]

Conoco Inc. was an American oil company founded in 1875 as the Continental Oil and Transportation Company. Based in Ogden, Utah, the company was a coal, oil, kerosene, grease and candles distributor in the West. Marland Oil Company (founded by exploration pioneer E. W. Marland) later acquired the assets (subject to liabilities) of Continental Oil Company, for a consideration of 2,317,266 shares of stock. On June 26, 1929, Marland Oil changed its name to Continental Oil Company and moved its headquarters to Ponca City, Oklahoma. The acquisition gave Conoco the red bar-and-triangle logo previously used by Marland. Conoco used the logo between 1930 and 1970, when the current red capsule logo was adopted. Ponca City remained the world headquarters of Conoco until the 1950s when the headquarters moved to Houston.

The merger worked. By 1937, Moran had eliminated the company's $43 million debt. To celebrate the company's propsperity during the great depression, Moran distributed 5,000 Christmas bonus checks to employees worth $770,000, one of the largest bonuses bestowed by a US company that year. "What Moran sought to build was not a great national company, but a tightly knit regional company, on the fringe of greatness playing its own special game," wrote Fortune Magazine in 1961. " And in this he succeeded admirably, [despite] is tyrannical one-man show." According to Banham, although Moran's legacy is forever wedded to his explosive temper and gruff demeanor, his extreme ways did successfully navigate the shoals of the great depression and kept the company alive. As one Conocoan recalled "You need a tough man to survive hard times."[35][36]

[edit] The War Years

L. W. Vickery says that no reminiscence would be complete without giving credit to the women of that era. "During World War II, when manpower was unavailable, over 70 percent of our employees in the C&P and Grease Plants were women, and they did a fine job! In fact, they started a tradition that continues to this day."[37]

[edit] 1947: McCollumTakes Over and Conoco Headquarters Moves From Ponca City to Houston

Leonard McCollum became President of Conoco in 1947 and led the company into innovative fields of foreign exploration, natural gas processing, fertilizers, detergents and plastics. When McCollum -- known as Mr. Mc -- came to Conoco in 1947, he found a medium-sized oil company operating mainly in the Middle West and the Rocky Mountain states. It was known for its conservatism and had assets of $209 million and a net income of $31 million. Twenty-one years later, in 1968, he was chairman and Conoco's assets stood at $2.3 billion, net income was $203 million and its payroll totaled 32,000. He retired as chairman in 1972. "He had dynamic ideas in business and was a pioneer in many areas," recalled his wife Eleanor. "He once bought a coal company for Conoco. They said he was crazy. It became their most lucrative investment."

Between 1947, when he first entered the boardroom of Conoco, and 1967, when he retired as CEO, McCollum constantly strove for improvement in his company and the oil industry. McCollum established new divisions of research and development, market research, and a planning and coordinating department. He possessed an extraordinary ability to delegate authority, inspire others and to see success where others saw failure. According to his wife, "He was a visionary who understood the oil industry."[38][39]

"The hottest brand going" was the gasoline trademark during his Conoco years. McCollum was a "go-getter" who joked abut the fast pace: "I kept four company planes at my disposal to go north, south, east, and west. I couldn't waste time turning around."[40]

In 1949, McCollum, moved Conoco's headquarters from Ponca City to Houston - the center of the US petroleum industry. New offices were opened at the Sterling Building on Texas and Fannin Streets.[41] Conoco's central research center was built under McCollum's tenure in 1952 and had doubled in size by 1962.[42]

[edit] 1950 to 1980: High Water Mark for Conoco in Ponca City

Many consider the 1950s and 1960s as the high water mark for Conoco in Ponca City. "Your new job puts you right in the middle of Conoco's worldwide diversified operations," read a Conoco employee handbook published in 1967. "More Conocoans - 3,300 of the oil company's employees -work here than in any other single location. Ponca City is the 'Service Center of the Conoco World.' This is the center for our research, engineering, accounting, computer, pipe line, purchasing, and transportation activities. The oil industry is perhaps the most stable in the country. And the many companies of the Conoco family are right at the top of the industry."[43]

"Since 1950, Conoco's growth has been notably dynamic, moving from a position as a domestic regional company to the full rank of major international," continues the handbook. "Almost 'overnight,' Conoco established a fully integrated petroleum operation in Africa and Europe. Conoco is a now company. Enjoying the best overall growth rate among the world's largest oil firms, Conoco is a billion-dollar corporation and interational in scope and operations. Its diversification activities include plastics, coal, plant foods, petrochemical, electronics, nuclear research, and cryogenics applied to worldwide transport of natural gas in liquid form."[44]

"Conoco spends about $10 million annually on research and engineering through the efforts of more than 500 scientists and technicians at the company's multimillion dollar research center at Ponca City."[45]

[edit] 1966: Cities Service Sells Refinery to Sequoia

Cities Service Sells Units to Gulf Oil

Conoco Time

[edit] 1978: North Tower Completed

The Ponocoan reported on August 8, 1980 that a new ten story office building would be build at the Conoco Complex. "the need for this structure reflects our historic growth and existing office space demands," said Warren L. Jensen, vice President and regional coordinator, Midwest area. "It also reaffirms Conoco's commitment to Ponca City. The new South Tower was designed to house 1,000 employees with construction slated to be completed late in 1982. The South Tower was designed to be almost identical in size and design to the existing North Tower, completed in January, 1978. The main difference is that the South Tower has two additional floors, the addition of more elevators, and a central stairway. A one story office area connects the North and South Towers. Architects for the project were Frankfurt, Short, and Bruza of Oklahoma City.[46]

[edit] 1978: Construction Begins on Research West

The Ponocoan reported on January 30, 1978 that construction had begun on the $13 million addition to Conoco's Research and Development Department with a 230,000 square foot building that will house 310 people. Research West would take approximately two years to complete and would house the Exploration Research Division and portions of Chemicals Research and Petroleum Products Divisions.[47]

[edit] 1981: Dupont Acquires Conoco

In 1981, in what was called the largest acquisition in US history at that time, Conoco was purchased by DuPont Company, headquartered in Wilmington Deleware, over the July 4 weekend for $9.7 billion. At the time of the acquisition, DuPont announced that $2 billion in Conoco assets would be sold to reduce Conoco's debt. Dupont began by selling a west coast refinery for $100 million and a group of domestic properties were sold to Petro-Lewis for $750 million. At the time of the acquisition, Conoco was by far Ponca City's biggest employer with 828 employees at the refinery and an additional 3,805 employees working in support services including financial, research,engineering, and service organizations.[48] Thirty years later only the refinery employees remain.

[edit] 1984: Conoco Modifies Air Cleaner at Ponca City Refinery to Help Produce Liquid Fertilizer

In January, 1984 Conoco completed a $2 million refinery modification that made the air from Ponca City Refinery 30 percent cleaner and brought the city a commercial venture the fertilizer plant operated by Kerley Industries Inc. of Phoenix, Ariz. The changes cut refinery operating costs at the same time. In an innovative approach, Conoco engineers figured a way to capture waste gases previously lost in the atmosphere and put them to use. Old sulfur-recovery equipment was replaced by more efficient units and piping was erected to capture gaseous wastes produced during the refining process. The one-time wastes are piped to the nearby Kerley plant, which removes ammonia and sulfur compounds for use in liquid fertilizer. Conoco said its new equipment reduced sulfur dioxide emissions by 30 percent. It is the first system of its kind in Oklahoma and for Conoco.[49]

[edit] 1985: Conoco Upgrades Ponca City Refinery

NewsOK reported on July 14, 2985 that Conoco Inc. is upgrading Ponca City Refinery with a new processing unit that is expected to improve production and profits. The equipment includes a hydrotreater reactor and an amine contractor that together adds hydrogen to the crude oil stock flowing to one of two catalytic crackers at the plant. The hydrogen improves quality of the stock, increasing light oil production. "This new equipment will allow us to increase production of higher-value, light oil products, including gasolines and diesel fuels," said refinery manager J.L. Dimond. Besides raising production and quality, the equipment will remove sulfur from the feedstock stream, resulting in cleaner air. The sulfur will be sold to a fertilizer company that opened its doors in Ponca City earlier this year. The newest equipment additions to the 134,000-barrel-per-day refinery will be finished about Oct. 1, Dimond said. This is the third upgrade in three years.[50]

[edit] 1985: Ponca City Refinery Fights for its Life

News OK reported on July 21, 1985 that the Ponca City Refinery was facing a do-or-die situation. "An in-depth study of Conoco's refining operations by an executive management team has recently determined that the Ponca City refinery is the weakest link in Conoco refining operations," said plant manager John L. Dimond. "Unless the Ponca City refinery meets corporate profit objectives in a relatively short but unspecified time period, the refinery will be closed." That warning was passed along to the refinery's roughly 700 employees recently during meetings led by top Conoco officials including the firm's executive vice president and vice president of North American refinery. "The purpose of the meeting was to tell employees we're in a fight for our life," Dimond said. Since January, the refinery work force has been trimmed by 13 percent or 114 employees as a result of enhanced early retirement offerings to all eligible Conoco personnel systemwide, Dimond said. Overall, Conoco employed at its Ponca City complex more than 4,000 people, about 3,000 of whom work in the firm's major research, development and engineering departments.[51]

Through 1984, the Ponca City refinery "didn't make very much money, not enough to satisfy the corporation (Conoco's parent, Du Pont)," Dimond said. The refinery lost money during a 1985 first quarter that was "terrible," he said. During the second quarter, though, economic conditions were "reasonable," he said. His projections are that financial situation for the third and fourth quarters "will be somewhere in between the first and second." How long Du Pont would be satisfied with only marginal profits or even losses from the Ponca City plant "depends upon the attractiveness of alternate means for the disposition of assets," Dimond said. Also, competition among remaining refiners has become "intense," he said. "This competition is occuring in spite of the fact 111 U.S. refineries have shut down since January 1981 ... Survival is the prize awarded those refineries that are the most efficient."[52]

The keys to the "survival plan" are cost cutting and improved efficiency. Toward that end, Ponca City employees were asked recently for their ideas. The result was 470 suggestions, Dimond said. "Although the exact figures are closely guarded, I am at liberty to state that annual production (operating) costs in Ponca City must be reduced by about $10 million," he said. "I should emphasize that Conoco's management, the Ponca City refinery employees and support staff are committed to surviving this present crisis. Nonetheless, the crisis is very real and any projected increases in operating cost clouds the horizon."[53]

[edit] 1990: Fire Damages Refinery Unit at Ponca City Refinery

NewsOK reported on May 23, 1990 that a spectacular fire that whipped orange fireballs 100 feet into the air and emitted a massive cloud of black smoke that was visible for miles across Kay County forced partial evacuation of the Conoco refinery complex. The inferno started about 6:15 p.m., after most of the 3,800 employees of the 1,300-acre complex were off duty, Hohensee said. "At this point the situation is stable, the fire is under control," Hohensee said at 7:45 p.m. "All emloyees have been accounted for." Nearby neighborhoods in south Ponca City were not evacuated. Ponca City police officer Bruce Piel said the blaze prompted authorities to evacuate children from a baseball field across the street. One member of the company's 16-man fire brigade was taken to St. Joseph Regional Medical Center and another was treated at the plant clinic after they showed signs of exhaustion, company spokesman Lynn Hohensee said. A hospital spokeswoman said the worker taken there was expected to be released Tuesday night. Retired Ponca City fire chief James R. Bates described the fire as a disaster. "They have flames everywhere," Bates said as he watched from his house two miles from the plant.

Hohensee said the fire was fueled by a propane supply. He said fire brigade workers, using a screen of water, made their way to the propane supply and cut it off. Refinery manager Dennis Parker said the fire was out at 9:35 p.m. Hohensee said the cause of the fire was unknown, and a damage estimate was not immediately available. Parker said damage would probably be in the millions. The fire began in the plant's dewaxing unit, where 12 workers were on duty, Hohensee said. He said the unit "dewaxes motor oil that is made into lubricants and then sold." The unit was built in 1941 and refurbished in 1970, Hohensee said. Officials said they originally thought the fire was contained to the dewaxing unit. But at 7:15 p.m. the fire spread to a nearby filtration building, Hohensee said. That building contains four large rotary filters that help separate wax from motor oil. The last major fire at the refinery was in 1973, Hohensee said. "I have never seen anything like this happen," said one 10-year employee, who did not want to be identified.[54]

[edit] 1990: Conoco reaches Environmental Settlement with Ponca City

The NY Times reported in on April 5, 1990 that Conoco had reached one of the largest settlements ever recorded at that time in a lawsuit over environmental contamination offering 400 families that are neighbors to the Conoco refinery a package of measures worth from $23 million to $27 million, according to various estimates that will allow them to move away "from the acrid odors that have come to signify sickness and death in many households." Conoco executives said the settlement would permit them to create an uninhabited buffer zone around the plant. "We didn't do this for the money, and people are not going to have a good time spending it," said Anna Sue Rafferty, a leader of Ponca City Toxic Concerned Citizens, a community group that helped organize the suit against Conoco. "This has been my home for 34 years. I raised four children here. I love this house, but all I want to do now is get out of it." In response to years of complaints, Federal and state officials along with Conoco executives repeatedly told the plant's neighbors that no toxic substances were evident and that they faced no health risk. But recent tests performed by Conoco on samples of water found underground showed traces of benzene, a known carcinogen, according to Dennis Parker, the refinery manager. Adrienne Anderson, Western regional director of the National Toxics Campaign, which provided technical assistance to people in the area, said privately commissioned tests on water that had seeped into basements regularly showed dangerous levels of benzene, arsenic and about 20 other potentially harmful chemicals. Conoco, a fully owned subsidiary of E. I. du Pont de Nemours & Company, did not acknowledge any wrongdoing in the settlement. In a statement Monday, Mr. Parker noted that the agreement says, "No party admits any fault, liability or responsibility for any claims, injuries or damages claimed by any adverse party." Grace Klinger, who learned the chemistry of hydrocarbons to find out what was happening in her neighborhood, said: "When I was growing up, everyone just figured the stink was just refinery stink and if the company said it was O.K. then it was O.K. Now we know better, and it doesn't matter what Conoco says because the truth is out."[55][56]

[edit] 1993: Major Downsizing at Conoco

Ponca City was hit by major downsizing at Conoco in 1993 when approximately 1,400 jobs were cut, resulting in an annual payroll reduction of $40 million. This precipitated an economic slowdown in the city and county in 1993 and 1994. The unemployment rate, which had always been well below the national average of six percent, jumped to 12 percent and unemployment compensation claims more than doubled from the previous year. While Conoco once accounted for 50 percent of the jobs in Ponca City, after the downsizing Conoco accounted for just seven percent, or 1,400 jobs. According to a study by the International Economic Development Council, "the town’s psychology and identity was rocked by the downsizing of its one major employer."[57]

[edit] 1996: Phillips and Conoco End Merger Talks

On May 14, 1996 Phillips 66 and Conoco confirmed that they had been engaged in exclusive discussions to form such a joint-venture company which would, among other things, "market gasoline and other petroleum products under both the Phillips 66 and Conoco brands." However Bartlesville-based Phillips Petroleum Co. and Conoco Inc., Houston, agreed to end discussion of combining their U.S. refining, marketing, supply and transportation assets into a joint venture. Phillips Chairman and Chief Executive Wayne Allen and Conoco President and Chief Executive Archie Dunham said jointly Tuesday, "Both parties negotiated constructively and in good faith, but we were unable to reach agreement on significant commercial issues."

Allen said, "While we're disappointed that we could not reach an agreement, Phillips remains committed to improving the profitability of its RM&T (refining, marketing and transportation) operations." Dunham said, "Conoco and Phillips are both very successful and strong companies. We approached the negotiations on the basis that we would agree to create a joint venture only if it could be demonstrated that such a move would improve both companies' financial performance and be in the best interests of our shareholders. While it is disappointing that we could not reach agreement, Conoco is well positioned to compete in this market, and remains committed to providing quality products and service to its customers," Dunham added.[58]

[edit] 1998: DuPont Sells Off Stake making Conoco Independent

The NY Times reported in 1998 that in a move that many investors believe was long overdue, DuPont announced that it would divest itself of 20 percent of its $22 billion Conoco oil subsidiary in a tax-free stock offering that could bring in as much as $5 billion. Charles O. Holliday Jr., DuPont's chief executive, said he would dispose of the rest of Conoco "as soon as practical." DuPont bought Conoco in 1981 as insurance against the pricing and supply tactics of the Organization of Petroleum Exporting Countries. But oil prices have been far less volatile than it had feared, and DuPont continues to de-emphasize the petrochemical side of its business, so having Conoco as a captive source of raw material is of less strategic importance.[59] A successful road show kicked into gear to sell Conoco to the investment community, culminating in the largest IPO in history, nearly $4.4 billion. Many financial analysts were skeptical the deal would be pulled off, given tremendous upheaval in both the oil and stock markets and a dried-up appetite for public offerings. But company personnel, from top executives to support people, worked countless hours to make the IPO a success. On October 22, 1998, their efforts paid off: Conoco stock began trading again, using a new symbol, "COC," honoring the name it had held for so many years - Continental Oil Company.[60]

[edit] Ponca City and the "Merger of Equals" with Phillips in 2001

Conoco Inc. and Phillips Petroleum Co. announced on November 18, 2001 that their boards of directors have unanimously approved a merger of equals and signed a definitive merger agreement. The merged company became the third-largest integrated U.S. energy company based on market capitalization and oil and gas reserves and production. Worldwide, it became the sixth-largest energy company based on hydrocarbon reserves and the fifth-largest global refiner. Graphic Created by: Granger Meador Used with permission
Two vacant office buildings (The North Tower and the South Tower) at Phillips 66's Refinery Complex in Ponca City. On February 17, 2009 ConocoPhillips announced they had decided to relocate all of its 750 non-refinery positions out of Ponca City within two years and that first 250 jobs would be moved in 2009 with 180 jobs going to Houston and 70 jobs to Bartlesville. The positions moving first included jobs in technical services, research and development, engineering and support, human resources and Internet technology, among others. Management met with hundreds of Ponca City employees to tell them the news. "It’s a difficult time in general for all ConocoPhillips employees," said ConocoPhillips spokesman Tracy Harlow. "We made the strategic decision to consolidate locations for the most effective corporate operations."[61] Photo: Hugh Pickens

[edit] Other Stories About the Ponca City Refinery:

[edit] 2001: The Creation of ConocoPhillips

Conoco Inc. and Phillips Petroleum Co. announced on November 18, 2001 that their boards of directors have unanimously approved a merger of equals and signed a definitive merger agreement. The merged company became the third-largest integrated U.S. energy company based on market capitalization and oil and gas reserves and production. Worldwide, it became the sixth-largest energy company based on hydrocarbon reserves and the fifth-largest global refiner. Upon completion of the merger, Archie W. Dunham, Conoco chairman and chief executive officer, would serve as chairman of ConocoPhillips and delay his scheduled retirement to 2004. James J. Mulva, Phillips chairman and chief executive officer, would become president and chief executive officer of the combined company, and also become chairman upon Dunham's retirement.[62][63]

The Associated Press reported that analysts described the combination as a deal done to survive. If Phillips and Conoco hadn't decided to join forces, analysts said they risked losing market share to competitors in an unhealthy business climate for all but the largest petroleum companies reported Alan Clenndenning. "This is absolutely a matter of survival - survival nor necessarily to thrive, but to guarantee they will survive, said Fadel Gheit, an analyst at Fahnestock & Co. In a conference callwith analysts, top Phillips and Conoco officials said the merger would allow them to save at least $750 million annually in part through the elimination of an unspecified number of jobs from the company's combined roster of 58,000 employees. "You cannot say you are cutting cots if you cut less than 5 percent, said Gheit. "And if you want to be aggressive with a sharp knife you can cut 15 to 20 percent, which I see as unlikely." Officials took pains to describe the deal as a merger of equals, tough under its terms, Phillips shareholders wil end up with a 56.6 percent stake in the new company.[64]

Businessweek reported in 2005 chief executive officer Mulva had conceived the bold $16 billion deal that created ConocoPhillips in 2002 that vaulted it into the league of energy giants so large they're called supermajors and was an aggressive risk-taker willing to place multibillion-dollar bets in the most volatile places on earth. All of the industry's big players are swimming in cash, reported Businessweek but Mulva is plowing some 70% of the company's expected cash flow back into the business, compared with 60% at Chevron Corp. and 35% at Exxon Mobil Corp.. "We're aggressive about where we want to be five years from now," said Mulva. "Even with the benefit of hindsight, Mulva has done a lot right," wrote Mark Morrison. "His aptly timed Conoco acquisition put the company in a position to benefit from a new global dynamic of rising energy demand that could last into the next decade. And his bold plans may ultimately prove that he adjusted more wisely and quickly to the changing world of energy than the other majors. Right or wrong, no one will accuse Mulva of being shy."[65]

According to Jim Mulva's presentation to financial analysts on July 14, 2011, ConocoPhillips' view was that the company needed to go up in size. That is one of the reasons for the merger -- to compete around the world. "We also felt, looking back 10 years ago, that there is going to be consolidation in the industry. And that made a lot of sense that we were pretty bullish about oil prices and we feltthe supply and demand situation of oil would get tighter with time."[66][67][68]

[edit] 2001: Impact of Merger of Conoco and Phillips on Oklahoma Communities

KOCO reported on November 19, 2001 that merger of Conoco and Phillips in 2001 stunned residents in both Bartlesville and Ponca City. "This could be a bad deal for Bartlesville," said an unnerved Bartlesville resident Chuck Tate, who realizes how the economic fortunes of his town are tied to the huge oil company based. "I hope not, but I'm expecting the worst." Bartlesville's fortune has long mirrored the ups and downs of the company founded in 1917 by brothers Frank and L.E. Phillips. There was downsizing after the 1980s oil bust. Bartlesville embarked on a sustained effort to diversify its economy, luring new businesses and factories but nothing to compare to Phillips. During the oil boom 20 years ago, Phillips employed 9,000 locally, half the city's workforce. "Phillips has obviously been a huge part of this town, in my lifetime anyway," said local travel agency executive Gary Spears. "It's scary." Spears said all of his business is directly related to arrangements with Phillips or tied indirectly to travel by Phillips' employees or townspeople who benefit from the company. "When they say the Phillips' headquarters is not going to be here, it's a huge announcement," Spears said. "I don't know what that means at this point. Nobody does."[69]

ConocoPhillips will based in Houston, home to Conoco. It will keep a reduced presence in Bartlesville, Okla., where Phillips employs 2,400 at its headquarters and research facility. "This is really a growth story for Conoco and Phillips," said Conoco CEO Archie Dunham who is delaying a planned retirement to serve as chairman of the combined company. Phillips chairman James Mulva will be chief executive of the company, and become chairman when Dunham retires in 2004. Gov. Frank Keating said the merger was "unavoidable to ensure the survival in Oklahoma of both companies." "While some job reductions will result, I have assurances from the leaders of the new company that it will maintain an even stronger Oklahoma presence," he said.[70]

Also affected is Ponca City, 70 miles due west, where Conoco's refinery and offices employ 1,900 of the town's 26,000 people. "One of the great fears we've had in Ponca City was that Conoco might be the victim of a hostile takeover," said Ponca City Mayor Tom Leonard. "Now that they have created the third largest oil and gas company in the United States, that pretty much eliminates that risk."[71]

[edit] 2003: Archie Dunham Paid $25 Million Bonus for Merging Conoco with Phillips 66

Archie Dunham Was Paid a $25 Million Bonus for Merging Conoco with Phillips 66. A financial sweetener triggered by the merger of Conoco Inc. and Phillips Petroleum Co. allowed ConocoPhillips Chairman Archie Dunham to pull in more than $31 million in 2002. Archie Dunham, CEO of Conoco in 2000, received a $25 million "change of control" bonus payment made "in connection with the merger" of Houston's Conoco and Bartlesville, Oklahoma-based Phillips 66. The combined change of control payments for top Conoco Executives amounted to $64.8 million. “Integrity and ethics are among the responsibilities of all our corporate leadership, especially myself,” says Dunham. “Integrity and ethics must be evident in not only our personal lives, but also in our professional conduct before they can be instilled in our employees.” "Those guys are getting rich," said one energy stock analyst. Photo: Wikipedia

Houston Business Journal reported on April 27, 2003 that a financial sweetener triggered by the merger of Conoco and Phillips 66 allowed ConocoPhillips Chairman Archie Dunham to pull in more than $31 million in 2002. Archie Dunham, CEO of Conoco in 2000, received a $25 million "change of control" payment and a corresponding "tax gross-up payment" which together surpassed $26.6 million. Dunham's bonus was made "in connection with the merger" of Houston's Conoco and Bartlesville, Okla.-based Phillips, according to Securities and Exchange documents filed by Houston-based ConocoPhillips.

ConocoPhillips Executive Vice President Jim Nokes received change of control payments exceeding $19.6 million. Nokes oversees refining, marketing, supply and transportation operations. His total compensation last year was more than $21.4 million. At the same time, the company's Rob McKee floated into retirement with golden parachute bonuses that totaled $22.9 million, a vast majority of which was a change of control payment. On March 31, McKee retired as the ConocoPhillips executive vice president over exploration and production. His total compensation of more than $24 million last year likely would have been hard to fathom when he joined Conoco Inc. in New Orleans as a junior engineer in 1967. The combined change of control payments for former Conoco Executives Dunham, McKee and Nokes amounted to approximately $64.8 million. "Those guys are getting rich," says one energy stock analyst.[72]

“Integrity and ethics are among the responsibilities of all our corporate leadership, especially myself,” said Dunham in 2012. “Integrity and ethics must be evident in not only our personal lives, but also in our professional conduct before they can be instilled in our employees.”[73]

Jim Mulva, Phillips CEO and president, missed out on a change of control payment, but still managed to earn more than $18 million in 2002. A majority of Mulva's money in 2002 came via a "long-term incentive payout" of more than $14.9 million. Mulva was chairman and CEO of Phillips before the merger, but now he shares top billing with former Conoco Inc. Chairman, CEO and President Dunham.[74]

[edit] 2003: Fire Damages Ponca City Refinery

The Tulsa World reported on July 31, 2003 that an explosion and fire on July 21, 2003 shut down several units at the Ponca City Refinery. ConocoPhillips CEO Jim Mulva said that ConocoPhillips planned to run its Ponca City refinery at about 62 percent of capacity in the third quarter. The plant has the capacity to produce about 105,000 barrels of gasoline a day and 74,000 barrels a day of distillate fuels, which include heating oil and diesel. "We think the lost profit opportunity impact on net income in the third quarter is about $30 million," Mulva said.[75]

Two employees and a contract worker were injured when the fire on the Ponca City refinery's west side started about 11 am. Plumes of black smoke filled the sky, but by evening, the smoke had decreased. Plant manager Ron Armstrong said he had no estimate of how long the fire would burn, but that it didn't seem to threaten other parts of the refinery. "The fire is contained. We're just letting it burn itself out," he said. Temperatures topped 100 degrees as 60 firefighters from several departments fought to contain the blaze.[76]

The last known fire at the plant was June 2002, when severe lightning and storms hit the Ponca City area. The plant's fire brigade quickly doused a small blaze thought to be related to a power surge from a lightning strike. In October 1999, two workers were burned when fuel ignited in an 80,000-barrel storage tank. An estimated 50,000 barrels of fuel were consumed in the fire and damage was estimated at $1.5 million. In July 1996, the plant experienced a fire in a hydro heater, which removes sulfur from the hydrocarbon feed stock for the manufacture of oil and gas products. No one was injured and production was not interrupted. A major fire occurred in May 1990 when a spectacular, propane-fed blaze swept through a dewaxing unit, causing more than $1 million in damage. On New Year's Eve 1990, fire damaged one of the Ponca City plant's three crude oil processing units. The unit refines crude oil into such products as gasoline, propane, kerosene and diesel fuels, and was processing 56,000 barrels a day before the fire. No one was injured.[77]

According to Conoco, rebuilding the damaged parts of the refinery and investigating the fire that erupted there will be a substantial undertaking. The cause of the fire, the extent of the damage and the cost of that damage remain unclear, but the company's management may receive a report on what sparked the fire as early as this week, said ConocoPhillips spokeswoman Shanley Wells adding that the majority of the refinery's operations weren't damaged by the fire. The company has convened at least four teams: a short-term team to help restart the operations that weren't damaged, a long-term team to focus on the refinery's rebuilding efforts, a team to investigate the incident and a team to conduct a damage assessment, the spokeswoman said. Additional personnel from other refineries also are assisting in the recovery effort, she said. "This is a huge undertaking," Wells said. "Within those various teams are subteams. We have a lot of personnel and resources focused on this."[78]

[edit] 2005: ConocoPhillips Closes Demonstration Plant in Ponca City Eliminating Up to 120 Jobs

On October 21, 2004 ConocoPhillips announced that it would shut down its demonstration plant eliminating up to 120 jobs. The plant was built to test technology designed to convert natural gas into liquid fuels. "It is never easy to make this kind of announcement," said George Paczkowski, ConocoPhillips vice-president of downstream technology in Ponca City, "but we've known this demonstration plant was temporary since we built it. The plant was scheduled to close in July, 2005 eliminating 80 full-time positions and 40 contract jobs. Paczkowski said many of the full-time workers would be reassigned to other positions at the company.[79] "We started the plant to prove our technology to turn natural gas into diesel, and then to provide data for the design of a commercial plant," said ConocoPhillips spokeswoman Shanley Wells-Rau. "In 2005, we said that we successfully developed and proved the technologies. But the company never has moved on to build one commercially. It was never meant to be a long-term, commercial plant."[80]

The Daily Oklahoman reported on December 20, 2008 that ConocoPhillips had sold the company’s natural gas-to-liquids demonstration plant along with the technology behind it for an undisclosed amount of money. The plant was a demonstration project that opened in 2003 and closed in 2005 and had the capability of producing 400 barrels a day of liquid fuels from natural gas. The buyer was Industrial Properties, based in Kansas City who plan to dismantle the plant to resell its steel and equipment.[81]

[edit] 2009: ConocoPhillips Relocates 700 Jobs from Ponca City

On November 7, 2008 ConocoPhillips announced that the company was planning to downsize their operation in Ponca City and that all 700 office worker positions in Ponca City were being for relocated to Bartlesville or Houson. On November 8, 2008 ConocoPhillips first announced that all 700 office worker positions in Ponca City are being considered for consolidation or relocation. "Consolidation and relocation are options we're looking at," said company spokesman Tracy Harlow. "Any and all options are still on the board right now." Most of ConocoPhillips' nonrefinery jobs in Ponca City werefocused in the credit card, information technology, facilities and other support operations, she noted. A steering committee, including ConocoPhillips managers, was looking at options. The review started November 2008 and had not narrowed into specifics so far, Harlow said. The 750 people employed in refinery operations would not be affected by the review.[82]

The Tulsa World reported on February 17, 2009 that ConocoPhillips had decided to relocate all of its 750 non-refinery positions out of Ponca City within two years and that first 250 jobs will be moved in 2009 with 180 jobs going to Houston and 70 jobs to Bartlesville. The positions moving first include jobs in technical services, research and development, engineering and support, human resources and Internet technology, among others. Management met with hundreds of Ponca City employees to tell them the news. "It’s a difficult time in general for all ConocoPhillips employees," said ConocPhillips spokesman Tracy Harlow. ConocoPhillips originally planned the Ponca City relocation study as a standalone effort in 2008 but falling energy and credit markets forced ConocoPhillips to consider layoffs and include Ponca City into its overall business efficiency study. "We made the strategic decision to consolidate locations for the most effective corporate operations,” Harlow said. “Obviously we are conserving cash right now, so cash will limit relocations in 2009.”[83]

Business Week reported that Ponca City took a hit from ConocoPhillips in February 2009, when the company said it planned to move 750 non-refinery jobs out of the city of about 26,000 to Bartlesville and Houston. But the refinery has remained a key part of ConocoPhillips' operations, said ConocoPhillips spokesman John Roper. Rich Cantillon, president and CEO of the Ponca City Chamber of Commerce, said ConocoPhillips upgraded the refinery last year and is performing another upgrade this year. No new oil refineries have been built in the U.S. since 1976, which is another positive sign for the Ponca City facility's future. "It's not going anywhere," Cantillon said. "We are good to go. Ponca City is a happy, good community. ... It's fascinating to see how (the split) will all play out, but we'll always have the refinery. There won't be any more job loss for Ponca City when it comes to (ConocoPhillips). There could be job growth."[84]

City officials were disappointed in ConocoPhillips' announcement that 750 jobs will be relocated from Ponca City, but expect the community to bounce back. "We would have liked to have seen them expand here. We have plenty of office room for them and had hoped they would grow their operation here," said City Manager Craig Stephenson. "We also understand it's a corporate decision." Mayor Homer Nicholson said Conoco has been a good corporate citizen and he is glad ConocoPhillips has decided to leave Oklahoma's largest refinery in Ponca City. "We are thankful," he said. "We were hoping the business optimization study would give them a reason to expand their business in Ponca City. Unfortunately, that did not happen," Nicholson said. "We have weathered larger reductions in force than this one," the mayor said.[85]

[edit] 2009: Effect of ConocoPhillips Downsizing on Ponca City

The Tulsa World reported in 2009 that Conoco employed more than 5,000 people in Ponca City before the oil bust of 1985, the year Dave Myers, executive director of the Ponca City Development Authority, pinpoints as "the beginning of the end for us being a company town." The end itself came in 2002, when Conoco merged into ConocoPhillips and began transferring departments en masse to the Phillips campus in Bartlesville. In November 2009, the company announced it would probably transfer the final 700 office jobs out of Ponca, leaving only 750 jobs in the refinery.[86]

Until a few months ago, Fred Holmes worked in research and development with more than 100 other technicians. Then he and his wife had to choose between early retirement or transferring to Bartlesville, an hour and 20 minutes east of Ponca. "It was a 12-hour day any way you look at it," Holmes says. "She couldn't put up with it then, and I didn't want to do it now." After a few weeks, his wife quit the company and invested in a downtown bridal shop, Affairs to Remember. Now Holmes works there, too — recently moving the shop to a larger storefront and adding a catering service. But Homes still resents the company for, as he puts it, "abandoning Ponca City." While he had a small business to fall back on, Holmes has watched friends and co-workers move away to look for jobs elsewhere. "You used to be able to wake up in the morning and know you had a job and know that your family would be provided for," he says. "Now, nobody knows what's going to happen next."[87]

Mike Dove took early retirement when the company moved his entire department to Bartlesville. When he grew up during the '60s, a job with the company seemed like "the ultimate prize," Dove says. Like many of his classmates, Dove went off to college not to escape Ponca City, but so he could come back and stay. "You could pretty much count on a job for life, and it gave you a sense of security and stability. "By the '90s, that wasn't the case at all." For his own two children, both now adults, staying in Ponca City was never an option. "Finding a job," Dove says, "pretty much means going somewhere else."[88]

KOCO reported on November 7, 2008 that City development executive director David Myers said the diversity of the economy would lessen the effect of possible job losses. "The impact of this economically is not nearly as severe as the impact emotionally," said Myers adding that city leaders didn't want to depend on a single employer that could make or break the community and that other employers also make up a big portion of the economy. "Sensor testing is a $6 billion worldwide industry, and we're the only place in the world where you come and have your sensor tested by a neutral third party," Myers said. "Our real concern is with the individual families that might be impacted by this, and we want to make sure that there are some viable alternatives for them to stay here in Ponca City because most of them do want to stay here," Myers said. Barber Barney Barnwell said he has been in this situation before and so has the community. "We can survive," he said. "Ponca can survive."[89]

[edit] 2010: Possible Sale of Ponca City Refinery

In May 2010, there was a lot of discussion in Ponca City about the possibility that ConocoPhillips was interested in selling its Ponca refinery to another oil company and getting out of Ponca City especially after ConocoPhillips Chairman and CEO Jim Mulva met with corporate analysts in October 2009 for the ConocoPhillips Q3 2009 Earnings Call and announced that the company's capital budget would decrease by about 12 percent in 2010 and that ConocoPhillips planned to divest $10 billion in refining, exploration, and production assets in a bid to improve its financial position.[90]

At the earnings call on October 29, 2009 Mulva was asked specifically about the possibility that ConocoPhillips might divest itself of some of its refineries and Mulva said that the company was "going through a more strategic assessment [of its refineries] because there are some that are less sophisticated. We will think long-term when the market gets a little bit better about selling some refineries. We think that is going to be subsequent to the next two years for 2012, 2013 and we have in mind a number of facilities that we think might have some value to someone else."[91]

The Tulsa World and the Bartlesville Examiner-Enterprise report that Mulva appeared before a packed house at the Bartlesville Community Center on May 21, 2010 to present the annual company update, talk about ConocoPhillips' plans for the future, and clarify the company's plans for Bartlesville and for the Ponca City refinery.[92]

Mulva told his audience that employees in Bartlesville and Ponca City have little to fear. Although ConocoPhillips announced last year that it was tranferring or eliminating all 700 non-refinery jobs in Ponca City, ConocoPhillips plans to keep the Ponca City refinery with it's 750 employees. "We will retain only the largest and most sophisticated refineries," Mulva said. "Ponca City is a large and sophisticated refinery that is important to our refinery portfolio."[93]

Mulva added that he didn't forsee any change in the 3,100 ConocoPhillips employees in Bartlesville, and that there was actually room to accommodate an additional 800 to 1,000 more employees in Bartlesville. "There's no change in our long-term plans for Bartlesville," Mulva said. "It's a very important global support center for ConocoPhillips."[94]

[edit] "Ponca City Still a Competitive Refinery"

The announcement reinforced a statement made in February 2009 at the time that the announcement was made that ConocoPhillips non-refinery employees in Ponca City would be relocated over the next three years. "The refinery in Ponca City continues to be a competitive refinery," said John A Carrig, President and Chief Operating Officer of ConocoPhillips, when he talked to students as part of the Distinguished Speaker Series at the Michael F. Price College of Business at Oklahoma University. "Like all of our facilities, we are continuing to make investments to enable it to thrive. I don't see any particular change in the outlook for it."[95]

Jim Mulva reiterated in his conference call to financial analysts on July 14, 2011 that in answering a question by Ed Westlake of Credit Suisse that "if we have an alternative to sell one of the less sophisticated refineries in a way, we are not going to delay until this is done accomplishing and doing that."[96][97][98]

[edit] Ponca City and the Spinoff of Phillips 66 in 2012

In 1908 E. W. Marland came to Oklahoma after losing his fortune in the Pennsylvania oil fields in the panic of 1907 and by 1920 had reestablished himself and started the Marland Oil Company and building the Marland Refinery in Ponca City. Marland was a visionary and not only pioneered the use of geophysical techniques in the oil industry but was years ahead of his time as an employer providing housing, loans, medical care, and other benefits for the thousands of employees who worked at his refineries and pipelines. The refinery EW Marland built in Ponca City in 1918 has provided employment, opportunities, and benefits to tens of thousands of citizens of Northern Oklahoma in the almost 100 years since the Marland Refinery in Ponca City was built. Photo: Hugh Pickens
Beginning May 1, 2012, the day Phillips 66 was spun off as a separate downstream company, newspaper ads have appeared daily in the "The Ponca City News" asking that Phillips 66 rename its Ponca City refinery the "Marland Refinery in Ponca City" as a symbol going forward of the partnership between the oil industry and the citizens of North Central Oklahoma that honors the legacy of two great oil pioneers who brought advancement and prosperity to Northern Oklahoma, Frank Phillips and EW Marland.[99][100] Full Disclosure
Archie Dunham Says He Disagrees with Splitting Off Phillips 66 from ConocoPhillips. In 2012, ConocoPhillips split, spinning off its refining, retail, and marketing operations to form Phillips 66, while ConocoPhillips focused on oil exploration and production. Jim Mulva, CEO of ConocoPhillips and architect of the split, said that two independent companies focused on their respective industries would be more competitive. He insisted both were big enough to compete and generated enough cash to invest in their futures. Dunham stayed out of the fray, he said recently. He wrote letters to the board, arguing that an integrated company can use cash from its refining business to fund oil exploration - but he never sent them. According to Hunn, the separation is a decision with which Dunham disagrees, even now. Photo: Wikipedia

[edit] Other Stories About the Ponca City Refinery:

[edit] How the Spinoff Affects Ponca City and Bartlesville

Rod Walton writes in the Tulsa World on April 28, 2012 that with the spinoff, Ponca City may not be affected as dramatically by the split as Bartlesville. Going back to the 2002 merger shows that Bartlesville and Ponca City were affected differently leaving the two cities in different situations today."[101]

Conoco employed nearly 1,900 people in Ponca City at the end of 2001, while Phillips had a workforce of 2,500 in Bartlesville. The ConocoPhillips numbers shrunk to only 750 refinery workers in Ponca City but swelled to 3,500 at the shared services center in Bartlesville. Ponca City is now purely a refining town, with Ponca City having lost all 750 non-refinery jobs during the three-year repositioning plan. "Today, we're a refinery town," said David Myers, executive director for the Ponca City Development Authority. "No doubt about it: the merger was not kind to Ponca City." "The dark humorists in that city used to joke that Ponca City got the first name in the merger but little else," writes Walton. "ConocoPhillips opted to shut down a carbon fibers plant early on and eliminated the rest of the 750 non-refinery jobs beginning in 2009.""[102]

The Bartlesville Examiner-Enterprise editorialized on April 29, 2012 that Jim Mulva has "proven to be a true friend to the City of Bartlesville."[103] According to Rod Walton, Bartlesville was a big beneficiary of the ConocoPhillips merger and seems to have lived a charmed life economically over the past ten years. Although the home of Frank Phillips doesn't employ 9,000 company workers as it did in the early days, the 1,000 employees added since 2002 have kept downtown buildings such as Plaza and Adams full of mid-level computer, credit and other support personnel. But now Bartlesville operations are in flux and there is much uncertainty about the future. "All employees are being moved to one of the two companies, with co-workers who once sat side to side now literally shifted to separate buildings," writes Walton. ConocoPhillips will employ about 1,700 people in the downtown Plaza and Frank Phillips Tower Center buildings and in the Adams warehouse. Phillips 66's Bartlesville workforce will number 1,900 people, housed in the main Adams and Phillips buildings and the Research and Development Center on the west edge of the city.[104] The Bartlesville Examiner-Enterprise reported on April 29, 2012 that the "split or 'repositioning' as it has been called by company officials, has required many existing local employees to shift jobs and even physically move from one building to another within the extensive downtown Bartlesville office complex" adding that "while no one can predict the future with perfect clarity, Bartlesville appears no worse for the wear during this complex process."[105]

ConocoPhillips CEO Ryan Lance and Phillips 66 CEO Greg Garland reassured its employees in Oklahoma in an op-ed they wrote for the Bartlesville Examiner-Enterprise titled "ConocoPhillips, Phillips 66 have deep roots in Bartlesville" that "ConocoPhillips and Phillips 66 together employ nearly 4,500 people in Oklahoma, an increase in recent years. Going forward, we will both maintain Global Services Centers in Bartlesville providing essential finance, information technology and other vital support to our personnel around the world. Elsewhere, Phillips 66 will continue operating the Ponca City Refinery, by far Oklahoma’s largest, and will remain the leading gasoline marketer. ConocoPhillips will continue producing oil and natural gas from the Anadarko Basin and the Panhandle area." Lance and Garland added that "we continue encouraging both current and incoming employees to maintain our proud tradition of community service. Bartlesville is a special place to work, live and raise a family, and we want to help keep it that way. This is an exciting time for ConocoPhillips and Phillips 66. All of our Oklahoma communities are great homes to our people and businesses, and we both look forward to long and bright futures here."[106]

"The Phillips and Conoco merger has taught everyone, Poncans and Bartians alike, to simply expect the unexpected," writes Walton. "In other words, who knows what ConocoPhillips and Phillips 66 will look like 10 years down the road?" "We do have a strong Conoco retiree group that lives here," says Dave Myers. "There's still talk in the community, still those who'd like to go back to the old days. I think most people have moved on."[107][108]

The Bartlesville Examiner-Enterprise reported on September 12, 2012 that Greg Garland visited Bartlesville on September 11, 2012 to speak to the Chamber of Commerce and told members of the chamber that Bartlesville is of strategic importance to Phillips 66. “As we were approaching the repositioning and spinning Phillips 66 out of ConocoPhillips, there was never any question that Bartlesville would continue to be a strategic and important part of our company, in the support of our company operations, for a very long time,” Garland said. Garland added that Phillips is “pretty much at capacity” in Bartlesville. “I don’t see us moving a lot of people into Bartlesville,” he said, adding that Bartlesville will always be a core asset for the company. “There’s not big plans to move in a big section of the workforce. We just don’t have the capacity or the space here today to do that.”[109]

[edit] Visit of Phillips 66 Leaders to Ponca City

On March 27, 2012, the Ponca City News reported that leaders from Phillips 66 visited Ponca City and were met by community leaders.

On the Phillips 66 side were Bob Herman, Future Lead of Health, Safety and Environment; Pete Stynes, Ponca City Refinery Manager; Larry Ziemba, future Lead of Refining, including Projects and Procurement, and President, Global Refining; Chantal Veevaete, future Human Resources; and Tim Taylor, future Commercial, Marketing, Transportation and Business Development.

On the Ponca City side were City Manager Craig Stephenson; Lee Evans, Chair of the Ponca City Area Chamber of Commerce; David Myers, Ponca City Development Authority; Rich Cantillon, Chamber of Commerce/Tourism Bureau; Carl Renfro, community leader; and Larry Murphy, Chair of the Ponca City Development Authority.[110]

Phillips 66 CEO Greg Garland, although originally scheduled to visit Ponca City with his management team, was not able to attend. Ponca City Mayor Homer Nicholson, retired from ConocoPhillips after 38 years service, was also unable to attend.

[edit] Proposal to Rename Phillips 66's Refinery to the "Marland Refinery in Ponca City"

On March 12, 2012 a web site was created asking the management of Phillips 66 to consider honoring EW Marland, the oil pioneer who built the refinery in 1919 and developed the oil industry in North Central Oklahoma by restoring the name of the Phillips 66 refinery in Ponca to its original name, "Marland Refinery in Ponca City," as a gesture of goodwill to the community of Ponca City.

"The Ponca City News" recently announced that with the split of ConocoPhillips into two companies, the ConocoPhillips operation in Ponca City, Oklahoma will soon be renamed Phillips 66.

Frank Phillips, the founder of the Phillips 66 Oil company, was a man who knew how to use his courage and initiative and great administrative ability to create industry and wealth in Oklahoma leaving a legacy in the oil company that bears his name that will always be a monument to his memory.

But there is another Oklahoma oil pioneer who was equally important in developing the oil industry and bringing prosperity and advancement to Northern Oklahoma and that man was EW Marland.

EW Marland pioneered the use of geological techniques in the oil industry and was years ahead of his time as an employer providing housing, loans, medical care, and other benefits for thousands of employees who worked at his refineries and pipelines but Marland lost everything to the powerful JP Morgan banking interests - even losing his name on the oil company that he founded in Ponca City.

It is altogether fitting and proper that Phillips 66 honor the heritage of oil development in Northern Oklahoma by recognizing Frank Phillips and EW Marland.

The executives of Phillip 66 have honored the memory of Frank Phillips by choosing to name their new company for Phillips. We think Phillips 66 should honor the legacy of oil pioneer EW Marland by naming their refinery in Ponca City for Marland, the man who started the refinery and brought advancement and development to North Central Oklahoma.[111]

It would mean a great deal to the residents of Ponca City for Phillips 66 to acknowledge the history and heritage of the oil industry in Oklahoma by honoring these two great oil pioneers, Frank Phillips and EW Marland.

Renaming the refinery the "Marland Refinery in Ponca City" will serve as a symbol going forward of the partnership between the oil industry and the citizens of North Central Oklahoma that honors the legacy of these two great oil pioneers.[112]

A full page advertisement by Phillips 66 announcing its "intent on continually earning the trust of the communities we serve and operating with the highest levels of integrity" appeared in the Ponca City News on May 1, 2012.[113] A quarter-page advertisement congratulating Phillips 66 on its creation and asking Phillips 66 to honor the legacy of EW Marland appeared in the Ponca City News on May 1, 2012.[114][115]

[edit] Archie Dunham Says in 2016 that He Disagrees with Splitting Off Phillips 66 from ConocoPhillips

David Hunn wrote in the Houston Chronicle on September 28, 2016 that sixteen years ago, on his way to a black-tie fundraiser in Oklahoma City, Archie Dunham, then chief executive of the Houston oil company Conoco, stepped out of hotel elevator just as Jim Mulva, his counterpart at Phillips Petroleum of Oklahoma, emerged from another nearby. "Low prices and rising costs were driving a wave of mergers in the industry, including the blockbuster combination of Exxon and Mobil, and leaving smaller companies like Conoco and Phillips vulnerable to takeover," writes Hunn. "Dunham didn't like the idea of getting gobbled by a major oil company; he took the opportunity to broach the idea of a merger - a merger of equals - with Mulva." Big oil companies had been circling Conoco for some time when Dunham found himself in a hotel lobby with Mulva, the Phillips CEO. Dunham, in a recent interview, said Phillips seemed like a good partner to him. They had strengths in different parts of the world that complemented each other, he said, but they also came from essentially the same place. "We felt like our cultures, values, were very similar," Dunham said.

After running into each other at the Renaissance Waterford on that evening in 2000, Dunham and Mulva quickly parted, wary of being spotted together and tipping anyone off to their discussion. But they soon met again, secretly, in Colorado. Alone in a room in the Broadmoor Hotel in Colorado Springs, they talked for four hours about business, family and values. A few months later, on a stormy day in November 2001, the two men met in Tulsa, Okla. to announce the merger that would create world's sixth biggest integrated oil company. The new firm would have $50 billion in revenues, $60 billion in assets, 8.7 billion barrels in oil reserves and 58,000 employees worldwide. Dunham persuaded Mulva to name the new company ConocoPhillips, and keep it headquartered in Houston. The city's easy access to international flights made the decision practical. "Besides, I was a Houstonian," Dunham said. "I wanted Houston to have the headquarters." In exchange, Dunham took the chairman slot; Mulva became chief executive.

Dunham retired in 2004. In 2012, the company split again, spinning off its refining, retail, and marketing operations to form Phillips 66, while ConocoPhillips focused on oil exploration and production. Mulva, still CEO then, said that two independent companies focused on their respective industries would be more competitive. He insisted both were big enough to compete and generated enough cash to invest in their futures. Dunham stayed out of the fray, he said recently. He wrote letters to the board, arguing that an integrated company can use cash from its refining business to fund oil exploration - but he never sent them. According to Hunn, the separation is a decision with which Dunham disagrees, even now.[116]

[edit] News from the Ponca City Refinery

[edit] Introduction

Statue of E. W. Marland on the Town Square of Ponca City. Photo: Hugh Pickens

In 1908 E. W. Marland came to Oklahoma after losing his fortune in the Pennsylvania oil fields in the panic of 1907 and by 1920 had reestablished himself and started the Marland Oil Company building the Marland Refinery in Ponca City, Oklahoma. Marland was a visionary and not only pioneered the use of geophysical techniques in the oil industry but was years ahead of his time as an employer providing housing, loans, medical care, and other benefits for the thousands of employees who worked at his refineries and pipelines. The refinery EW Marland built in Ponca City in 1918 has provided employment, opportunities, and benefits to tens of thousands of citizens of Northern Oklahoma in the almost 100 years since the Marland Refinery in Ponca City was built.

This report contains news and commentary about Ponca City, the Ponca Refinery, E. W. Marland and his legacy, Phillips 66 and other Phillips 66 refineries around the world, ConocoPhillips, and the petroleum industry in Oklahoma.

[edit] Other Stories About the Ponca Refinery:

[edit] Latest News about Phillips 66 and the Ponca Refinery

[edit] January 15, 2017: 400 Activists Protest Phillips 66 Funded Bayou Bridge Pipeline at Public Hearing

400 Come Out to Protest Phillips 66 Funded Bayou Bridge Pipeline. “This is like 50 times the amount of people we have at most of these meetings,” said Scott Eustis, adding that the proposed pipeline was “the biggest and baddest I’ve seen in my career”. Photo: Desmogblog
400 Come Out to Protest Phillips 66 Funded Bayou Bridge Pipeline. The Bayou Bridge Pipeline, if approved, would carry 480,000 barrels of oil per day a final 162 miles across the state to refineries and ports, through eight watersheds and long stretches of fragile wetlands. Graphic: Phillips 66 Investor Presentation, September 2015

The Guardian reported on January 15, 2017 that Scott Eustis, a coastal wetland specialist with the Gulf Restoration Network, was surprised to be joined by more than 400 others when he attended a public hearing in Baton Rouge about the Bayou Bridge Pipeline, a pipeline extension partially funded by Phillips 66 that would run directly through the Atchafalaya Basin, the world’s largest natural swamp. “This is like 50 times the amount of people we have at most of these meetings,” said Eustis, adding that the proposed pipeline was “the biggest and baddest I’ve seen in my career”. The Bayou Bridge Pipeline, if approved, would carry 480,000 barrels of oil per day a final 162 miles across the state to refineries and ports, through eight watersheds and long stretches of fragile wetlands.

At the public hearing in Baton Rouge on Thursday, the first speaker, Cory Farber, project manager of the Bayou Bridge pipeline, said it was expected to create 2,500 temporary jobs. When Farber then said the project would produce 12 permanent jobs, the crowd laughed heartily. “Those who have airboat companies and equipment companies that specialize in putting in equipment, they’re not opposed to pipelines because of the short-term jobs,” said Jody Meche, president of the state Crawfish Producers’ Association, one of dozens who spoke at the hearing. “But once that pipe is in there, the jobs are gone.”

Debate was fierce. Pro-pipeline speakers – oil industry reps, state representatives, a retired Louisiana State University professor – pointed out that many pipelines already run through the Atchafalaya Basin and said pipelines were in general the safest way to transport oil – in the case of the Bayou Bridge pipeline, 280,000 barrels per day of crude to the Gulf coast region, with the potential for 480,000. Where most in attendance worried about potential oil spills and their effect on drinking water, Meche was more concerned with ways existing pipelines have, he said, “crippled” the fishing industry. “They excavated the trench that they put the pipe in and then [they didn’t clean up] and it leaves a dam behind that blocks the water flow,” he said on the microphone, “until there’s not enough oxygen in the water for the crawfish, the fish, or anything.”

Native Americans dotted the crowd, many of them fresh from Standing Rock. “The Native Americans in North Dakota get a lot of credit for showing people their power,” Eustis said. Lifelong Iberia Parish resident Andrea Kilchrist, 71, described the violence she had witnessed at Standing Rock: peaceful protesters battered with sonic grenades, tear gas, mace, and cannons. “If you think this company is not going to do the same thing here?—?it’s going to do the same thing here,” she warned the room. “I hate pain. I’m afraid of pain and broken bones,” she continued, her voice shaking. “But on that first day, if y’all give that permit, I will be sitting in front of a bulldozer.”

As activists see it, Louisiana residents are starting to really care about environmental issues and, more importantly, to make themselves heard. “A lot of times we don’t get this opportunity to speak up,” said Eustis, still admiring the surprisingly large crowd. “[These oil companies] want to just roll over us. “But after Katrina, and the BP spill, and the Baton Rouge flood last year – 100,000 people displaced from their homes because of climate change – I guess we’re finally just sick of this.”[117][118]

[edit] January 15, 2017: Phillips 66 Bayway Refinery Donates $30,000 for Nature Outpost

Tapinto reported on January 15, 2017 that Phillips 66 Bayway Refinery has donated $30,000 to fund an outdoor pavilion and associated activities at Phil Rizzuto Park that will serve as a headquarters for learning about ecology and the need to preserve nature in urban communities. "Phillips 66 is proud to sponsor projects that protect and enhance the environment and add benefits to our local communities," said Nancy Sadlon, manager, Phillips 66 Bayway Refinery Public Affairs. “The County of Union is proud to partner with Groundwork and Phillips 66 to promote environmental education in one of the state’s most populated regions,” said Freeholder Chairman Bruce H. Bergen.[119]

[edit] January 13, 2017: Phillips 66 Pays Multi-Million Dollar Settlement for Alleged "Double-Dipping" into Oklahoma's Petroleum Storage Tank Cleanup Fund

Details Emerge in Deal to End Multi-Million Dollar Lawsuit by State of Oklahoma against Phillips 66 for Alleged "Double-Dipping" into a Petroleum Storage Tank Cleanup Fund. The state of Oklahoma received $2.8 million and an outside law firm working on contingency for Oklahoma Attorney General Scott Pruitt received $942,000 from a little-publicized settlement with Phillips 66 over alleged "double-dipping" into a petroleum storage tank cleanup fund. Photo: Cleanup work on removing old underground storage tanks that held petroleum products. EcologyWA Flickr Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

NewsOK reported on January 13, 2017 that the state of Oklahoma received $2.8 million and an outside law firm working on contingency for Oklahoma Attorney General Scott Pruitt received $942,000 from a little-publicized settlement with Philips 66 over alleged "double-dipping" into a petroleum storage tank cleanup fund. Pruitt's lawsuit alleged Phillips 66 had collected money from the indemnity fund even after it used private insurance proceeds for the environmental remediation. Pruitt, who typically issues news releases touting legal victories, didn't publicize the settlement award or issue a news release. The only public mention of it came in meeting minutes at the Oklahoma Corporation Commission. The settlement agreement doesn't specify how much of the award went to the outside law firm, only that "the Oklahoma attorney general shall be responsible for paying any attorney fees." The Phillips 66 case and others like it have been touted by Pruitt supporters as an example of the attorney general being willing to go after energy companies. Related lawsuits against BP and Chevron over indemnity fund payments were filed by his predecessor in late 2010.[120]

Phillips 66 previously paid $2 million in 2014 to settle allegations it helped itself to Utah’s Petroleum Storage Tank Fund for cleaning up damage from leaking fuel storage tanks even though it had insurance to cover the cleanups. Phillips was said to have relied on the fund for cleanups at 82 service stations. "Consistently, these guys were saying, ‘No, we don’t have any insurance,'” said Therron Blatter, a branch manager for underground storage tanks at the Utah Division of Environmental Response and Remediation. “Clearly, they did have the insurance.”[121]

According to the Salt Lake City Tribune Phillips 66 was accused of defrauding the Utah’s Petroleum Storage Tank Fund to the tune of $25 million for cleanups associated with leaking underground tanks. In its lawsuit filed in 2012, the division alleged ConocoPhillips collected $25 million in payouts to cover cleanups at 82 service stations by falsely reporting that these sites were not covered by independent insurance. The suit sought to recover this money, plus punitive damages and fines totalling $10,000 for every day ConocoPhillips violated the law. But as lawyers gathered evidence it became apparent some of the claims were not that strong, said Brent Everett, director of the state Division of Environmental Response and Remediation. Officials said they are satisfied with the $2 million settlement, which amounts to less than 10 percent of what they originally claimed was misappropriated.[122][123]

[edit] January 12, 2017: Showdown Looms Over Phillips 66 Funded Bayou Bridge Pipeline

The Greater Baton Rouge Business Report reported on January 12, 2017 that the $750 million Bayou Bridge Pipeline project being jointly pursued by subsidiaries of Phillips 66, Sunoco Logistics and Energy Transfer Partners, will face off against environmentalists at a public hearing on January 12, 2017 over the proposed 162-mile Bayou Bridge pipeline, which, if approved, will run from Lake Charles through the Atchafalaya Basin to St. James Parish. Advocates of the project are expected to argue that pipelines are the safest, most environmentally friendly and cost effective way to transport oil, noting also that the proposed pipeline will join an existing network of pipelines crisscrossing the state. “This is not the first pipeline that will run through the Atchafalaya,” says Tommy Foltz, executive vice president of the Consumer Energy Alliance.

But environmentalists are expected to take issue with the claim that pipelines are safe. Anne Rolfes with the Louisiana Bucket Brigade, who will be among those attending tonight’s hearing, notes that Louisiana had 144 pipeline accidents in 2016. “Our pipelines are falling apart,” Rolfes says. “They are leaking. They have holes in them. They are rusty and corroded. Our state should be forcing industry to repair the current pipelines rather than permit a new one.” The state should also be exploring alternative fuel sources like solar and wind energy, which represent the economic development opportunities of the future, Rolfes says. “One of the fastest growing sectors of job growth is in renewable energy and we’re dealing with these guys who are stuck thinking about fossil fuels,” she says.[124]

[edit] January 12, 2017: Six Environmental Groups Join Against Phillips 66 Lawsuit Regarding Santa Maria Rail Project

Edhat Santa Barbara reported on January 12, 2017 that six environmental groups were granted permission to intervene in a lawsuit brought by Phillips 66, challenging the San Luis Obispo County Planning Commission's denial of the company's proposal to construct a crude oil train terminal for the Santa Maria Refinery. Phillips 66's lawsuit challenges the Planning Commission's determination that the site for the proposed oil train terminal contains rare and valuable habitat that is protected under the California Coastal Act and the County's local policies and ordinances. In granting the motion to intervene, the court ruled that the groups have an interest in protecting the environment as well as an interest in participating in further hearings on the project. The court allowed the environmental groups to join the lawsuit so that they could "continue to participate in and protect the environmental review process" as it relates to the Phillips project and the determination that the project would impact environmentally sensitive habitat. Now that the environmental groups are parties to the lawsuit, they plan to file a motion asking the court to dismiss the case as premature. The hearing on that motion is scheduled for February 16, 2017.[125]

[edit] January 10, 2017: Darren Cunningham Replaces Julian Stoll as New Refinery Manager at Phillips 66's Humber Refinery

Phillips 66's Humber Refinery in North Lincolnshire. Darren Cunningham has been appointed as the new refinery manager at Phillip 66's Humber Refinery replacing Julian Stoll. Under Stoll's tenure, Humber Refinery completed a mega-turnaround, a feat unlikely to be seen again, as the largest shutdown in the site's near 50-year history was twinned with the replacement of the crude oil reception pipeline beneath the Tetney coastline. Photo Credit: Wikipedia David Wright Creative Commons Attribution Share-alike license 2.0

The Grimsby Telegraph reported on January 10, 2017 that Darren Cunningham has been appointed as the new refinery manager at Phillip 66's Humber Refinery replacing Julian Stoll. Cunningham has previously been the refinery manager at Bayway Refinery for the past four years and returns to Humber after previously serving as operations manager for Humber Refinery until 2008. Cunningham will be Humber's fourth refinery manager in little over four years, following Julian Stoll, Brian Coffman and Mike Wirkowski, who left in 2012.

Stoll has been promoted to regional vice president for refining and will be relocating to Phillips Headquarters in Houston, Texas. Under Stoll's tenure, Humber Refinery completed a mega-turnaround, a feat unlikely to be seen again, as the largest shutdown in the site's near 50-year history was twinned with the replacement of the crude oil reception pipeline beneath the Tetney coastline. Following the huge projects, timed to coincide, Humber was named number one business unit in the entire Phillips 66 portfolio, recognizing operational excellence. At the time of the award, Mr Stoll said: "It was a tremendous performance. We shut down the most complex UK refinery, repaired it, brought it back online and ran for the rest of the year without any serious process issue. I've never seen that before, it was really world class performance. It was very fulfilling."[126]

[edit] January 4, 2017: DCP Midstream And DCP Midstream Partners Merge

Nasdaq reported on January 4, 2017 that DCP Midstream, a 50/50 joint venture between Phillips 66 and Spectra Energy, and DCP Midstream Partners, announced that they have signed and closed a transaction combining all of the assets and debt of DCP Midstream with DPM, simplifying the corporate structure and creating the largest natural gas liquids or NGL producer and gas processor in the United States.

The new company (DPM) will construct a new 200 MMcf/d cryogenic natural gas processing plant (Mewbourn 3) in the DJ Basin, its tenth plant in the basin, projected to be in service by the end of 2018. Additionally, DCP collaborated with several key producers to form a cooperative development plan which provides a framework to add another 200 MMcf/d plant by mid-2019. Together, these projects will increase capacity by 50 percent to 1.2 billion cubic feet per day to support growing processing needs of producers. DPM will also complete the next phase of its Grand Parkway low pressure gathering project and associated compression expansions by the end of 2018.

DPM is in the process of constructing additional field compression and plant bypass infrastructure that will add approximately 40 MMcf/d of incremental capacity during the summer of 2017. The new plants will connect to the Front Range Pipeline, one-third owned by DPM, for NGL takeaway to Mont Belvieu, Texas. Total capital investment for the plant and associated gathering is expected to be up to $395 million.

DPM will expand NGL takeaway capacity on Sand Hills Pipeline by 30 percent, or 85,000 barrels per day (BPD) to 365,000 BPD, through the addition of four pump stations and a pipeline loop (Sand Hills expansion) to meet NGL production growth from owned and third party plants in the Delaware Basin.[127]

DCP Midstream previously announced in April, 2016 they were eliminating 300 positions nationwide. After the 300 cuts, DCP will still employ about 2,900 overall. In a prepared statement, DCP Chairman and CEO Wouter van Kempen said the joint venture reduced its 2016 capital budget down to $250 million. In comparison, Phillips 66’s contribution alone to DCP’s capital budget last year was $550 million. Van Kempen noted DCP completed most of its capital construction program last year. “This is a challenging environment that we are managing through and we continue to execute on our strategy to reset our break-even cost to ensure we are the most reliable, safe, low-cost midstream services provider sustainable in any environment,” van Kempen said in a prepared statement.[128]

In September, 2015 Spectra Energy and Phillips 66 announced they would attempt to prop up their troubled natural gas liquids joint venture with $1.5 billion in cash and a share of two pipelines. DCP Midstream has been in trouble since last year as prices for the fuels have fallen and Spectra and Phillips 66 pushed DCP Midstream into a corporate restructuring earlier this year. In February, DCP Midstream announced plans to cut about 20 percent of its corporate staff and consolidate much of its remaining workforce in Denver and Houston. The latest transaction is intended to shore up the company’s balance sheet and ease its access to credit, the two companies said in the announcement. “The contribution of the one-third interests in Sand Hills and Southern Hills will diversify DCP Midstream by enhancing the balance of fee-based assets while building on the re-contracting work already underway,” said Greg Ebel, chairman and CEO of Spectra Energy, in a written statement.[129]

[edit] December 29, 2016: Seven Rail Cars Overturn at Phillips 66 Wood River Refinery

The Belleville News-Democrat reported on December 29, 2016 that seven cars overturned at the Wood River Refinery in Roxana on Thursday morning, spilling about one gallon of acid that was quickly contained, according to officials. “We are monitoring the area, and there are no injuries or impacts to the community. Refinery operations are not impacted,” read a statement from Wood River Refinery. Norfolk Southern spokesman Dave Pigeon said the material that leaked was a waste product from the refining process known as spent sulfuric acid. It can eventually be recycled and reused, he said, but is transported as hazardous materials. There were seven cars derailed in the incident, Pigeon said, with five cars that came to rest on their sides while two remained upright. As of 3:30 p.m., Norfolk Southern workers had uprighted three of those five cars.[130]

[edit] December 29, 2016: Standing Rock Activists Target Profits of Phillips 66 Funded Dakota Access Pipeline

The Guardian reported on December 29, 2016 that Native American activists are targeting the Dakota Access pipeline’s finances in an effort to further strain the oil corporation and cause continuing delays that they hope could be disastrous for the project focusing on an approaching January 1, 2017 deadline that the operator, Energy Transfer Partners (ETP), has cited in court records. ETP wrote in a filing this year that the pipeline “committed to complete, test and have DAPL in service” by the start of 2017. And if the company did not meet its contract deadline, then its shipping partners had a “right to terminate their commitments”. But in emails to the Guardian, DAPL spokeswoman Vicki Granado claimed that January was just an “initial target” and not a “contractual date”, which is “much later”, though she refused to say when. Her statement, which contradicts the company’s official court testimony on multiple occasions, has prompted accusations that the corporation has either committed perjury or is lying to reporters. Regardless of the significance of the January date, opponents of the project argued that the continuing suspension of the project is already having a big impact on the ETP’s bottom line.

The financial challenges for Energy Transfer come at a time when the company is already in a precarious economic situation due to broader industry trends, analysts said. Global oil prices began to collapse in 2014 after shippers committed to DAPL, and production in the Bakken Shale oil field has fallen, which has created major hardships for drillers, according to the recent Ieefa report. That means the existing pipeline infrastructure may be adequate to handle regional oil production, and that if the contract deadline does expire, shippers could be eager to pull out or renegotiate favorable terms.

LaDonna Brave Bull Allard, a Standing Rock tribe member who owns land where one of the main camps remains in place, said the DAPL corporation was “panicking” about its finances and misleading the public. The company should not be trusted, she said, noting that the construction site was being monitored to ensure that DAPL workers do not start drilling under the Missouri river, which provides the tribe’s water supply. “We are preparing because we know we have a fight on our hands. We will be standing our ground no matter what.”[131]

Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.

[edit] December 29, 2016: U.S. Refiners Face Severe Labor Shortage For Deferred Maintenance

U.S. Refiners Face Severe Labor Shortage For Deferred Maintenance. A recent survey found that 74 percent of Texas contractors are having trouble filling hourly craft worker positions, and a majority of them believed they would continue to struggle over the next year. Photo: State Library of Victoria College Flickr Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Reuters reported on December 29, 2016 that refiners are now competing for pipe fitters and ironworkers with a host of billion-dollar energy projects, including Cheniere Energy's liquefied natural gas export terminals and a new petrochemical unit for Dow Chemical and without undertaking the work they need, refineries run the risk of more unscheduled outages at plants. "Putting off work definitely affects the safety of the refinery," said Ed Lee, an independent refinery safety consultant. U.S. refiners are expected to spend $1.26 billion on planned maintenance next year, up 38 percent from this year and the highest level since at least 2010 as a spate of unexpected outages have hit refineries nationwide, taking hundreds of thousands of barrels off the market and boosting gasoline prices and margins. "Refiners are going to have trouble finding even the lowest skilled workers, such as scaffold builders, and you can't do work at a refinery without a scaffold," said said Anthony Salemme, a vice president at IIR. "That's going to complicate scheduling and even extend outages." According to IIRC the coastal region from Brownsville, Texas to New Orleans - the largest U.S. refining region - will be short roughly 37,400 craftsman needed to complete all of the planned capital projects in 2017. "We are definitely feeling the labor shortages in skilled craft labor," said Paul Tooze, construction manager for the oil, gas and chemicals business at Bechtel.

A recent survey conducted by the Associated General Contractors of America found that 74 percent of Texas contractors are having trouble filling hourly craft worker positions, and a majority of them believed they would continue to struggle over the next year. More than 60 percent of the respondents said they bumped up salaries to attract more skilled craft workers. "These shortages have the potential to undermine broader economic growth by forcing contractors to slow scheduled work or choose not to bid on projects, thereby inflating the cost of construction," said Stephen Sandherr, head of the Associated General Contractors.[132]

Phillips 66 recently announced that the Ponca Refinery is beginning the largest turnaround since 2011 which at its peak will involve more than 1,000 contract laborers from approximately 35 different companies. The turnaround requires a large monetary investment from the company and there is a large outlay of dollars spent in the Ponca City community as contract laborers will fill hotel and motel rooms, RV parks, and rental properties and will spend money throughout the community. [133]

[edit] December 23, 2016: Enbridge Stalls on Purchase of Stake in Phillips Funded Dakota Access Pipeline

The Duluth News Tribune reported on December 23, 2016 that Enbridge Energy Partners L.P. and its joint venture partner Marathon Petroleum Corp. now have until March 31, 2017 to back out of a deal to purchase a stake in the Dakota Access Pipeline, according to a recent Securities and Exchange Commission filing. The previous deadline to terminate the sale was December 31, 2016. The Enbridge/Marathon purchase was announced August 2, 2016 just before pipeline protests erupted around a river crossing north of the Standing Rock Reservation. SEC filings show the joint venture is to pay $2 billion for a 49 percent interest in Bakken Holdings Co. LLC, a subsidiary of Energy Transfer Partners and Sunoco Logistics Partners that owns 75 percent of the Dakota Access pipeline. Phillips 66 owns the remaining 25 percent of the Dakota Access Pipeline. None of the companies involved cite a reason to push back the termination date in SEC filings, though uncertainty over the project’s future could play a part.[134] "If Enbridge and Marathon thought that completion of the pipeline was a done deal, the money would have been a done deal too," said Energy analyst Antonia Juhasz. "This means they are worried and are not feeling secure enough to turn over their cash, putting even more financial pressure on Energy Transfer Partners."[135]

[edit] December 23, 2016: Phillips 66 Alliance Refinery Donates $65,000 to Sorrento Fire Department

The Creole reported on December 23, 2016 that Phillips 66 recently donated $50,000 to the Sorrento Fire Department to help with both aging equipment and losses suffered during the August flood with some of the money used to replace a 20-year-old fire truck by matching a grant. Several assets in south Louisiana, including a Sorrento salt cavern in the McElroy Swamp, were acquired by Phillips 66 earlier this year.[136]

[edit] December 20, 2016: Phillips 66 Donates $35,000 to Amarillo Police for Training

Myhighplains reported on December 20, 2016 that Phillips 66 Amarillo Pipeline Division has made a grant of $35,000 to the Amarillo Police Department to provide updated supervisory and leadership training to police supervisors.[137]

[edit] December 19, 2016: Vallejo Mayor Wants Phillips 66 and Other Refiners to Pay for Air Monitoring Equipment After Oil Spill in San Pablo Bay

KQED reported on December 19, 2016 that incoming mayor of Vallejo is calling on Phillips 66, Valero, Shell, and Tesoro to foot the bill for new air monitors for five Bay Area cities that sit near local refineries after a mysterious odor sickened dozens of Vallejo residents around the same time an oil spill was discovered in San Pablo Bay in September. The U.S. Coast Guard’s investigation into the oil spill concluded that the spill came from either the marine terminal for Phillips 66 Rodeo refinery or an oil tanker that was unloading crude there. “I think as a good neighbor, Conoco Phillips 66 should be concerned about providing air quality monitors to the surrounding communities,” said Mayor-elect Bob Sampayan. “I want to see a more expanded role with the oil companies in providing information should we have this kind of incident occur again.” A spokesman for Phillips 66 did not respond to a request for comment, and a representative for the Western State Petroleum Association said the industry group has no comment.[138]

[edit] December 18, 2016: Pickens Sponsor First Formal Dinner in E. W. Marland's Private Dining Room at the Mansion in 75 Years

Pickens Sponsor First Dinner in Marland Estate Formal Dining Room in 75 Years. Guests at the First Dinner Served in E. W. Marland's Formal Dining Room in 75 Years included (from left to right) Mary Gierek, District Attorney Brian Hermanson, Ruslyn Hermanson, Deloris Pickens, Dr. S. J. Pickens, Joseph Gierek. Hugh Pickens, Marcia Keathly, David Keathly, Barbara Rozell, Ponca City Mayor Homer Nicholson, and Diane Anderson of Phillips 66. Photo: Leslie Schauviliege

The Ponca City News published a paid article on December 18, 2016 about a formal dinner that took place in E. W. Marland's private dining room at the Marland Mansion. A party of twelve guests were served dinner in the formal dining room on December 10, 2016 courtesy of Hugh Pickens and Dr. S. J. Pickens, the signature sponsors of this year's Gala at the Mansion supporting the Marland Mansion Estate Foundation. Dinner has not been served in the Marland's private dining room at the Mansion since Mr. Marland's passing in 1941. Although Marland lost his oil company to banking interests in the 1920's and closed the mansion, he would reopen the “Palace on the Prairie” to parties and formal dinners during his tenure as Governor of Oklahoma from 1935 to 1939. "We are honored to have the opportunity to sponsor the Marland Gala this year," said Pickens, "and especially honored to be the first guests to have dinner in E. W. Marland's formal dining room in over 75 years."

Terron Liles, Chairman of the 2016 Marland Gala, made every effort to create the ambiance of a formal dinner just as it would have been served in the 1920’s when Marland was building his vast oil empire. Marland was an Anglophile, so dinner was served Downton Abbey style just as it would have been served to Marland and his guests. Wait staff dressed as footman and maids in formal attire served the meal with grace and elegance. "We want to express our sincere gratitude to the Pickens for being our major sponsor for the 2016 Gala," said Terron Liles, Chairman of the Marland Foundation, “and we want to thank them for their generosity toward the Marland Gala, The Marland Estate Foundation and the Marland Mansion as a whole." “My husband and I would like to thank Terron Liles, the organizer of the Gala, David Keathly, Executive Director of the Marland Estate, our guests, and those who prepared and served the food throughout the night, and everyone else associated with the Gala,” said Dr. Pickens. “This has truly been a night to remember that we will treasure for the rest of our lives.”[139]

[edit] December 16, 2016: Phillips 66 Awards Three Grants to City of Ponca City for $120,000

The Ponca City News reported on December 16, 2016 that Phillips 66 has award three grants to the city of Ponca City for a total of $120,000 intended to enhance the environment and safety of the community. A $60,000 Pillar of Safety grant will be used to purchase and install musical-themed playground equipment at Garfield Park. A $30,000 Pillar of Safety grant will be used to purchase mobile repeaters for the City of Ponca City’s public safety communication radio system in order to enhance public safety and emergency operations. A $30,000 Pillar of Environmental grant will be used to purchase and distribute dual smoke and carbon monoxide battery operated detectors that will be distributed on a first come, first serve basis to income-qualifying homeowners.[140]

The Ponca City News reported on December 21, 2016 that in addition to the three grants already announced on December 16, 2016 Phillips 66 is contributing two additional grants for a total of $165,000. The grants include a pillar of Safety grant to McCord School for installation for protection to ensure safety for the children on the playground and a pillar of education and literacy a grant to Ponca City High School to help grow the robotics program, which will benefit from funding to help students with materials and components and help defray the cost of competitions.[141]

[edit] December 16, 2016: Phillips 66's Freeport LPG Export Terminal is Now Fully Operational

Businesswire reported on December 16, 2016 that Phillips 66's Freeport LPG Export Terminal located in Freeport, Texas, is fully operational. The company loaded its first contracted cargo on the Commander, a very large gas carrier that departed the terminal on December 16. “The startup of the Freeport LPG Export Terminal is the culmination of a four-year effort to develop a new U.S. Gulf Coast natural gas liquids (NGL) market hub that also includes Phillips 66 Partners’ 100,000 barrel-per-day Sweeny fractionator and 7.5 million barrel Clemens storage facility,” said Greg Garland, chairman and CEO of Phillips 66. “The new liquefied petroleum gas (LPG) export terminal gives customers the ability to place multi-grade LPG products directly into global markets through Port Freeport, which provides immediate blue water access with minimal congestion.”

The Freeport LPG Export Terminal can simultaneously load two ships with refrigerated propane and butane at a combined rate of 36,000 barrels per hour. Supply is sourced from the Phillips 66 Partners’ Sweeny fractionator and Clemens storage facility, which is connected by pipeline to the Mont Belvieu Hub.[142]

[edit] December 15, 2016: Osage Nation Wants to Increase Oil and Gas Production

The 'Million Dollar Elm' was in front of the County Courthouse in Pawhuska, Oklahoma. Millions of dollars were bid for oil rights in Osage County beneath the tree in the 1920s, thus its designation as the "Million Dollar Elm." In 1970 the Oklahoma Petroleum Council and the Oklahoma Historical Society dedicated a monument to the elm. Although the tree died of Dutch elm disease during the early 1980s and was cut down, its memory remains. Photo: Rex Brown Flickr Creative Commons Attribution-NoDerivs 2.0 Generic (CC BY-ND 2.0)

Oil and Gas 360 published an article on December 15, 2016 about the history of mineral rights and oil and gas production in the Osage Nation since 1870 when the remainder of Osage land in Kansas was sold and the proceeds used to relocate the tribe to Indian Territory. According to the article the Osage Nation has a long history of smart deal making and being expert negotiators. “By their delays in agreeing to removal, the Osage benefited by the change in administration; they sold their lands to the administration of President Ulysses S. Grant, for which they received $1.25 an acre rather than the 19 cents previously offered to them by the US.” The Osage were one of the few American Indian nations to buy their own reservation, and they retained more rights to the land and sovereignty as a result. Unlike its arrangements with other Native American tribes, in 1906, the U.S. Congress reserved the entire Osage Minerals Estate for the benefit of all of the Osage members.

“Already rich from leases of their grazing lands, the Osage grew exponentially more wealthy after the discovery of oil on their lands. In 1895 Henry Foster of Kansas acquired a blanket lease that covered the entire Osage Reservation, more than 1.5 million acres—the ‘Foster lease’. Over the next two decades the Osages’ ‘underground reservation’ would produce more wealth than had all of the American gold rushes combined.” Unlike other landholders, the Osage were able to retain collective ownership of subsurface mineral rights, rather than having to accept allotments to individual owners. Instead, tribal members received ‘headrights’ that assured them an equal share of mineral rights.

The Osage Nation has been vocal about getting the U.S. government to speed up oil and gas permitting on its reservation. In March of 2016, a delegation of tribal councilmembers testified before the U.S. House of Representatives Appropriations Committee, Subcommittee on Interior, Environment and Related Agencies, chaired by Oklahoma Congressman Tom Cole. The Osage councilmembers testified as follows: “Congress called us Headright Owners. Each Headright Owner had one share of royalty from the production of oil and gas in the Osage Minerals Estate. The Osage Minerals Estate has been producing oil since 1896, making it one of the oldest fields in the United States. Our Minerals Estate contains proven reserves. In 2015, it was estimated that our Headright owners would receive about $13.6 billion in royalties from 2012 to 2027. That’s about $1 billion a year."

Everett Waller, chairman of the Osage Nation Minerals Council, is one Osage tribal member and a former Bureau of Indian Affairs employee who is doing everything in his power to remove the federal agency’s roadblocks to new drilling on Osage lands. "We’re going to use the new 3D technology just like they’re going to use on the old fields in Texas. The projections there are through the roof. I have some of the largest dome caps in the world here, and if we can find one out of the three they predict are here, we’re going to be in business. I’m going to have all workovers ready to go, and if we have to, we’ll go to court to get the permitting done. I believe the new technology is going to bring us new production, and that’s going to be the key to survival here."[143]

[edit] December 13, 2016: Protesters of Phillips 66 Funded Dakota Access Pipeline Say 176,000 Barrel Oil Spill in western North Dakota 'Validates Struggle'

176,000 gallons of crude oil spilled went into the Ash Coulee Creek, just 150 miles from the Dakota Access pipeline protest camp. North Dakota officials estimate that more than 176,000 gallons of crude oil has leaked from the Belle Fourche Pipeline over the past week into the Ash Coulee Creek in western North Dakota validating the concerns of those who spoke out against the project for months, activists said. "The spill gives further credence to our position that pipelines are not safe," said Tara Houska, a Native American environmental activist who has resided at the camp since August. "Oil companies' interest is on their profit margins, not public safety." Photo: Jennifer Skjod/North Dakota Department of Health

NBC News reported on December 13, 2016 that North Dakota officials estimate that more than 176,000 gallons of crude oil has leaked from the Belle Fourche Pipeline over the past week into the Ash Coulee Creek in western North Dakota validating the concerns of those who spoke out against the project for months, activists said. "The spill gives further credence to our position that pipelines are not safe," said Tara Houska, a Native American environmental activist who has resided at the camp since August. "Oil companies' interest is on their profit margins, not public safety." One of the protesters' central arguments for months has been that, despite assurances from Energy Transfer Partners — the Dallas-based company funding the $3.7 billion project — an oil spill would be inevitable. And the Standing Rock Sioux Tribe believes that a spill would devastate the Missouri River, which is the main water source for the tribe. In an interview last month, Energy Transfer Partners CEO Kelcy Warren told NBC News that he could not assure the tribe that an oil spill could not potentially occur. Warren would only say that the Dakota Access Pipeline was prepared to withstand such an event. "They can say they have all the latest technologies to safeguard against a leak," Standing Rock Sioux Chairman Dave Archambault II told NBC News. "But when that leak happens, and it will, all those safeguards will go out the window."[144]

The leaking segment of the pipeline was built in the 1980s. Since then, construction materials and pressure monitoring equipment have improved, and tighter regulations have been put in place. "It's hard to compare one company, especially one that has had a pipeline in the ground for maybe 40 or 50 years, to a brand new pipeline," says Carl Weimer, executive director of the nonprofit Pipeline Safety Trust. "It's not just the old ones that fail, new ones can fail also." Since 2010, according to data from the Pipeline and Hazardous Materials Safety Administration, operators have reported about 200 crude oil spills per year, on average. Most of them are comparatively small — think a few bathtubs full or less. The Belle Fourche pipeline leak is the largest in North Dakota since 2013. But the same company that owns and runs the pipeline was involved in another oil spill in Montana in 2015 that leaked 30,000 gallons of crude into the river. At one point, tests showed traces of oil in the local drinking water. Still, generally these incidents are low probability, high impact events, and John Stoody with the Association of Oil Pipelines says they remain the most efficient way to go. "They're also the safest way to move crude oil and petroleum around," says Stoody.[145]

Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.

[edit] December 12, 2016: Donald Trump Says He'll Solve the Dakota Access Pipeline Question

UPI reported on December 12, 2016 that President-elect Donald Trump promised quick action on the Dakota Access oil pipeline if it's not "solved" by the time he's scheduled to take office in January. "Let me not answer the Dakota [oil pipeline question] because perhaps that'll be solved by the time I get there, so I don't have to create enemies on one side or the other," Trump told Fox News. "But I will tell you when I get to office, if it's not solved, I'll have it solved very quickly." Trump did not elaborate on what "solved" implied.[146]

[edit] December 9, 2016: Phillips 66 Cuts Capital Spending by 25 Percent in 2017

Fuelfix reported on December 9, 2016 that Phillips 66 will cut its capital spending by 25 percent next year, spending $2.7 billion in capital spending in 2017 — not counting joint ventures — with nearly $1.5 billion going to pipeline and terminal projects, and more than $900 million toward refining improvements. “The reduction in capital spending from prior years reflects that fewer projects meet our return thresholds in the current business environment,” Phillips 66 Chairman and CEO Greg Garland said in a prepared statement, noting an ongoing emphasis on share buybacks and investor dividend growth. One of the big 2017 projects is completing the Bayou Bridge Pipeline from its Beaumont terminal to St. James, La. Only the Louisiana portion of construction remains. Phillips 66 also will spend another $1.1 billion next year on joint ventures like Chevron Phillips Chemical and DCP Midstream. Chevron Phillips next year will complete its U.S. Gulf Coast Petrochemicals Project near Houston to produce much more chemicals and plastics from Baytown and Sweeny.

Phillips 66 is also a 25 percent owner of Energy Transfer Partners’ Dakota Access project. According to the NY Times Energy Transfer Partners, the nation’s biggest pipeline operator, has lost $450 million dollars from delays in the completion of the Dakota Access Pipeline and its standoff with the Standing Rock Sioux Tribe over a section running through tribal lands could mean an additional $80 million a month in losses. According to the Wall Street Journal U.S. District Judge James Boasberg has denied a request by Energy Transfer Partners LP to quickly force the federal government to approve the final link in its Dakota Access pipeline, but said he would take up the issue next year ordering lawyers for Energy Transfer Partners and the Justice Department to file motions by January 31, 2017.[147][148][149]

[edit] December 9, 2016: Phillips 66 Wood River Refinery Donates $125,000 to Playground Project

The Alton Daily News reported on December 9, 2016 that Phillips 66 Wood River Refinery has donated $125,000 toward Alton's Gordon Moore Park that will be a part of massive upgrades at the facility along Illinois Route 140.[150] “Phillips 66 is a company that believes in the importance of celebrating diversity and achieving inclusion within our community,” Phillips 66 spokesperson Megan Allen said. “This project is a perfect representation of the values we respect and abide by as a company. It was a natural connection for us to be involved in the development of this playground.”[151]

[edit] December 7, 2016: Court Orders Further Review of Phillips 66 Propane Project at Rodeo Refinery

The East Bay Times reported that Contra Costa Superior Court Judge Barry Goode has voided a land use permit and the certification of an environmental report for a propane project at the Phillips 66 petroleum refinery issuing an order voiding the land use permit and the Environmental Impact Statement's certification, pointing to shortcomings in the EIR’s analysis of emissions and air pollution. The Phillips 66 Propane Recovery Project calls for installing new equipment to recover and sell propane and butane instead of burning the fuel at the refinery or flaring off excesses. The refinery has said the project will reduce pollution while creating well-paying jobs and generating taxes. It would involve construction of new distillation columns and absorber towers, a hydrotreater, six propane storage vessels, a loading rack, two rail spurs, some additions and modifications to ancillary facilities, and perhaps a new steam boiler.

“Phillips 66 is pleased with the court’s conclusion that the county’s environmental analysis was performed correctly regarding almost every claim raised by the plaintiffs,” refinery spokesman Paul Adler said in an email this week. “With respect to the limited issues in the air impacts analysis that the Court found lacking, we are reviewing that portion of the Court’s decision.”[152]

[edit] December 7, 2016: First Dinner to be Served in Marland's Formal Dining Room at Marland Mansion in 75 Years

First Dinner Served in Marland's Formal Dining Room at Marland Mansion in 75 Years. A party of twelve guests will have dinner in the formal dining room courtesy of Hugh Pickens and Dr. S. J. Pickens, the signature sponsors of this year's Gala at the Mansion supporting the Marland Mansion Estate Foundation. Photo: Hugh Pickens

The Ponca City News reported on December 7, 2016 that something is happening in Ponca City that hasn't occurred for at least seventy-five years. On December 10 dinner will be served in E. W. Marland's private dining room at the Marland Mansion for the first time since 1941. A party of twelve guests will have dinner in the formal dining room courtesy of Hugh Pickens and Dr. S. J. Pickens, the signature sponsors of this year's Gala at the Mansion supporting the Marland Mansion Estate Foundation. The Marland Gala is a fundraiser for the Marland Estate Foundation whose mission is to restore and preserve the historic, architectural landmark and to educate people on the E.W. Marland story.

Dinner has not been served in the Marland's private dining room at the Mansion since Mr. Marland's passing in 1941. Although Marland lost his oil company to banking interests in 1929 and closed the mansion, he would reopen the mansion to parties and formal dinners during his tenure as Governor of Oklahoma from 1935 to 1939. "We are honored to have the opportunity to sponsor the Marland Gala this year," said Pickens, "and especially honored to be the first guests to have dinner in E. W. Marland's formal dining room in over 75 years."

The Pickens' invited guests include Ponca City Mayor Homer Nicholson, Barbara Rozell, Kay County District Attorney Brian Hermanson, Ruslyn Hermanson, Marland Estate Manager David Keathly, Marcia Keathly, Phillips 66 Community Affairs and Public Relations Head Diane Anderson, Deloris Pickens, and Joseph Gierek, owner of the Gierek Art Gallery in Tulsa and his wife Mary Gierek. "We want to express our sincere gratitude to the Pickens for being our major sponsor for the 2016 Gala," said Terron Liles, Chairman of the Marland Foundation, “and we want to thank them for their generosity toward the Marland Gala, The Marland Estate Foundation and the Marland Mansion as a whole."[153][154][155]

[edit] December 5, 2016: Trump Team Pledges Support for Completing Blocked Dakota Access Pipeline

The Wall Street Journal reported on December 5, 2016 that a spokesman for President-elect Donald Trump said the incoming administration supports completing the Dakota Access Pipeline, funded in part by Phillips 66. “With regard to the Dakota Access Pipeline, that’s something that we support construction of and we’ll review the full situation when we’re in the White House and make the appropriate determination at that time,” said Jason Miller, a spokesman for Mr. Trump. The statement by the Trump transition team, however, cast doubt on whether that decision would hold any sway after the new administration takes over in January. Pipeline experts said that Mr. Trump would have several options once he takes office to enable the $3.8 billion pipeline to proceed. That could include directing the Secretary of the Army to reinstate a previous permit for the reservoir crossing, or issuing an executive order approving the pipeline.[156]

However Rep. Raul Grijalva (D-Ariz.), the top Democrat on the Natural Resources Committee and an early ally of Dakota Access opponents, praised Obama’s decision. He said this “big win for tribal rights, for environmental quality and for every American who has stood in solidarity with the water protectors” should survive after Obama leaves office. “It now falls to the Trump administration to follow the law, treat this entire process with the respect and seriousness it demands, and honor the sacrifices of the Americans who put themselves in harm’s way to demand justice at Standing Rock,” Grijalva said.[157]

[edit] December 5, 2016: Could Phillips 66 Funded Dakota Access Pipeline Lose Its Contracts with Oil Companies on January 1?

Democracy Now reported on December 5, 2016 that according to Amy Goodman, a new report exposes "The Rickety Finances Behind the Dakota Access Pipeline," published by the Institute for Energy Economics and Financial Analysis and the Sightline Institute that spotlights a potential economic weakness of the project: the January 1st deadline by which Energy Transfer Partners had promised oil companies it would have completed construction. Missing the January 1st deadline opens up the possibility the pipeline company may lose its contracts with oil companies.

"One of the fundamental findings of our report was that the oil market has changed dramatically since the pipeline was first proposed in early 2014," says Clark Williams-Derry. "Back then, oil prices were at $100 a barrel or more, and oil production in North Dakota was rising. It kept rising and rising. And all the forecasts said that oil prices were going to remain high and that oil production in North Dakota was going to remain robust. But almost as soon as the companies signed up its first set of shippers, the first commitments from oil companies to ship through the pipeline, you started to see oil markets collapse. You saw prices fall from $100 a barrel down to $50 a barrel. And as that happened, oil companies in North Dakota started to pull back. They stopped—they weren’t drilling as much. A lot of them were starting to lose money from some of their oil projects in the Bakken region in North Dakota. And so, what you started to see is a decline in production. You’ve already seen a 20 percent dip in production in the Bakken region since oil prices started to collapse. And it’s still collapsing. It’s still declining by a percent or two every month. And if those declines—that decline in production continues, well, it’s not clear that the pipeline’s capacity is going to be needed at all."

“Oil markets have changed radically since ETP first locked in its contracts,” Williams-Derry said. “Shippers have to be asking themselves if the contracts they signed in early 2014 still make sense. ETP boxed itself in with the January 1 deadline.”[158][159]

Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.

[edit] December 4, 2016: Corps of Engineers Blocks Drilling of Phillips 66 Funded Dakota Access Oil Pipeline

The NY Times reported on December 3, 2016 that the Standing Rock Sioux Tribe has won a major victory in its battle to block the Dakota Access Pipeline, funded in part by Phillips 66, being built near its reservation when the Department of the Army announced that it would not allow the pipeline to be drilled under a dammed section of the Missouri River. The announcement set off whoops of joy inside the Oceti Sakowin camp. Tribal members paraded through the camp on horseback, jubilantly beating drums and gathering around a fire at the center of the camp. Tribal elders celebrated what they said was the validation of months of prayer and protest. “It’s wonderful,” Dave Archambault II, the Standing Rock tribal chairman, told cheering supporters who stood in the melting snow on a mild North Dakota afternoon. “You all did that. Your presence has brought the attention of the world.” The Standing Rock Sioux had objected to the pipeline’s path so close to the source of their drinking water, and said any spill could poison water supplies for them and other reservations and cities downstream. They also said the pipeline’s route through what are now privately owned ranches bordering the river crossed through sacred ancestral lands.

The Army said it would look for alternative routes for the $3.7 billion Dakota Access pipeline. “The best way to complete that work responsibly and expeditiously is to explore alternate routes for the pipeline crossing,” Jo-Ellen Darcy, the Army’s assistant secretary for civil works, said in a statement. The move could presage a lengthy environmental review that has the potential to block the pipeline’s construction for months or years.

Though the Army’s decision calls for an environmental study of alternative routes, the Trump administration could ultimately decide to allow the original, contested route. Representatives for Mr. Trump’s transition team did not immediately respond to requests for comment. There was no immediate response from Energy Transfer Partners, but its chief executive, Kelcy Warren, has said that the company was unwilling to reroute the pipeline, which is intended to transport as much as 550,000 barrels of oil a day from the oil fields of western North Dakota to a terminal in Illinois.[160]

Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.

[edit] December 1, 2016: Phillips 66 presents check for $57,000 for Flint Hills Maps in Butler County, Kansas

The Butler County Times Gazette reported on December 1, 2016 that Phillip 66 presented a $57,000 check to all of the schools in Butler County, Kansas for the display of a new Flinthills map, showing students just where it is they live, and where the Tall Grass Prairie is located. “The idea is too many children who grow up in the Flint Hills, grow up believing they are from no where,” said Emily Connell, who is part of the program. The latest map was dedicated at Flinthills Primary School in Cassoday recently, at which time a major donor for the Butler County schools, Phillips 66, was recognized. The goal was to be in 150 schools in the Flint Hills and they are close to 170. When they get in the Oklahoma schools in the region they will be close to 180 schools. It is important to realize all of the Butler schools were funded through Phillips,” Connell said. “All of this is because of Phillips. It’s huge to have a corporation like Phillips step forward.”

The whole idea behind the map is place-based education. It includes not only a map of the Flint Hills but also the Tall Grass Prairie and information about the area on each of the maps, with different maps created for elementary, middle school and high school/college levels. This is the first time a map has shown the remaining native tall grass prairie. Ninety-six percent of it has been plowed and developed, making the tall grass prairie the most altered ecosystem there is.[161]

[edit] November 30, 2016: Ponca Refinery Begins Largest Turnaround Since 2011

Ponca Refinery Begins Largest Turnaround Since 2011. Ponca Refinery is beginning the largest turnaround since 2011 which at its peak will involve more than 1,000 contract laborers from approximately 35 different companies. Photo: Hugh Pickens

The Ponca City News reported on November 30, 2016 that the Ponca Refinery is beginning the largest turnaround since 2011 which at its peak will involve more than 1,000 contract laborers from approximately 35 different companies. The turnaround requires a large monetary investment from the company and there is a large outlay of dollars spent in the Ponca City community. Contract laborers will fill hotel and motel rooms, RV parks, and rental properties and will spend money throughout the community. The city of Ponca City will benefit from tax revenues that come from this project. “This investment is just another example of the company’s commitment to Ponca City and the area for the long term,” said Tim Seidel, manager of the Ponca City Refinery. “It shows our company’s support to the Ponca City Refinery. Our employees who call Ponca City home are committed to make our refinery the best in the industry.”[162]

A turnaround is a planned break in production so that maintenance may be performed. Most refineries go through a turnaround every three to five years. Each turnaround requires extensive planning and careful coordination of labor and materials. Most often, the shutdown happens when production is at its lowest and required skilled labor is readily available. Some turnarounds take a few weeks to complete. Others may need a few months. Turnarounds depend entirely on the extent of the project and any problems that occur or are found along the way. Most refineries go through an extensive inspection and testing process during a turnaround. If the inspection or testing identifies a problem, the time may be extended.[163]

[edit] November 30, 2016: Ponca Refinery Will Start Revamp of their Largest Crude Fractionation Unit in 2017

The Ponca City News reported on November 30, 2016 that the Ponca Refinery is in the early construction stages of revamp to its largest crude fractionation unit which will allow the refinery to convert a larger percentage of crude oil into motor fuel (specifically more diesel); replace older equipment with state of the art, energy efficient equipment; and will enable the refinery to run more local grades of Oklahoma crude. The project, which is in its early constructions stages now will start in 2017.[164]

[edit] November 30, 2016: Ponca Refinery Has Hired Fifty New Operators and Maintenance Personnel in Last Two Years

The Ponca City News reported that Ponca Refinery has hired close to 50 new operators and maintenance personnel in the last two years. “Over the past two years, Phillips 66 PCR has hired close to 50 new operators and maintenance personnel. We have a strong partnership with Northern Oklahoma College, which has the Process Technology (PTech) degree program that helps with having qualified operator candidates,” according to Tim Seidel, refinery manager. “Also Pioneer Tech, right here in Ponca City is a critical partner to provide educational and training programs for our mechanical craft workers for both employees and contractors. “New in 2016, the refinery started an instrumentation internship program, partnering with the Oklahoma State University-Information Technology’s (OSU-IT), four-year degree plan. In the same two year time period, we have hired nine engineers and scientists with the off-campus hires coming primarily from our core universities of OU, OSU and KSU.”[165]

The Ponca City News reported on October 14, 2012 that Refinery Manager Pete Stynes spoke to the Ponca City Lions Club on October 10, 2012 about Phillips 66's Refinery in Ponca City and said that 800 employees work at the refinery with the direct employment of 625 Phillips employees.[166]

[edit] November 30, 2016: Two Thousand Veterans to Protect Protesters of Phillips 66 Funded Dakota Access Pipeline

UPI reported on November 30, 2016 that the Veterans Stand For Standing Rock group says it plans to have up to 2,000 veterans help protect Dakota Access Pipeline protesters from what it describes as abusive and humiliating tactics committed by a "militarized police force." The group has called on veterans joining the protest to bring body armor, gas masks, earplugs and shooting mufflers, due to possible use of a sound cannon by police and asked veterans not to bring drugs, alcohol or weapons. "This event ... will not tolerate hate, violence or divisive behavior of any kind. We're doing this to support our country so let's do it with honor, working together," the group wrote on Facebook. "We can stop this savage injustice being committed right here at home. If not us, who? If not now, when?"

Police forces have been criticized for using tear gas and other non-lethal methods, such as rubber bullets and water cannons amid freezing temperatures, to disrupt the protests. "Are you going to treat us veterans who have served our country in the same way as you have those water protectors?" said Loreal Black Shawl, a Native American eight-year U.S. Army veteran. "We're not there to create chaos. We are there because we are tired of seeing the water protectors being treated as non-humans."

North Dakota Gov. Jack Dalrymple this week signed an emergency evacuation order to clear Dakota Access Pipeline protesters from U.S. Army Corps of Engineers territory.[167] Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.

[edit] November 23, 2016: Phillips 66 Donates $25,000 To Help Cushing Recovery From Earthquake

The Ponca City News reported that Phillips 66 presented a $25,000 donation to the the American Red Cross to help to help people affected by the 5.0 earthquake in Cushing, Oklahoma on Nvember 6, 2016 as well as increase earthquake and disaster preparedness education throughout the Cushing area and Northwest Oklahoma. “It is Phillips 66’s pleasure to team up with an outstanding organization such as the Red Cross and be able to give back to the Cushing community,” said Rodger Lewis, manager, central pipeline division, Phillips 66. “Our employees who work in the community immediately recognized a need to help their fellow citizens affected by the recent earthquake. Supporting the communities where we operate aligns with our core values of safety, honor and commitment, and we hope our donation will help those in the Cushing community who are in need of assistance.”[168]

[edit] November 21, 2016: Police, Citing ‘Ongoing Riot,’ Use Water Cannons in Freezing Weather on Protesters Against Phillips 66 Funded Dakota Access Pipeline

Police Use Water Cannons on Dakota Access Protesters in Freezing Weather. Police used water cannons to disperse a group of about 400 protesters against the Dakota Access Pipeline, funded in part by Phillips 66, as they tried to move past a barricaded bridge toward construction sites for the project. As temperatures in Cannon Ball, N.D., dropped into the 20s, police in riot gear sprayed activists with a hose mounted atop an armored vehicle and formed a line to prevent them from advancing up the road.

The Washington Post reported on November 21, 2016 that police used water cannons to disperse a group of about 400 protesters against the Dakota Access Pipeline, funded in part by Phillips 66, as they tried to move past a barricaded bridge toward construction sites for the project. As temperatures in Cannon Ball, N.D., dropped into the 20s, police in riot gear sprayed activists with a hose mounted atop an armored vehicle and formed a line to prevent them from advancing up the road. Protesters also reported being pelted with rubber bullets, tear gas and concussion grenades during the standoff, which lasted until late Sunday night.

Protesters, who call themselves “water protectors,” have argued that the barricade prevents emergency services from reaching the Standing Rock Sioux Reservation and a nearby camp they have used as a staging ground for demonstrations. “Folks have a right to be on a public road,” said Dallas Goldtooth. “It’s absurd that people who’ve been trying to take down the barricade now have their lives at risk.” The sheriff’s department told the Tribune that the bridge has been closed since October because transportation officials were concerned about its structural integrity.[169]

[edit] November 21, 2016: Phillips 66 to Host Chamber of Commerce at Ponca Refinery

The Ponca City Chamber of Commerce reported on November 21, 2016 that Phillips 66 will be hosting an open house for chamber members on November 22, 2016 in E. W. Marland's board room and office at the Ponca Refinery.

[edit] November 16, 2016: Scores Arrested in Nationwide Protests Against Phillips 66 Funded Dakota Access Pipeline

NBC News reported on November 16, 2016 that dozens of protesters against Dakota Access Pipeline, funded in part by Phillips 66, were arrested in what organizers called a "National Day of Action" by self-proclaimed "water protectors" near Army Corps of Engineers offices from Los Angeles to New York City. The protests planned for more than 300 communities across the U.S. were an intended show of solidarity with the Standing Rock Sioux Indian tribe, which says its drinking water and way of life are threatened by the proposed pipeline. In Los Angeles, an estimated 1,500 protesters gathered peacefully in the financial district, while hundreds participated in a march at Daley plaza in Chicago. Sen. Bernie Sanders joined a crowd in front of the White House, and police in riot gear met protesters marching in Denver. In Mandan, North Dakota, about 40 miles from where the pipeline would cross on the border of the Standing Rock Sioux Indian Reservation, 350 protesters blocked a railroad with a pickup truck and other debris. More than 25 were people were arrested, some on felony charges, according to the Morton County Sheriff Department.

Over 1,500 anti-Dakota Access Pipeline protesters marched in Lower Manhattan, many holding signs and placards decrying the pipeline, and others warning of a bleak future for their cause under a Trump administration. "It's important for us to show solidarity across the country for those of us who can't be there at Standing Rock," said Korina Emmerich, a Brooklyn resident and member of the Puyallup tribe. "It's so important to show that we are not stopping until they stop building the pipeline," said Emmerich, carrying a sign that read "Don't sign our Mother Earth over to pollution, war + greed."

The fate of the project lies with the U.S. Army Corps of Engineers. For weeks, the agency has been conducting a federal environmental review of the land in question. In its letter Monday, the Corps did not provide a timeline for its final decision.[170]

[edit] November 14, 2016: Phillips 66 Loads First Cargo From Billion Dollar Freeport LPG Terminal

Houston Business Journal reported on November 14, 2016 that the first cargo of propane and butane out of Phillips 66's new liquefied petroleum gas export terminal in Freeport, Texas, has been loaded and departed — ahead of the facility’s full-start in December. When it enters full operation in mid-December, the Freeport LPG terminal will have an export capacity of about 4.4 million barrels per month. The entire Gulf Coast region exported 20.34 million barrels of LPGs in August, according to the most recent data released by the U.S. Energy Information Administration. Phillips 66 broke ground on the Freeport LPG terminal in August 2014, when it was expected to cost about $1 billion. The new LPG export terminal is at Phillips 66's existing marine terminal in Freeport, south of Houston. The company will get the fuel from its Sweeny complex in Old Ocean and its Gulf Coast Fractionators facility in Mont Belvieu.[171]

[edit] November 14, 2016: Garland Sells $6.4 Million in Phillips 66 Stock

Gurufocus reported on November 14, 2016 that Phillips 66 CEO Greg C. Garland sold 76,165 shares of Phillips on November 10, 2016 at an average price of $83.48 a share for a total sale of $6.4 million.[172]

[edit] November 12, 2016: What Will the Trump Presidency Mean for Phillips 66 Funded Dakota Access Pipeline?

NBC News reported on November 12, 2016 that according to Kelcy Warren, CEO of Energy Transfer Partners, the incoming Donald Trump administration will ensure the completion of the controversial Dakota Access Pipeline in North Dakota. "I'm 100 percent sure that the pipeline will be approved by a Trump administration," said Warren. "I believe we will have a government in place that believes in energy infrastructure." In June, Warren donated $100,000 to the Trump Victory Fund, a joint fundraising committee for Trump's campaign, and a further $3,000 directly to the Trump campaign. For his part, Trump's campaign financial disclosure forms revealed the President-elect's investments totaling between $500,000 and $1 million in Energy Transfer Partners, suggesting a possible vested financial interest in the completion of the pipeline.

Warren, who has remained publicly silent on the pipeline for months as protests forced a halt in the pipeline's construction, labeled most of the protesters at Standing Rock as "violent mobs." He repeatedly praised the work of local law enforcement, despite reports of police brutality, unlawful arrests and mistreatment in jail. "It's unbelievable how they've conducted themselves," said Warren.

Standing Rock Sioux Chairman Dave Archambault II said that Warren's remarks reflected the mindset of a "Dallas-based billionaire" unconcerned with the well being of his tribe. "Energy Transfer Partners' assertion that there are no sacred sites affected is another example of how they ignore our voice and fail to listen to our serious concerns," Archambault said in the statement. "Once again, a Dallas-based billionaire and the state of North Dakota's archeologists continue to render our voice meaningless regarding our own understanding of our traditions, spirituality and culture."[173] Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.

[edit] November 5, 2016: Iowa Landowners Criticize Work on Phillips 66 Funded Dakota Access Pipeline: 'They Show No Respect'

Iowa Landowners Criticize Work on Phillips 66 Funded Dakota Access Pipeline: 'They Show No Respect.' Countless landowners across Iowa have petitioned county inspectors, supervisors and state regulators, claiming that questionable construction practices are worsening tensions between landowners and Dakota Access LLC, funded in part by Phillips 66. "It's evidence that even as the pipeline nears completion in Iowa, opposition to the pipeline and the way it has been built shows no signs of ebbing," writes Kim Hardy. "And some say the state has failed to do enough to protect landowners who now have pipeline running through their property. Dakota Access, however, maintains it has upheld its commitments to landowners. Photo: The DAPL (Dakota Access Pipeline) being installed between farms, as seen from 50th Avenue in New Salem, North Dakota. Tony Webster Flickr Creative Commons. Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0)

The Des Moines Register reported on November 5, 2016 that countless landowners across Iowa have petitioned county inspectors, supervisors and state regulators, claiming that questionable construction practices are worsening tensions between landowners and Dakota Access LLC, funded in part by Phillips 66. "It's evidence that even as the pipeline nears completion in Iowa, opposition to the pipeline and the way it has been built shows no signs of ebbing," writes Kim Hardy. "And some say the state has failed to do enough to protect landowners who now have pipeline running through their property. Dakota Access, however, maintains it has upheld its commitments to landowners."

Cyndy Coppola said she and her nephew have found several 30-inch steel rings and other debris on their 80-acre family farm in Calhoun County. She was astonished to see that crews have no garbage bins on site to collect refuse as they go. "I guess our biggest complaint is they show no respect," said Coppola, 68, who lives in Des Moines and was arrested for trespassing while protesting construction on her land in October. Inspectors have assured Coppola that crews eventually will come back to clean up the site. But she's skeptical, even as she watches debris getting pushed underground by heavy construction equipment. She worries that buried debris will eventually end up wrecking a combine during harvest. "We don’t think they’re going to make any effort to unbury what's already been covered up," she said. "That's a joke, because they’ve just gotten by with it all along."

Dakota Access spokeswoman Vicki Granado said the company takes its construction commitments "very seriously." And she said no complaints concerning the 1,295 parcels under construction in Iowa have been determined to be founded by the Iowa Utilities Board or county supervisors. "It is our goal to maintain this record throughout the rest of construction," Granado said, "which is nearing completion in Iowa."[174] Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.

[edit] November 3, 2016: Chevron Phillips Chemical’s Ethane Cracker at Baytown Likely Will Cost Another $250 million to $500 million

Platts reported on November 3, 2016 that Chevron Phillips Chemical’s ethane cracker, a 50/50 JV of Phillips 66 and Chevron Corp., likely will cost another $250 million to $500 million because a months-long delay has pushed its target startup to the second half of 2017. Phillips 66 Chief Executive Greg Garland told analysts last week that the delay will probably raise the cost of the project in Baytown, Texas, by 5%-10% “just due to delays we are seeing in construction,” though two associated polyethylene plants 86 miles away in Sweeny, Texas, are expected to be mechanically complete in the second quarter and start up by mid-2017 as planned. About $5 billion of the combined $6 billion project is related to the cracker. Phillips 66 President Tim Taylor said the main push behind the delay is construction amid a tight craft labor squeeze.[175]

[edit] November 3, 2016: Fluor takes $154 million Hit on Delayed Chevron Phillips Petrochemical Expansion in Baytown

Fuelfix reported on November 3, 2016 that Fluor, which is building Chevron Phillips’ “U.S. Gulf Coast Petrochemicals Project” in a joint venture with Japan-based JGC, said it recorded a $154 million impairment charge for the project in the third quarter. “We are very disappointed in the construction progress on a fixed-price Gulf Coast project that led to a significant charge this quarter,” said David Seaton, Fluor chairman and CEO. Seaton confirmed Fluor will take a net loss on the entirety of the project. He cited weather delays, which were caused by Houston-area flooding in the spring, as well as problems with “piping performance” during the construction process. There was also one fatality in May when a Fluor contractor died after an on-site accident. Last month, Chevron Phillips acknowledged some minor delays caused by weather and additional retraining needed for some craft workers.[176]

[edit] November 2, 2016: Obama Says Army Corps is Weighing Whether to ‘Reroute’ Phillips 66 Funded Dakota Access Pipeline

The Washington Post reported on November 2, 2016 that President Obama said Tuesday that his administration was considering ways to “reroute” the Dakota Access Pipeline after a week of violent clashes between authorities and activists protesting the controversial project. “We’re monitoring this closely,” Obama said. “My view is that there is a way for us to accommodate sacred lands of Native Americans. And I think that right now the Army Corps is examining whether there are ways to reroute this pipeline. We’re going to let it play out for several more weeks and determine whether or not this can be resolved in a way that I think is properly attentive to the traditions of First Americans." Even as Obama raised the possibility of rerouting the pipeline, he seemed to suggest that it would go forward.

But many climate activists have called on Obama to halt the project altogether, the way he blocked construction of the Keystone XL pipeline last year between Canada and the U.S. Gulf Coast. Jamie Henn, a spokesman for the environmental group 350.org, said in an email Wednesday that it would be hypocritical for Obama to allow the pipeline to be completed. “There’s no reroute that doesn’t involve the same risks to water and climate,” Henn said. “The president must submit Dakota Access to the same climate test as Keystone XL, a test it will surely fail.”[177]

Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.

[edit] October 31, 2016: Phillips 66 Wood River Refinery Pays Civil Penalty to Settle Wastewater Pollution Case

The St. Louis Post-Dispatch reported on October 31, 2016 that Phillips 66, ConocoPhillips and WRB Refining — the past and present operators of the Wood River Refinery have agreed to pay a civil penalty of $125,000 and install new wastewater control systems at the refinery after alleged releases of wastewater contaminants that exceeded the facility’s permitted levels. Pollutants that exceeded allowable levels for the facility included mercury, fecal coliform, ammonia and other byproducts. Courts records show the exceedances were documented in monthly reports submitted by the refinery to the Illinois EPA from 2011 to 2016. Phillips 66 issued a statement saying the settlement “acknowledges the improvements the refinery has already made to improve the refinery’s wastewater treatment performance, as well as outlines additional investments the refinery is committed to implement.”[178]

[edit] October 28, 2016: Garland Expects Permit "in Relatively Short Order" to Complete Dakota Access Pipeline

Phillips 66 CEO Greg Garland Expects Permit "in Relatively Short Order" to Complete Dakota Access Pipeline. Greg Garland expects a permit will be granted to build a controversial oil pipeline under the Missouri River near Native American land in North Dakota. "There's not that much left to be finished once we get the easement to go underneath the Missouri River," Garland told analysts on a conference call. "So I think that can be wrapped up in relatively short order." Photo: #NoDAPL-Solidarity from Oakland, CA Peg Hunter Flickr Creative Commons. Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Yahoo reported on October 28, 2016 that Greg Garland expects a permit will be granted to build a controversial oil pipeline under the Missouri River near Native American land in North Dakota. "There's not that much left to be finished once we get the easement to go underneath the Missouri River," Garland told analysts on a conference call. "So I think that can be wrapped up in relatively short order." The U.S. Justice and Interior Departments along with the U.S. Army Corps of Engineers halted construction under the Missouri in September due to protests by Native American tribes who say the pipeline would disturb sacred land and pollute waterways supplying nearby homes. Construction is continuing on sections of the pipeline away from the Missouri River, Garland said. Phillips owns 25 percent of the project.[179]

[edit] October 28, 2016: Phillips 66 Quarterly Profit Plunges Prompting Cuts in 2016 Capital Expenditures

Reuters reported on October 28, 2016 that Phillips 66 reported a sharp fall in quarterly profit due to lower refining margins, and cut its full-year capital expenditure forecast to about $3 billion. The company's consolidated earnings fell to $511 million, or 96 cents per share, in the third quarter, from $1.58 billion, or $2.90 per share, a year earlier.Adjusted earnings fell to $1.05 per share from $3.02 per share.[180]

Still, Phillips 66 keeps profiting, while many oil and gas producers and services companies continue to report quarterly losses. “This year we are delivering record operational excellence results, managing costs, executing our major projects and maintaining disciplined capital allocation,” Phillips 66 Chairman and Chief Executive Greg Garland said in a prepared statement. Garland said its capital spending for the full year is decreased down to $3 billion from an initial budget of $3.9 billion. The 2017 capital budget is projected to come in below $3 billion.[181]

Refining's third-quarter earnings were $177 million, compared with $149 million in the second quarter of 2016. Refining's earnings in the third quarter of 2016 included a benefit of $43 million related to a legal award. Refining's second-quarter earnings included a net charge of $3 million related to a logistics commitment that was partially offset by a favorable U.K. tax settlement. Refining's adjusted earnings were $134 million in the third quarter, compared with $152 million in the second quarter of 2016. The decrease in adjusted earnings was largely driven by higher planned turnaround expenses, partially offset by lower routine maintenance costs. Realized margins were $7.23 per barrel, in line with the prior quarter's $7.13 per barrel. Phillips 66’s worldwide crude utilization rate was 97 percent and its clean product yield was 84 percent in the third quarter. Pretax turnaround costs for the third quarter were $117 million.[182]

[edit] October 26, 2016: Analyst Says Phillips May Bid on ExxonMobile Refinery in Billings

Toronto Metro reported on October 26, 2016 that Calgary oilsands analyst Michael Dunn of GMP FirstEnergy said Cenovus may be working with American refining partner Phillips 66 to bid on a Billings, Montana, refinery owned by Imperial's parent company, U.S.-based ExxonMobil.[183] The ExxonMobile refinery is one of the highest quality plants in the Rocky Mountains, with a fluidized coking unit for refining heavy oil. The plant primarily processes crude either imported from Canada or transported from nearby Wyoming. Industry sources quoted by Reuters said that major refiners, including Chevron Corp. and Exxon Mobil, are seeking to unload their smaller refineries that aren’t associated with petrochemical manufacturing, which can be more profitable. The Billings ExxonMobil refinery is the company’s smallest and it isn't associated with petrochemical manufacturing. Rumors that ExxonMobil is interested in selling its Billings refinery have surfaced in industry publications in past years, but so far have proven unfounded. Reuters speculated that the 60,000-barrel-per day plant would be worth between $500 million and $700 million.[184]

Greg Garland says that Phillips is not in a hunt for anyone that are for sale today. "So I think historical answer is still a good answer for us," said Garland. "Yes having said that if we could find the right assets for the right value certainly we would look at it, but none of the ones that are on the market today we are not in a hunt for those."[185]

[edit] October 22, 2016: Eighty-three Arrested at Protest Against Phillips 66 Funded Dakota Access Pipeline

UPI reported on October 22, 2016 that police in North Dakota arrested 83 protesters after violent clashes at the construction site of the Dakota Access pipeline. The protest happened in rural Mandan, N.D., where workers are installing the 1,172-mile oil pipeline that will run from the oil fields in North Dakota south as far as Illinois. A group of protesters walked some three miles off the nearest road with a large all-terrain vehicle, slashed its tires and fastened themselves to the machine, according to the Bismarck Tribune. One individual chained herself to the steering wheel. Another man put his arm through a hole in the vehicle's door, than put his hand in a bucket of dried cement.

When police arrived on scene, a group of 300 or so protesters, Native Americans who view the construction as a violation of their sovereignty along with environmentalists, refused to leave. Police formed a line near the protesters and some tried to breach the line; officers responded with the use of pepper spray. Two officers were injured, though not seriously, in the confrontation. Police said they used the least amount of force possible to remove the protesters from private property. "We want to use the most nonlethal method possible," Morton County Sheriff's Department Rob Keller told the Bismarck Tribune. It took police about five hours to clear the scene of protesters so work in the area could resume. WDAZ-TV reported protesters were mostly charge with a combination of assault on a peace officer, reckless endangerment, criminal trespass, engaging in a riot, resisting arrest and fleeing an officer on foot.[186]

Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

[edit] October 21, 2016: Phillips 66 Disputes Coast Guard Finding They’re Responsible for Oil Spill at Rodeo Refinery Marine Terminal

Coast Guard says Phillips 66 is Responsible for Oil Sheens on San Pablo Bay from Rodeo Refinery Oil Terminal. The spill left two sheens on the bay, including one just over a mile long by 40 yards wide on the water in the northern San Pablo Bay area, according to the U.S. Coast Guard, the lead agency investigating the incident. A second sheen was later identified during a Coast Guard overflight near the Phillips 66 Rodeo refinery marine terminal. Photo: Michael Macor, The San Francisco Chronicle

KQED reported on October 21, 2016 that Phillips 66 is rejecting a finding by the Coast Guard that a marine terminal at its Rodeo facility played a role in an oil spill in San Pablo Bay last month. After the oil sheen was discovered, the refinery told the operators of the Yamuna Spirit to stop transfer operations, according to company spokesman Paul Adler. “Phillips 66 subsequently tested the refinery’s dock transfer piping,” Adler said. “The tests were observed by several federal, state and local government agencies and there was no evidence of leakage from Phillips 66 piping and connections.” Phillips 66 shut down its marine terminal at the beginning of the investigation. A week later, it reopened the facility and allowed the Yamuna Spirit to depart.

Local environmentalists say there should have been better oil transfer procedures in place at the refinery. “Whether or not the oil spill that took place during oil transfer operations at Phillips 66 was the fault of refinery staff or the shipping company hired to transport its oil is irrelevant,” said Ian Wren, a staff scientist at Baykeeper, an organization that works to stop pollution in San Francisco Bay. “Phillips 66 should be expected to take full responsibility for this spill and any others that take place under its authority."[187]

[edit] October 20, 2016: US Coast Guard Says Phillips 66 Responsible for Oil Sheens on San Pablo Bay from Rodeo Refinery Oil Terminal

The East Bay Times reported on October 20, 2016 that the mysterious oil sheens that appeared on San Pablo Bay on September 20, 2016 were connected to a crude oil tanker or the Phillips 66 refinery, the U.S. Coast Guard announced. The spill left two sheens on the bay, including one just over a mile long by 40 yards wide on the water in the northern San Pablo Bay area, according to the U.S. Coast Guard, the lead agency investigating the incident. A second sheen was later identified during a Coast Guard overflight near the Phillips 66 Rodeo refinery marine terminal. Authorities were unable to determine if the sheen found in the bay originated from the Yumuna Spirit of the Phillips 66 facility. The U.S. Coast Guard said the vessel and the facility are responsible for recovering federal related response costs. The Coast Guard could not determine what caused the odor that sent dozens of people to hospitals in Vallejo with complaints of headaches, nausea and dizziness on September 20, 2016.[188]

KQED reported on October 18, 2016 that officials have revealed a clue that could help determine what caused the oil spill in San Pablo Bay a month ago and a sickening odor that sent dozens of people to the hospital in Vallejo around the same time. Results of tests taken of the substance found in the water in late September show that it was crude oil from the Middle East, according to an official with California’s lead agency for responding to oil spills. Randy Sawyer, chief environmental health and hazardous materials officer for Contra Costa County Health Services, says the crude must have come from an oil tanker at a marine terminal in Rodeo. “Based on the analysis and where the sheen was located, the oil sheen originated from the ship while it was unloading to Phillips 66,” Sawyer said. I’s unclear how the oil might have leaked from the vessel. “I know that Phillips did check their piping and there were no leaks,” Sawyer said. “There may have been a portion of the piping (that was) not tested.”

Phillips 66 declined to comment on the investigation and activity of the Yamuna Spirit at its marine terminal. “Phillips 66 generally does not comment on activity as it relates to our crude supply and transportation arrangements,” said Aimee Lohr, a refinery spokeswoman.

When the investigation is concluded, local environmentalists say whoever is responsible should be held accountable. “The perpetrators need to face stiff penalties for this absolutely unacceptable oil spill,” said Patrick Sullivan, an Oakland-based spokesman for the Center for Biological Diversity. “But even the steepest fines won’t undo the damage this oil has done to the bay,” Sullivan said. “That’s why we’ve got to move away from shipping dirty crude through California’s fragile coastal ecosystems.”[189]

[edit] October 20, 2016: Phillips 66 Replaces Crude Distillation Tower at Ferndale Refinery

Phillips 66 Replaces Crude Distillation Tower at Ferndale Refinery. The crude distillation tower moves along Mountain View Road earlier this month. The new 16-story tower is expected to be operating sometime in 2017. Photo: Courtesy of Phillips 66 Ferndale Refinery

The Bellingham Herald reported on October 20, 2016 that Phillips 66 replacing a crude distillation tower that was installed at the Ferndale Refinery in late 1954. The 16-story tower was recently delivered to the refinery and should be in operation sometime in 2017. The tower takes heated crude oil and creates different components as it is recaptured at different temperatures. Those components include butane, gasoline, kerosene and diesel. Up to 120 contract workers will be on the project during installation and it will take about 70,000 contractor hours to complete.[190]

[edit] October 20, 2016: Phillips 66 Appeals Santa Maria Rail Project to San Luis Obispo County Supervisors

The San Luis Obispo Tribune reported on October 20, 2016 that Phillips 66. has appealed San Luis Obispo County Planning Commission’s rejection of its oil-by-rail plan to the county Board of Supervisors, setting the stage for lengthy and passionate hearings over a project that has drawn statewide attention. Phillips 66, in its appeal filed Wednesday afternoon, also is asking county supervisors to set aside the issue while it seeks an order from San Luis Obispo Superior Court that would direct the county planning department to correct what Phillips 66 says are misapplications of county land-use rules. The petition, filed Wednesday in Superior Court, also asks the court to direct the Planning Commission to set aside its findings for denial and reconsider Phillips 66’s application. A case management conference is set for Dec. 5. The Planning Commission voted 3-2 on Oct. 5 to reject the project, with Commissioners Don Campbell and Jim Harrison dissenting. Commissioner Jim Irving joined Commissioners Eric Meyer and Ken Topping on Wednesday to deny the plan.

In the meantime, environmental groups are gearing up for another fight. One such group, 350 Silicon Valley, is part of a statewide coalition of climate organizations focused on stopping the Phillips 66 project and plans to give county supervisors numerous reasons to reject the proposal, said Stew Plock, development manager for the group.[191]

[edit] October 18, 2016: Equipment Fire Called Arson on Phillips 66 Funded Dakota Access Pipeline

UPI reported on October 18, 2016 that authorities said arson is the likely cause of an Iowa fire that caused about $2 million in damage to construction equipment on Dakota Access oil pipeline, funded in part by Phillips 66. A preliminary investigation that included the FBI and the Iowa Fire Marshal found that the fires were intentionally set. It was at the same location that equipment was damaged in an Aug. 1 fire, which police suspect was started by vandals. Dakota Access LLC, the company constructing the controversial, 1,172-mile pipeline across four states, offered a $100,000 reward for information leading to a conviction in Saturday's incident.

A protest against the pipeline in North Dakota turned violent last month, and several of the approximately 800 demonstrators said they were attacked with mace or bitten by guard dogs. The rally was organized after it was noted the pipeline traverses Native American graves and sacred sites.[192]

Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

[edit] October 17, 2016: Phillips 66 Donates $600,000 to Ponca City Public Schools for Spatial Temporal Math

Ponca Post reported on October 17, 2016 that the Ponca City Public School district received a grant in excess of $600,000 from Phillips 66 to purchase ST (Spatial Temporal) Math licenses for all students in prekindergarten through 7th grade. ST Math is a game-based software designed to help students and enhance student comprehension and proficiency through visual learning. Students are able to learn at their own pace and to incorporate problem solving into their math lessons. ST Math utilizes a game concept that is interactive and has graphic animations that according to Mind Research, “visually represents mathematical concepts to improve conceptual understanding and problem-solving skills.”

The grant also included 3D printers for schools, iPads for the pre-K center, professional development for employees, and other supporting hardware totaling over $185,000. “Ponca City is the only school district in Oklahoma fortunate enough to have ST Math,” said Dr. Pennington. “We appreciate Phillips 66 bringing the program to us and committing more than $450,000 towards the program and supporting technology. Additionally, Phillips 66 has agreed to help pay the license renewal fee for the next three years if needed. Our teachers and students will have access to a tool that we know will increase students’ math skills and make learning fun.”

Tim Seidel, Diane Anderson (PCR Community Relations), Dr. Pennington, and Barbara Cusick (Ponca City Schools Director of Curriculum) and Teri Vogele, Associate Director of Curriculum visited students at Lincoln Elementary and West Middle to view first-hand how the program was being received and how it is helping students be more engaged and teachers to be able to teach math at several different levels. “We are excited to bring our Ponca City teachers this new tool and program to teach our students math,” said Tim Seidel. “I believe that through the application of ST MATH, we will identify opportunities and provide immediate benefits that will help students on an individual basis. Moreover, it will give teachers and students more flexibility and allow students to advance their math skills at an accelerated rate. Through this program, we hope to instill a love of math and create tomorrow’s problem solvers.”[193]

[edit] October 16, 2016: Ponca Tribe Members Protest at Phillips 66 Ponca Refinery

Over 200 Indigenous Nations have descended upon Canon Ball, ND to take a stand against Phillips 66 funded Dakota Access Pipeline. Senators Bernie Sanders, Patrick Leahy, Dianne Feinstein, Ben Cardin, and Ed Markey sent a letter to President Barack Obama asking him to direct the US Army Corps of Engineers to require a full environmental impact statement for the Lake Oahe crossing of the Dakota Access Pipeline, funded im part by Phillips 66. The senators added that "the project's current permits should be suspended and all construction stopped until a complete environmental and cultural review has been completed for the entire project." Over 200 Indigenous Nations have descended upon Canon Ball, ND to take a stand against the Dakota Access Pipeline. "You can't drink oil and you can't eat money!" Photo: Peg Hunter Joe Brusky Flickr Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)
Frank Phillips Respected Native Americans' Rights and Traditions. Phillips 66 founder Frank Phillips was well known for the respect he showed towards Native Americans, a respect that was fully reciprocated. On March 28, 1931, Frank Phillips was adopted into the Osage Tribe in a ceremony held at Woolaroc. Following the ceremony, Frank - Eagle Chief - was dressed by the Osage Chiefs in an official costume and was presented with a split buffalo hide by Zack Miller of the 101 Ranch. The adoption resolution was etched in English and Osage on the hide. It marked the first time the Osage had ever adopted a white person into their tribe.

The Osage Nation Supports the Standing Rock Sioux. The Osage Nation is providing emergency supplies to the protesters at Standing Rock and has issued a proclamation supporting Standing Rock opposition to the Dakota Access Pipeline. Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners. Photo: Woolaroc
Protests Turn Violent at Phillips 66 Funded Dakota Access Pipeline. Protests against the Dakota Access Pipeline, owned in part by Phillips 66, turned violent as demonstrators supporting the Standing Rock Sioux Tribe faced off with private security officers from Dallas-based Energy Transfer Partners and security officers threatened protesters with dogs. Tim Mentz Sr., who helped start the Standing Rock Sioux Tribe Tribal Historic Preservation Office, said bulldozers had likely dug through burial grounds with little regard and without allowing members of the tribe a chance to look for human remains. Photo: Democracy Now

The Ponca City News reported in a front page story that dozens of members of the Ponca Tribe protested at Phillips 66's Ponca Refinery carrying signs decrying the pollution of water and air, a multitude of earthquakes and other negative results attributed to fracking. Tribal members also protested against oil pipelines across waterways, sacred lands and other tribal lands like the Phillips 66 funded Dakota Access Pipeline. Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners that has been the subject of months of protests by hundreds of members of the Standing Rock Sioux and supported by over 200 Indigenous Nations.[194]

[edit] October 13, 2016: United States Senators Call for a Halt to Phillips 66 Funded Dakota Access Pipeline

Senators Bernie Sanders, Patrick Leahy, Dianne Feinstein, Ben Cardin, and Ed Markey sent a letter to President Barack Obama this week asking him to direct the US Army Corps of Engineers to require a full environmental impact statement for the Lake Oahe crossing of the Dakota Access Pipeline, funded in part by Phillips 66. The senators added that "the project's current permits should be suspended and all construction stopped until a complete environmental and cultural review has been completed for the entire project."

Protests over the 1,172-mile pipeline erupted again this week after Energy Transfer Partners, the company behind the project, resumed construction Monday morning. The pipeline, which would run from North Dakota to Illinois and cost $3.78 billion, has drawn criticism over its potential impact on the environment and the damage it could inflict to sacred grounds and water sources of the Standing Rock Sioux tribe. In late July, the tribe filed a lawsuit against the US Army Corps of Engineers, alleging that the agency failed to properly consult the tribes before approving the pipeline. On Sunday, a federal appeals court denied the tribe's request to halt construction on the pipeline. The Obama administration repeated its request for Energy Transfer Partners to voluntarily suspend construction, but the company has disregarded that request.[195]

“In light of the decision of the Court of Appeals for the D.C. Circuit to reject the Standing Rock Sioux Tribe's request for a temporary halt to construction, the project’s current permits should be suspended and all construction stopped until a complete environmental and cultural review has been completed for the entire project,” the senators wrote. “If there is one profound lesson that indigenous people have taught us, it is that all of us as human beings are part of nature. We will not survive if we continue to destroy nature.”[196]

Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

[edit] October 13, 2016: Phillips 66 Donates $250,000 to Bartlesville Girls and Boys Club

The Bartlesville Examiner Enterprise reported on October 13, 2016 that Phillips 66 is making a $250,000 donation to the Bartlesville Girls and Boys Club to help build the new C.J. “Pete” Silas Boys & Girls Club, which will replace the aging structure. The club plans to begin construction this fall with hopes of startings operations in the 2017-2018 school year. The state of the art facility will include a dedicated teen center, learning centers, gymnasium, technology and STEM lab, arts and music spaces, outdoor sporting courts, and an expanded kitchen to better accommodate the nutrition program. The Cal Ripken, Sr. Foundation will partner with the Club construct the playing field. “It's giving back to the community, and the Boys and Girls Club is one of the great institutions and organizations (in Bartlesville),” said Phillips 66 CEO Greg Garland. “When you think back to Pete Silas, the former chairman of Phillips Petroleum, he was a great guy that was loved in the industry and a great leader for the company during some difficult times. No one ever questioned his ethics or integrity, and he's known for that.”[197]

[edit] October 12, 2016: Phillips 66 Makes Multi-Million Dollar Investment in Bartlesville Research Center

Bartlesville Radio reported on October 12, 2016 that Phillips 66 joined Public Service Company and Dallas-based contractor, Brandt Companies as they broke ground on a new electrical substation at the Research Center. The substation is a multi-year, multi-million dollar investment in the Phillips Research Center.[198] According to Phillips 66 Vice President of Technology Merl Lindstrom, the new substation is part of a Infrastructure Upgrade Program following a study of the Phillips 66 Research Center to increase viability for continued use and growth long into the future. Phillips 66 Chairman/CEO Greg Garland said the new substation and infrastructure upgrades at the Research Center indicates the company’s continued presence in Bartlesville, from today through the future.[199]

[edit] October 10, 2016: Chevron Phillips' $6 Billion Houston Expansion at Baytown Nears Completion

The Houston Chronicle reported on October 10, 2016 that Chevron Phillips Chemical, a joint venture between Chevron and Phillips 66, is nearing completion of their $6 billion expansion at Baytown. The project involves a massive ethane cracker - on a plot the size of 44 football fields - that will separate a component of natural gas called ethane, which will provide the feedstock for some 1.5 million metric tons a year of ethylene, a common building block of plastics. The project adds to a petrochemical boom primarily along the Gulf Coast, where chemical and plastic makers can take advantage of cheap and ample natural gas, the feedstock for their products. The growing demand for plastics is mostly coming from Asia, primarily China, but also India and Indonesia, where rising incomes are fueling appetites for consumer goods, said Ron Corn, a Chevron Phillips senior vice president. Chevron Phillips also built what is called a low-profile flare to release fewer emissions more discreetly - as opposed to the typical tall flare that looks a ball of fire in the sky."[200]

[edit] October 5, 2016: San Luis Obispo County Planning Commission Votes to Deny Phillips 66 Santa Maria Rail Spur Project

KCBX reported on October 5, 2016 that the proposal by Phillips 66 to increase the number of trains bringing crude oil to its Santa Maria refinery will not move forward with a recommendation by the San Luis Obispo County Planning Commission with three out of five Commissioners voting to deny the request to build a rail spur at the facility. Mesa Refinery Watch Group Spokesperson Laurance Shinderman said that the issue is now likely headed to the San Luis Obispo County Board of Supervisors, but believes the recent vote helps set a tone for future debate. "When you have the planning staff saying no to it, and now the planning commissioners saying not to it...the sentiment seems to be leaning our way," said Shinderman.

Phillips 66 Spokesperson Dennis Nuss sent a statement to KCBX via email: "We presented a strong proposal, and will review the concerns raised today and consider our options, including the right to appeal."[201]

[edit] September 28, 2016: Archie Dunham Says that He Disagrees with Splitting Off Phillips 66 from ConocoPhillips

Archie Dunham Says He Disagrees with Splitting Off Phillips 66 from ConocoPhillips. In 2012, ConocoPhillips split, spinning off its refining, retail, and marketing operations to form Phillips 66, while ConocoPhillips focused on oil exploration and production. Jim Mulva, CEO of ConocoPhillips and architect of the split, said that two independent companies focused on their respective industries would be more competitive. He insisted both were big enough to compete and generated enough cash to invest in their futures. Dunham stayed out of the fray, he said recently. He wrote letters to the board, arguing that an integrated company can use cash from its refining business to fund oil exploration - but he never sent them. According to Hunn, the separation is a decision with which Dunham disagrees, even now. Photo: Wikipedia

David Hunn wrote in the Houston Chronicle on September 28, 2016 that sixteen years ago, on his way to a black-tie fundraiser in Oklahoma City, Archie Dunham, then chief executive of the Houston oil company Conoco, stepped out of hotel elevator just as Jim Mulva, his counterpart at Phillips Petroleum of Oklahoma, emerged from another nearby. "Low prices and rising costs were driving a wave of mergers in the industry, including the blockbuster combination of Exxon and Mobil, and leaving smaller companies like Conoco and Phillips vulnerable to takeover," writes Hunn. "Dunham didn't like the idea of getting gobbled by a major oil company; he took the opportunity to broach the idea of a merger - a merger of equals - with Mulva." Big oil companies had been circling Conoco for some time when Dunham found himself in a hotel lobby with Mulva, the Phillips CEO. Dunham, in a recent interview, said Phillips seemed like a good partner to him. They had strengths in different parts of the world that complemented each other, he said, but they also came from essentially the same place. "We felt like our cultures, values, were very similar," Dunham said.

After running into each other at the Renaissance Waterford on that evening in 2000, Dunham and Mulva quickly parted, wary of being spotted together and tipping anyone off to their discussion. But they soon met again, secretly, in Colorado. Alone in a room in the Broadmoor Hotel in Colorado Springs, they talked for four hours about business, family and values. A few months later, on a stormy day in November 2001, the two men met in Tulsa, Okla. to announce the merger that would create world's sixth biggest integrated oil company. The new firm would have $50 billion in revenues, $60 billion in assets, 8.7 billion barrels in oil reserves and 58,000 employees worldwide. Dunham persuaded Mulva to name the new company ConocoPhillips, and keep it headquartered in Houston. The city's easy access to international flights made the decision practical. "Besides, I was a Houstonian," Dunham said. "I wanted Houston to have the headquarters." In exchange, Dunham took the chairman slot; Mulva became chief executive.

Dunham retired in 2004. In 2012, the company split again, spinning off its refining, retail, and marketing operations to form Phillips 66, while ConocoPhillips focused on oil exploration and production. Mulva, still CEO then, said that two independent companies focused on their respective industries would be more competitive. He insisted both were big enough to compete and generated enough cash to invest in their futures. Dunham stayed out of the fray, he said recently. He wrote letters to the board, arguing that an integrated company can use cash from its refining business to fund oil exploration - but he never sent them. According to Hunn, the separation is a decision with which Dunham disagrees, even now.[202]

[edit] September 28, 2016: Health Official Says Phillips 66 Rodeo Refinery Needs to Notify Local Agencies Faster Next Time it Learns of an Oil Spill Near its Facility

KQED News reported on September 28, 2016 that a top Bay Area health official said Phillips 66's Rodeo Refinery needs to notify local agencies faster next time it learns of an oil spill near its facility. Randy Sawyer, Contra Costa County’s chief environmental health and hazardous materials officer, said Phillips 66 took 10 hours to tell his agency about the spill, a delay that could have impacted the investigation. “Hours later the sheen was gone and there was no evidence of it at that location,” Sawyer said. “So we lost some valuable time in trying to determine where the oil came from.” Phillips 66 has not responded to requests for comment on its delay in contacting the county.

The refinery told the California State Warning Center shortly before 9 a.m., according to Shawn Boyd, a spokesman for the Governor’s Office of Emergency Services. The company told Contra Costa’s hazardous materials program at 11 a.m., Sawyer said. The lack of answers frustrates at least one Vallejo city official. Councilwoman Katy Miessner said the possibility that an oil spill may have sickened some of the city’s residents is cause for concern. “I think this is something we’re going to have to address,” Miessner said. “Personally, I had no idea that we were vulnerable to the refineries across the bay.”[203]

The Times Herald reported on September 27, 2016 that the City of Vallejo has released an official statement about the pungent and mysterious odor that hung heavy in Vallejo last week. Residents reported an “unknown odor” primarily centered in South Vallejo that smelled of gasoline or natural gas. After dozens of patients began arriving at local hospitals in connection with breathing problems after inhaling the odor, the city issued a shelter-in-place order and advised residents to avoid being outside if possible. After the smell was noticed, a one-mile-by-40-foot sheen in the waterways was discovered near the the Phillips 66 Rodeo Refinery Marine Terminal. The odor in Vallejo gradually dissipated throughout the night. Though the shelter-in-place warning in Vallejo was lifted at 6 a.m. Wednesday, some residents took to social media to report still being able to detect something in the air. As the second day progressed, an additional sheen was eventually detected in the surrounding waters and city officials were informed about a leak that was found across the waterway at the Phillips 66 refinery.

“To date, no entity has shared any information with city officials about a possible cause of the unknown odor,” according to the city’s statement. One Vallejo resident, Liz Harkness, is not satisfied with the city’s answers about the incident and has started a petition to the “decision makers” of Vallejo and Phillips 66 Refinery in Rodeo to release more definitive answers. “Is the air truly safe?” Harkness wrote in the petition. “People are still feeling ill today! Just what is the sheen made of? Is it effecting wildlife, the bay and rivers? How much is moving upstream with the tides? Are the wetlands in danger? Especially those along Highway 37 that were just restored. Too many questions. No answers in this age of science? I feel we’re being left out. They know more than they let on, and a lot of us in the city know it.”[204]

[edit] September 23, 2016: Future Operator of Phillips Funded Dakota Access Pipeline Tops U.S. Crude Spill Charts

Operator of Phillips Funded Dakota Access Pipeline Tops U.S. Crude Spill Charts. Sunoco Logistics, the future operator of Dakota Access Pipeline, partially owned by Phillips 66 and delayed this month after Native American protests in North Dakota, spills crude more often than any of its competitors with more than 200 leaks since 2010, according to a Reuters analysis of government data. Reuters analyzed data that companies are obliged to disclose to the Pipeline and Hazardous Materials Safety Administration (PHMSA) when they suffer spills and found that Sunoco leaked crude from onshore pipelines at least 203 times over the last six years. Photo: Koch pipeline spill Little Falls MPCA Photos Flickr Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Reuters reported on September 23, 2016 that Sunoco Logistics, the future operator of Dakota Access Pipeline, partially owned by Phillips 66 and delayed this month after Native American protests in North Dakota, spills crude more often than any of its competitors with more than 200 leaks since 2010, according to a Reuters analysis of government data. Reuters analyzed data that companies are obliged to disclose to the Pipeline and Hazardous Materials Safety Administration (PHMSA) when they suffer spills and found that Sunoco leaked crude from onshore pipelines at least 203 times over the last six years. PHMSA data became more detailed in 2010. In its examination, Reuters tallied leaks in the past six years along dedicated onshore crude oil lines and excluded systems that carry natural gas and refined products. The Sunoco data include two of its pipeline units, the West Texas Gulf and Mid-Valley Pipeline. That made it the operator with the highest number of crude leak incidents, ahead of at least 190 recorded by Enterprise Products Partners and 167 by Plains All American Pipeline, according to the spill data reported to PHMSA, which is part of the U.S. Department of Transportation.

Sunoco's spill rate shows protestors may have reason to be concerned about potential leaks. The main option that was considered for routing the line away from the Standing Rock Sioux Tribe reservation was previously discarded because it would involve crossing more water-sensitive areas north of the capital Bismarck, according to the project's environmental assessment.

The company has made previous efforts to improve safety, a former Sunoco employee who declined to be identified said. It overhauled safety culture after a spill in 2000, and did so again another in 2005 that dumped some 6,000 barrels of crude into the Kentucky River from its Mid-Valley Pipeline. Sunoco acknowledged the data and told Reuters it had taken measures to reduce its spill rate. "Since the current leadership team took over in 2012, Sunoco Pipeline has enhanced and improved our integrity management program," Sunoco spokesman Jeffrey Shields told Reuters by email. This significantly cut the amount of barrels lost during incidents, he said.[205]

Phillips 66 owns a 25% stake in the $3.7B Dakota Access Pipeline that is being built by Energy Transfer Partners.

[edit] September 21, 2016: Officials Investigate Whether Phillips 66's Rodeo Refinery Is Tied to San Pablo Bay Oil Spill

KQED reported on September 21, 2016 that the U.S. Coast Guard and state officials are investigating an oil spill in San Pablo Bay that may have produced an odor that sickened dozens of Vallejo residents Tuesday night. It’s possible the Phillips 66 Refinery in Rodeo could be connected to the incident. Vallejo city officials issued a shelter-in-place order after hundreds of residents complained of a gas-like odor, which sent dozens to the hospital. “We had over 800 calls to our dispatch center of complaints of the smell, questions about what the smell is,” Vallejo Fire Department spokesman Kevin Brown said. “Several dozen of them were medical complaints, so we took several dozen patients into local hospitals.” The U.S. Coast Guard, the California Office of Spill Prevention and Response and the Bay Area Air Quality Management District are investigating.

KQED Science Editor Craig Miller, who lives in Vallejo, described the odor as it first began wafting through the area. “The air up here first starting turning acrid around 7:00 or 7:30 last evening and gradually became more intense. I would describe the smell as some kind of heavy petroleum distill,” Miller said. “It’s similar to the smell you would get driving by an oil tank farm except much, much more intense to the point where the city finally issued a shelter in place alert around 8:30.”

A light oily sheen was discovered shortly after 8 a.m. today at the Phillips 66 Refinery Marine Terminal in Rodeo, company spokesman Paul Adler wrote in an email to KQED. "At the time, a tanker was berthed at the marine terminal," wrote Adler. "Our internal response team immediately responded to the incident and we notified the National Response Center (NRC) and the United States Coast Guard. Operations at the marine terminal have been temporarily shut down and we are working closely with the Coast Guard and other agencies regarding the response." The email indicates the exact amount of oil released is not known, and the cause of the incident is under investigation."[206]

Officials Investigate Whether Phillips 66's Rodeo Refinery Tied to San Pablo Bay Oil Spill. Tthe U.S. Coast Guard and state officials are investigating an oil spill in San Pablo Bay that may have produced an odor that sickened dozens of Vallejo residents and it's possible the Phillips 66 Refinery in Rodeo could be connected to the incident. Crews deploy a boom near a pier in San Pablo Bay at the Phillips 66 refinery in Rodeo, Calif., on September 21, 2016. Photo: Michael Macor, The Chronicle

According to the Napa Valley Register a Coast Guard helicopter crew from Air Station San Francisco Wednesday morning discovered a sheen just over a mile long and 40 yards wide in northern San Pablo Bay, and the Coast Guard and California Office of Spill Prevention and Response's pollution investigators aboard a small boat took samples to determine the source. A second sheen was identified Wednesday afternoon during a Coast Guard flight near the Phillips 66 Refinery's Marine Terminal in Rodeo, according to the Coast Guard. Several vessels and skimmers conducted containment and cleanup operations, and 1,000 feet of boom was placed in the water surrounding the refinery, Coast Guard officials said. No oiled wildlife had been observed as of this afternoon, and Coast Guard pollution investigators have not determined the source of either sheen. The Phillips 66 energy company confirmed a light oily sheen was discovered at the Marine Terminal in Rodeo this morning. Neither Phillips 66 officials nor the Coast Guard said the oil sheens are suspected of causing a mysterious odor that sickened many Vallejo residents Tuesday night.[207]

Phillips 66 officials released a statement saying: "At 8:00 a.m., a light oily sheen was discovered at the Phillips 66 Rodeo Refinery Marine Terminal. At the time, a tanker was berthed at the marine terminal. Our internal response team immediately responded to the incident and we notified the National Response Center (NRC) and the United States Coast Guard. Operations at the marine terminal have been temporarily shut down and we are working closely with the U.S. Coast Guard and other agencies regarding the response. The exact volume of material released is still being determined, and the cause of the incident is under investigation. At this time, there have been no injuries associated with the release and there is no anticipated health impact to the community. The safety of the community, the environment and our people are of utmost importance to our company and these priorities will guide our efforts as we work with the agencies on the response."

Officials said the sheen and smell were reported at the same time. "They do seem to be tied, in fact they happened at the same time. Again with the sheen being a mile long and 40 yards wide, it seems like it's more than just a coincidence that they occurred at the same time," Vallejo Fire Department spokesperson Kevin Brown said. Fire officials don't think the source of the smell is in Vallejo. Their gas detectors didn't pick up the trace of gas in the air and nothing was reported from the refineries. "We're continuing to check in with them, but so far they've reported there's been no burn offs and that there is nothing coming from them," Brown said.[208]

[edit] September 19, 2016: Federal Regulators Investigate Phillips Funded Sacagawea Pipeline

Infoforum reported on September 19, 2016 that federal pipeline regulators will be in North Dakota investigating claims from former crew members on the Sacagawea Pipeline that the coating of the pipe was not properly inspected before it was installed under Lake Sakakawea. The North Dakota Public Service Commission also has jurisdiction over the oil pipeline, but the safety allegations fall under the federal agency's area of authority, said PSC Chairwoman Julie Fedorchak. So far, the federal regulators have not notified state regulators that the Sacagawea Pipeline is out of compliance, said Fedorchak.[209] Sacagawea Pipeline Company is a joint venture owned 50 percent by Phillips 66 Partners.

[edit] September 19, 2016: Garland to Speak in Bartlesville on October 11

The Bartlesville Chamber of Commerce announced on September 19, 2016 that Phillips 66 CEO Greg Garland will speak to the chamber on October 11, 2016.

[edit] September 16, 2016: Delay in Phillip 66 Funded Dakota Access Pipeline Could Cause $1.4 Billion in Losses in a Year

Delay in Phillip 66 Funded Dakota Access Pipeline Could Cause $1.4 Billion in Losses in a Year. Builders of the Dakota Access Pipeline, funded in part by Phillips 66, filed a brief to the U.S. Court of Appeals for the District of Columbia Circuit detailing its estimated economic losses and claiming it could lose $1.4 billion in a year if delays continue. The government has asked the company to voluntarily halt construction 20 miles east and west of Lake Oahe, located by the Missouri River it is set to cross. North Dakota has been the focus of large Native American protests as the Standing Rock Sioux Tribe, which is now suing the federal government for giving developers the right of way, says the project threatens cultural sites and their drinking water source. Photo: Joe Brusky Flickr

ThinkProgress reported on September 16, 2016 that builders of the Dakota Access Pipeline, funded in part by Phillips 66, filed a brief to the U.S. Court of Appeals for the District of Columbia Circuit detailing its estimated economic losses and claiming it could lose $1.4 billion in a year if delays continue. “Even a temporary or limited injunction would have devastating long and short term impacts to the [Dakota Access Pipeline] project,” said the brief. In the brief, the company said customer contracts could be permanently lost if Dakota Access’ January 1, 2017 delivery schedule isn’t kept. In addition, 8,000 workers would be affected. Even a temporary delay would mean loses of over $430 million, according to Dakota Access. Just demobilizing the construction could cost $200 million. “These harms are irreparable,” Dakota Access, a company owned by Texas-based Energy Transfer Partners, said. The staggering figures the company listed have not been independently verified.

The Dakota Access pipeline has secured from the Army Corps of Engineers and the four Midwestern states most permits it needs. However, the pipeline lacks a federal easement for Lake Oahe, located by the Missouri River it is set to cross. The government also asked the company to voluntarily halt construction 20 miles east and west of the lake. North Dakota has been the focus of large Native American protests as the Standing Rock Sioux Tribe, which is now suing the federal government for giving developers the right of way, says the project threatens cultural sites and their drinking water source.[210]

The Chicago Tribune reported on September 17, 2016 that a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit said in a ruling late Friday that it needs more time to consider the Standing Rock Sioux Tribe's request for an emergency injunction. It said it will issue another order setting a date for oral arguments on the motion. The order "should not be construed in any way as a ruling on the merits of that motion," the panel said. Vicki Granado, spokeswoman for Dakota Access LLC, said the company does not comment on pending litigation. Craig Stevens, spokesman for the MAIN Coalition, Midwest Alliance for Infrastructure Now, called the ruling disappointing but said his group respects the panel's decision. "Judge Boasberg, in his thoughtful and thorough opinion last week, confirmed that the Army Corps of Engineers did their jobs expertly and in accordance with the law," Stevens said in a statement. "We are confident that another fair review of the corps' work will render the same decision."

The corps also issued a ruling on Friday granting the tribes a temporary permit that allows demonstrators to legally protest on federal lands managed by the agency. In turn, the tribe assumes responsibility for maintenance, damage and restoration costs, the security and safety of protesters, and liability insurance. Republican Rep. Kevin Cramer, North Dakota's lone member of the U.S. House, called the special permit a good compromise. "It protects the protesters' right to assemble and free speech, while at the same time protecting legal commerce to go forward," Cramer said. "It sets up parameters and certainly puts liability where liability belongs, with the protesters and the leaders of the protest movement."[211]

Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

See also:

[edit] September 16, 2016: Washington State to Limit Carbon Pollution from Phillips 66 Ferndale Refinery

KPUG reported on September 16, 2016 that Washington State environmental regulators have finalized a rule that will require large industrial emitters like the BP Cherry Point Refinery and Phillips 66 Ferndale Refinery to gradually reduce carbon emissions by an average of 1.7% annually starting next year. Supporters say it’s needed to protect health and the environment. Republican Ferndale State Senator Doug Eriksen says the rule WON’T have a positive effect on the environment but WILL have a negative one on residents. “Families here in Washington state, they’re going to have to pay more to heat their homes. They’re going to have to pay more to drive their kids to school and to get to work, and really all for no reason,” says Eriksen.[212]

[edit] September 16, 2016: Judge Strikes Down Restraining Order Against Phillips Funded Sacagawea Pipeline Under Lake Sakakawea

KFYR reported on September 16, 2016 that Federal Judge Daniel Hovland has struck down a restraining order from the Three Affiliated Tribes and Chairman Mark Fox against Paradigm Energy Partners, LLC drilling two pipelines, one for natural gas and the other for oil, underneath Lake Sakakawea, allowing the project to continue. Paradigm Energy Partners is building the pipeline for Sacagawea Pipeline Company, a joint venture owned 50 percent by Phillips 66 Partners. Fox and the Three Affiliated Tribes filed for the restraining order against Paradigm Energy Partners, LLC, on August 19 for their construction of the Sacagawea Pipeline. Fox had argued that the Three Affiliated Tribes owned the mineral rights to the land, and Paradigm needed to get permission from both the United States government and the Tribes to build the line. In his ruling filed Sept. 13, Hovland decided that the United States held jurisdiction over the lake, and Paradigm properly obtained permits and easements with the Army Corps of Engineers for the project.[213]

[edit] September 14, 2016: Phillip 66's Yellowstone Pipeline Has Had Several Serious Oil Spills on the Flathead Reservation

Phillip 66's Yellowstone Pipeline Has Had Several Serious Oil Spills on the Flathead Reservation Over its 40 Year History. Yellowstone Pipeline, originally owned by Conoco, Exxon, and Union Oil and now managed by Phillips 66, has had two major oil leaks on Native American Land since 1993. A 10,000-gallon gasoline leak at Camas Creek near Hot Springs in 1993 put Yellowstone Pipeline in a difficult negotiating position just as its 20-year permit to cross the Flathead Indian Reservation was up for renewal. In addition to the Camas Creek spill, a break at Magpie Creek released about 163,000 gallons of fuel. Both leaks were reported by passing motorists and not the pipeline company; Camas Creek’s break reportedly ran 45 days before discovery. Photo: Mark Smith Flickr Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

The Missoulian reported on September 14, 2016 that the Yellowstone Pipeline, originally owned by Conoco, Exxon, and Union Oil and now managed by Phillips 66, has had two major oil leaks on Native American Land since 1993. A 10,000-gallon gasoline leak at Camas Creek near Hot Springs in 1993 put Yellowstone Pipeline in a difficult negotiating position just as its 20-year permit to cross the Flathead Indian Reservation was up for renewal. Then-Tribal Chairman Mickey Pablo said the Tribal Council “was being extra careful” about a new deal in light of at least three serious spills on the reservation from the 40-year-old pipeline.

In addition to the Camas Creek spill, a break at Magpie Creek released about 163,000 gallons of fuel. Both leaks were reported by passing motorists and not the pipeline company; Camas Creek’s break reportedly ran 45 days before discovery. “The belief among many tribal members is that the risk associated with this pipeline is too great, that enough is enough,” Confederated Salish and Kootenai Tribes environmental protection division manager Bill Swaney told the Missoulian in 1994. “To the tribes, it’s not a question of money, but a question of trying to protect the environment. Many in the tribal public don’t want to take this chance anymore. The pipeline’s track record has been fairly dismal.”

In 1995, Yellowstone Pipeline offered the tribe a deal paying between $25 million and $30 million over 20 years for a lease renewal across the reservation. Tribal officials said the previous 20-year deal only paid about $250,000 and was accompanied by the environmental disasters. The Confederated Salish and Kootenai Tribal Council voted in early 1995 not to renew the lease. On April 20, 1995, pipeline managers turned off the flow at Missoula and started transferring the fuel to trucks and rail cars to Thompson Falls.[214]

[edit] September 14, 2016: ConocoPhillips Chief Says Bartlesville Remains Vital for the Company's Success

The Bartlesville Examiner-Enterprise reported on September 14, 2016 that ConocoPhillips Chairman/CEO Ryan Lance was in Bartlesville on September 14, 2016 for a Bartlesville Chamber of Commerce forum at City Church and said that Bartlesville operations of the company remain vital for future success. “(Bartlesville) is really the center, heart and soul of our company as well,” said Lance. “It’s been that way for 100 years. It’s really an important place.” Lance said while the company is streamlining many of its operations through cost-cutting, finding new efficiencies and employee reductions, ConocoPhillips Bartlesville operations will continue through the foreseeable future. “This is a functional excellence center for our company,” Lance said. “This is the place where we do all of our back office accounting and our (informational technology). We do that for the whole company out of Bartlesville. When we looked at it, it continues to be a place that is important for the company, it’s low-cost for the company. So it fits in where we are at, where we are trying to take the company.”

Over the course of his 30-plus year career, Lance said he has seen six downturns and five uptakes. Right now, Lance said, supply and inventory of crude oil is high, while demand is still soft, but the disparity is starting to even out. As a result, ConocoPhillips has lowered it’s break-even point for oil prices to $50 per barrel, while other producers are still counting on $60-$70 per barrel.[215]

[edit] September 12, 2016: ConocoPhillips Lays Off Another 90 Employees in Bartlesville After Previously Laying Off 170 in 2015

News6 reported on September 12, 20016 that ConocoPhillips has begun to lay off 90 employees in Bartlesville. ConocoPhillips employs 15,600 people worldwide with 1,400 employees in Bartlesville. The companywide layoffs amount to 6 percent of its workforce. "We expect to have approximately 90 workforce reductions in Bartlesville, which has around 1,400 employees," a company spokesperson based in Bartlesville said. The spokesman said there are no new reductions to report, but employees will be leaving the organization over the coming weeks as necessitated by each individual staff or business unit need.[216] The latest round of layoffs in Bartlesville come nearly one year after more cuts were made to the local workforce. In October 2015, ConocoPhillips reduced 10 percent of its workforce, including approximately 170 employees in Bartlesville. The spokesman could not confirm what areas of Bartlesville employees would be most affected. The majority of Bartlesville employess work in information technology, accounting and human resources for ConocoPhillips’ worldwide operations.[217]

In 2008 ConocoPhillips downsized their operation in Ponca City as about 700 office worker positions in Ponca City were relocated to Bartlesville or Houston. Most of ConocoPhillips' nonrefinery jobs in Ponca City were focused in the credit card, information technology, facilities and other support operations.[218]

[edit] September 10, 2016: Future of Phillips 66 Funded Dakota Access Pipeline Is Uncertain

US Suspends Work on Part of Phillips 66 Funded Dakota Access Pipeline. The federal government has temporarily blocked construction on part of Dakota Access Pipeline, funded in part by Phillips 66, acknowledging complaints from the Standing Rock Sioux and other tribal nations that their concerns had not been fully heard before federal overseers approved a pipeline that the tribe said could damage their water supplies and ancestral cultural sites. Photo: Joe Brusky Flickr Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Meenal Vamburkar writes at Bloomberg that the Obama administration's halt on work on a stretch of land where Energy Transfer Partners, partly owned by Phillips 66, is building its controversial Dakota Access oil pipeline could threaten to thrust the fate of the project into the hands of the next president. The government's intervention leaves Energy Transfer officials in limbo, whereas "at least with the court they had some certainty on timelines and how things are moving forward. Here they have no idea yet when this review is going to be complete," said Brandon Barnes, a Bloomberg Intelligence analyst. Though he said he sees no threat yet to completing the project on schedule by the end of the year, "we don't know how long this delay will last."

The question is whether "the prospect for future changes alleviates tension sufficiently so that things simmer down and the pipeline can go forward," said Christine Tezak, managing director at research firm ClearView Energy Partners in Washington. "If tensions don't diffuse, I don't know when we'll see it." The best-case scenario is a few months of delay, which could mean the project falls into the hands of the next administration, she said.

Last year, the Obama administration intervened to reject plans for Keystone. President Barack Obama said the project - which had been the subject of heated debate for seven years - wouldn't make a meaningful contribution to the U.S. economy, lower gasoline prices or increase the country's energy security. The Dakota Access case highlights "the need for a serious discussion on whether there should be nationwide reform with respect to considering tribes' views on these types of infrastructure projects," the Justice Department said, noting a plan to invite tribes to formal consultations this fall. "It was absolutely the right move," said Jane Kleeb, president of activist group Bold Alliance and, before the current battle, a prominent opponent of TransCanada Corp.'s Keystone XL pipeline. "They listened to the people on the ground and really looked at what's been happening."[219]

According to Reuters, should the pipeline be delayed for a substantial period, it would affect producers who had counted on demand for oil to be rapidly shipped to the U.S. Gulf, as well as shippers who could find themselves stuck with crude, putting them at risk of unloading it at a loss. It is unclear what the workaround will be if it is unable to build on the current route, though such reroutes can be costly. Other North American pipelines have in the past been rerouted in response to protests. Brigham McCown, the former head of the U.S. Pipeline and Hazardous Materials Safety Administration under George W. Bush, said that reroutes can be fairly expensive, particularly if it needs to be moved substantially away from the locale of a dispute. "It could delay a project by years. If you're moving the pipeline to an area that's far enough, you may need to go through the regulatory process gain and get permits like ones for water and endangered species. It takes time," McCown said.

The lack of pipeline infrastructure also creates a problem for shippers. There is little commercial storage available in North Dakota, so storing large volumes is not a possibility. Shippers may have no choice but to sell off the oil at a loss, transport it via more expensive rail routes, or move crude through already-crowded pipelines to the U.S. storage hub of Cushing, Oklahoma. That would hurt cash-strapped Bakken producers already dealing with the two-year global oil market rout, because of competitive prices from foreign imports. "In the absence of a new alternative, (Bakken) crude will have to use the existing infrastructure to move," said Sandy Fielden, the director of research for commodities and energy at Morningstar. "Producers will have to take lower prices to compete with imports."[220]

Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

[edit] September 9, 2016: US Suspends Work on Part of Phillips 66 Funded Dakota Access Pipeline

The New York Times reported on September 9, 2016 that the federal government has temporarily blocked construction on part of Dakota Access Pipeline, funded in part by Phillips 66, acknowledging complaints from the Standing Rock Sioux and other tribal nations that their concerns had not been fully heard before federal overseers approved a pipeline that the tribe said could damage their water supplies and ancestral cultural sites. The Justice Department and other agencies called for “serious discussion on whether there should be nationwide reform with respect to considering tribes’ views on these types of infrastructure projects.” The government’s move, announced minutes after a federal judge rejected efforts by the Standing Rock Sioux, appeared to seek to ease tensions and reset the terms of a passionate debate that has cast the 1,170-mile Dakota Access pipeline either as an economic boon for the Plains or a threat to Native American sovereignty, waters and lands.

In a joint statement from the Departments of Justice, the Interior and the Army, the government announced that the pause applied to the pipeline’s path across a sliver of federal lands and under a dammed section of the Missouri River known as Lake Oahe. The lake, created by government-built dams a half-century ago, is a water source for the Standing Rock Sioux and a focal point of the dispute. The Army Corps of Engineers intends to review its previous decisions under federal environmental and other laws that had given approval for the pipeline. The government also urged the company building the pipeline to “voluntarily pause” all construction for 40 miles around Lake Oahe. The rest of the pipeline construction would not be affected.

“Today’s news is a stunning development,” said Jan Hasselman, a lawyer with Earthjustice, an environmental legal group that is representing the Standing Rock Sioux. “It vindicates what the tribe has been saying form the beginning: The process was wrong, and the legal standards for projects like these need reform.”[221]

The Department of Justice, the Department of the Army and the Department of the Interior issued a statement regarding Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers that included the following:

“We appreciate the District Court’s opinion on the U.S. Army Corps of Engineers’ compliance with the National Historic Preservation Act. However, important issues raised by the Standing Rock Sioux Tribe and other tribal nations and their members regarding the Dakota Access pipeline specifically, and pipeline-related decision-making generally, remain. Therefore, the Department of the Army, the Department of Justice, and the Department of the Interior will take the following steps. The Army will not authorize constructing the Dakota Access pipeline on Corps land bordering or under Lake Oahe until it can determine whether it will need to reconsider any of its previous decisions regarding the Lake Oahe site under the National Environmental Policy Act (NEPA) or other federal laws. Therefore, construction of the pipeline on Army Corps land bordering or under Lake Oahe will not go forward at this time. The Army will move expeditiously to make this determination, as everyone involved — including the pipeline company and its workers — deserves a clear and timely resolution. In the interim, we request that the pipeline company voluntarily pause all construction activity within 20 miles east or west of Lake Oahe.[222]

Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

[edit] September 9, 2016: Phillips 66 Finalizes Sale of Whitegate Refinery to Irving Oil

After almost four years of talking about selling Whitegate Refinery, PR Newswire reported on September 9, 2016 that Irving Oil has assumed full ownership of Whitegate Refinery and will continue full operation of the facility, including maintaining its existing workforce. "Whitegate is a great facility, and is a good fit for our company," says Arthur Irving, Chairman of Irving Oil. "We are happy to welcome the Whitegate team to Irving Oil and we are looking forward to working together."[223] Greg Garland first told reporters on December 13, 2012 that Phillips would likely look to sell its Whitegate refinery in Cork, Ireland.[224]

[edit] September 7, 2016: Judge Extends Restraining Order on Phillips Partners Sacagawea Pipeline

Wday reported on September 8, 2016 that U.S. District Judge Daniel Hovland extended the order that was requested by Paradigm Energy Partners, which is constructing two pipelines under Lake Sakakawea to transport oil and natural gas. The Sacagawea Pipeline Company is a joint venture owned 50 percent by Phillips 66 Partners. The Three Affiliated Tribes issued a cease and desist order to halt construction under the lake, which tribal leaders say required permission from the tribe. Paradigm then sued Chairman Mark Fox and Tribal Police Chief Nelson Heart in federal court, arguing the tribe has no authority to halt construction. Hovland granted Paradigm’s request for a temporary restraining order on Aug. 23 and construction on the pipeline resumed. In extending the order through Sept. 19, Hovland wrote that he needs additional time to “fully consider the complex legal issues” that are under consideration.[225]

[edit] September 4, 2016: Protests Turn Violent at Phillips 66 Funded Dakota Access Pipeline As Tribe Accuses Company of Desecrating Sacred Sites

Protests Turn Violent at Phillips 66 Funded Dakota Access Pipeline. Protests against the Dakota Access Pipeline, owned in part by Phillips 66, turned violent as demonstrators supporting the Standing Rock Sioux Tribe faced off with private security officers from Dallas-based Energy Transfer Partners and security officers threatened protesters with dogs.

Tim Mentz Sr., who helped start the Standing Rock Sioux Tribe Tribal Historic Preservation Office, said bulldozers had likely dug through burial grounds with little regard and without allowing members of the tribe a chance to look for human remains. Photo: Democracy Now
Frank Phillips Respected Native Americans' Rights and Traditions. Phillips 66 founder Frank Phillips was well known for the respect he showed towards Native Americans, a respect that was fully reciprocated. On March 28, 1931, Frank Phillips was adopted into the Osage Tribe in a ceremony held at Woolaroc. Following the ceremony, Frank - Eagle Chief - was dressed by the Osage Chiefs in an official costume and was presented with a split buffalo hide by Zack Miller of the 101 Ranch. The adoption resolution was etched in English and Osage on the hide. It marked the first time the Osage had ever adopted a white person into their tribe.

The Osage Nation Supports the Standing Rock Sioux. The Osage Nation is providing emergency supplies to the protesters at Standing Rock and has issued a proclamation supporting Standing Rock opposition to the Dakota Access Pipeline. Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners. Photo: Woolaroc

NPR reported on September 4, 2016 that protests against the Dakota Access Pipeline, owned in part by Phillips 66, turned violent as demonstrators supporting the Standing Rock Sioux Tribe faced off with private security officers from Dallas-based Energy Transfer Partners and security officers threatened protesters with dogs. The Morton County Sheriff's Department said protesters marched from their encampment onto private lands, where the pipeline is being constructed. "Once protestors arrived at the construction area, they broke down a wire fence by stepping and jumping on it," the sheriff's office said. "According to numerous witnesses within five minutes the crowd of protestors, estimated to be a few hundred people became violent. They stampeded into the construction area with horses, dogs and vehicles." the Morton County Sheriff's Department said protesters marched from their encampment onto private lands, where the pipeline is being constructed. "Once protestors arrived at the construction area, they broke down a wire fence by stepping and jumping on it," the sheriff's office said. "According to numerous witnesses within five minutes the crowd of protestors, estimated to be a few hundred people became violent. They stampeded into the construction area with horses, dogs and vehicles."[226]

According to KCTV, an estimated 500 protesters entered the construction zone. Pipeline security officers told authorities they were jabbed with fence posts and flag poles during the altercation. Witnesses report that attack dogs and tear gas were allegedly used on protesters. "They were able to stop the pipeline by giving them the run over the next ridge," said George Henry, a bystander. "But understand a few of the warriors received the gas." "I wasn't expecting them to mace, it came out of nowhere," one protester said. "They let the dogs loose on a horse, and they maced a woman in the face, this close range, that's what started it all." A spokesperson for Morton County Sheriff's Department said protestors did assault security officers working for Dakota Access.[227]

Protesters disputed the authorities' account, CNN affiliate KFYR said. Demonstrators said the guards sprayed many of the activists with pepper spray and tear gas, and some protesters were injured by the guards' dogs. "It was kind of scary," Lonnie Favel told KFYR. "A lot of people are out here with their children. Accidents happen all the time with dogs, and people could really get hurt."[228]

According to Indian Country Media, The Standing Rock Sioux Tribe filed an emergency motion Sunday for a temporary restraining order to prevent further destruction of the Tribe’s sacred sites by Dakota Access Pipeline. “On Saturday, Dakota Access Pipeline and Energy Transfer Partners brazenly used bulldozers to destroy our burial sites, prayer sites and culturally significant artifacts,” Tribal Chairman David Archambault II said. “They did this on a holiday weekend, one day after we filed court papers identifying these sacred sites. The desecration of these ancient places has already caused the Standing Rock Sioux irreparable harm. We’re asking the court to halt this path of destruction.”

“Destroying the Tribe’s sacred places over a holiday weekend, while the judge is considering whether to block the pipeline, shows a flagrant disregard for the legal process,” said Jan Hasselman, attorney for the Standing Rock Sioux. “The Tribe has been seeking to vindicate its rights peacefully through the courts. But Dakota Access Pipeline used evidence submitted to the Court as their roadmap for what to bulldoze. That’s just wrong.”[229]

NPR reported on September 6, 2016 that the U.S. Army Corps of Engineers says it does not oppose the temporary halt of construction on the Dakota Access Pipeline, owned in part by Phillips 66. Over the weekend, the tribe filed an emergency motion asking the court to halt construction of the pipeline. In one filing, Tim Mentz Sr., who helped start the Standing Rock Sioux Tribe Tribal Historic Preservation Office, said bulldozers had likely dug through burial grounds with little regard and without allowing members of the tribe a chance to look for human remains. "The Corps acknowledges that the public interest would be served by preserving peace near Lake Oahe until the Court can render its well-considered opinion on Plaintiff's Motion for Preliminary Injunction," the Corp said. "The Corps therefore does not oppose this short and discrete temporary restraining order."[230][231]

The St. Louis Post-Dispatch reported on September 7, 2016 that U.S. District Judge James Boasberg issued an order that work will temporarily stop between North Dakota's State Highway 1806 and 20 miles east of Lake Oahe, but will continue west of the highway because he believes the U.S. Army Corps of Engineers lacks jurisdiction on private land. The judge said he will rule by the end of Friday on the Standing Rock Sioux Tribe's challenge of federal regulators' decision to grant permits to the Dallas, Texas-based operators of the Dakota Access Pipeline, which will cross North Dakota, South Dakota, Iowa and Illinois. Standing Rock Sioux tribal chairman Dave Archambault II issued a statement after the ruling, saying: "Today's denial of a temporary restraining order ... west of Lake Oahe puts my people's sacred places at further risk of ruin and desecration." Attorney Jan Hasselman with Earthjustice, who filed the broader lawsuit on behalf of the tribe, noted the tribe will "know more by the end of the week about where we're heading."

Over the weekend, workers allegedly bulldozed sites on private land that Hasselman said in court documents was "of great historic and cultural significance to the tribe." The tribe's cultural expert, Tim Mentz Sr., said in court documents that the tribe believes there are human remains in the area and that it wants "an opportunity to rebury our relatives." Lawyers for Energy Transfer Partners filed court documents Tuesday morning denying that workers have destroyed any cultural sites and asking the judge to reject the tribes' request for a temporary work stoppage. The company said it "has taken and continues to take every reasonable precaution" to protect cultural sites.[232]

Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

[edit] September 2, 2016: Osage Nation Sends Support to Standing Rock Sioux Protesting Phillips 66 Funded Dakota Access Pipeline

Osage Nation Sends Support to Standing Rock Sioux Protesting Phillips 66 Funded Dakota Access Pipeline. “The Osage Nation supports the people of Standing Rock who are protecting the land and waters,” said Osage Nation Principal Chief Geoffrey M. Standing Bear of the situation. “People everywhere should think hard about the priorities of our society. Should the earth be used up by the human race or should we respect the limits of the earth?” Photo: Osage Nation Principal Chief Geoffrey M. Standing Bear Osage Nation

Bartlesville Radio reported on September 2, 2016 that the Osage Nation has expressed their support for the Standing Rock Sioux as they continue to protest the development of the Dakota Access Pipeline, owned in part by Phillips 66. “The Osage Nation supports the people of Standing Rock who are protecting the land and waters,” said Osage Nation Principal Chief Geoffrey M. Standing Bear of the situation. “People everywhere should think hard about the priorities of our society. Should the earth be used up by the human race or should we respect the limits of the earth?”

The Osage Nation is providing emergency supplies to the protesters at Standing Rock. Some of the items the Osages have shipped to those camped at Cannonball River include: 720 blankets, 72 all-weather heavy-duty flashlights and batteries, and 100 hand-held flashlights with batteries. More supplies will be coming from the Osage Nation and Osage Casinos. “Our Chief asked our casino staff last week to mobilize vendors and resources in support of our brothers and sisters at Standing Rock, after we heard the water supply had been cut off to the Cannonball River gathering,” said Byron Bighorse, CEO of Osage Casino. “After finding out that water was in route to them, we asked what other vital provisions they needed. It was determined that blankets, flashlights and batteries were a priority, so we immediately arranged for those items to be rush shipped to the Standing Rock Sioux Tribe organizers. We are honored to help,” added Bighorse.

The Sioux Tribe website calls this “another chapter in the long history of the federal government granting the construction of potentially hazardous projects near or through tribal lands, waters, and cultural places without including the tribe.”[233][234]

[edit] September 2, 2016: Phillips 66 Donates $11,000 Towards Walking Track at Redbud Creek

The Ponca City News reported on September 2, 2016 that Phillips 66 donated $11,000 and the Woodlands Parent Teacher Association (PTA) donated another $5,000 for a one-quarter mile long walking track at Redbud Park near Woodlands School. In appreciation of the grant from Phillips 66, the track was named The Phillips 66 Walking Track at Redbud Park.

The school plans to require students to walk or run a lap around the track each day at the beginning of recess, with additional laps encouraged. In addition, the track will be used often for P.E. running activities. At other times, classes will take a “brain break” by running or walking a few laps before returning to class. The track is open for public use in the park.[235]

[edit] September 2, 2016: Court to Rule if Phillips 66 Funded Sacagawea Pipeline Needs Tribal Consent to Drill Under Lake Sakakawea

The Jamestown Sun reported on September 2, 2016 that a federal judge will issue what could be a precedent-setting decision after hearing arguments on whether Paradigm Energy Partners LLC, owned 50 percent by Phillips 66 Partners, needed consent from American Indian tribes to drill two pipelines through tribally owned minerals under North Dakota's largest body of water. After nearly five hours of testimony and legal arguments on September 1, 2016 in U.S. District Court in Bismarck, Judge Daniel Hovland took the matter under advisement, allowing drilling under Lake Sakakawea to continue until he issues his ruling while also lamenting the lack of legal opinions offered by attorneys and previous case law on the issue. "It sounds like I'm going to be left to interpret this with no guidance from anybody," Hovland said. Paradigm Energy Partners LLC has already completed a $125 million oil pipeline under the lake and is boring the hole for a companion $16.6 million natural gas pipeline over the objections of the Mandan, Hidatsa and Arikara Nation, otherwise known as the Three Affiliated Tribes. The hearing on Paradigm's request for an injunction against the tribe ended without a firm timeline for Hovland's ruling, but the judge noted that the restraining order expires on Monday or Tuesday and he can extend it for 14 days for "good cause." "Certainly, in my view, good cause exists because I've got a multitude of issues to sort through," he said.

Tribal officials said Paradigm offered up to $2 million during a June 9 council meeting to resolve the right-of-way and other issues related to the pipelines. "And I believe they said they had a check there," Tribal Attorney Caleb Dog Eagle recalled. Paradigm CEO Troy Andrews said that while the company never believed it needed the tribes' legal consent, "I wanted to get a deal done."[236]

[edit] September 1, 2016: Thirty Arrested in Iowa in Bid to Disrupt Phillips 66 Funded Dakota Access Pipeline

Thirty Arrested in Bid to Disrupt Phillips 66 Funded Dakota Access Pipeline. Thirty activists were arrested on the Farm Progress grounds in Boone, Iowa in an effort aimed at disrupting construction of the Dakota Access pipeline. Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners. Photo: Bryan Houlgrave

The Des Moines Register reported on September 1, 2016 that 30 activists were arrested on the Farm Progress grounds in Boone, Iowa in an effort aimed at disrupting construction of the $3.8 billion Dakota Access pipeline, funded in part by Phillips 66. The protest represented one of the largest demonstrations yet in Iowa against the four-state pipeline project. It also was the first time a formal effort was made to encourage a large number of arrests in a bid to obstruct construction work in Iowa. Organizers vowed afterward that additional demonstrations will be forthcoming, along with more arrests. Crystal Defatte, 31, of Bettendorf, a stay-at-home mother with three children, was among those arrested as she stood with other protesters in solidarity against the pipeline project. "Every year you hear about oil spills. I don't want oil in the water that my children drink. This is a moral responsibility for me," Defatte said.

A representative of Precision Pipeline, a contractor for Dakota Access, told the protesters they were not welcome and asked them to leave after they tried to create human chains to block four entrances to the site. Authorities then repeatedly told the protesters they had the opportunity to leave without being taken into custody, but all of those arrested refused to move.

Business leaders and union construction workers have lined up in support of the pipeline project, citing positive economic benefits and a desire for U.S. energy security.[237]

There were no violent events during the protest, and law enforcement officials at the site expressed satisfaction with how it unfolded. Among the protesters was Dick Lamb, who owns land a few miles from the protest site through which the pipeline is passing. "They are tearing through (our property), separating the precious topsoil," Lamb said. "We feel betrayed by our state government, all three branches of it. They didn't stop (the pipeline). They enabled it."[238] Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

[edit] August 31, 2016: Tyler Crowe Says Phillips 66 is One of the Best-Run Companies in the Oil and Gas Sector

Phillips 66 is One of the Best-Run Companies in the Oil and Gas Sector. According to Tyler Crowe, Phillips 66 is one of the three best run companies in the oil and gas sector - largely because CEO Greg Garland (right in photo) has done an admirable job running the company -- and allocating capital wisely. Photo by Dr. S. J. Pickens

Tyler Crowe wrote at The Motley Fool on August 31, 2016 that he thinks Phillips 66 is one of the three best run companies in the oil and gas sector - largely because CEO Greg Garland has done an admirable job running the company -- and allocating capital wisely -- since it was spun out of ConocoPhillips in 2012. Crowe says that refining and marketing produces the lion's share of the company's cash flow and profits but the growth prospects in refining are minimal, and can eat up huge amounts of capital while taking a very long time to pay off. "But the refining business also gives the company a big advantage over its integrated and producer peers. They have felt the brunt of low oil and gas prices on their bottom lines, while Phillips 66 has continued to generate big cash flows. And it's how Garland and team treat those cash flows -- and what they don't do with them -- that emphasizes how well-run the company is," writes Crowe. "Garland has so far allocated capital to growth projects in the midstream and petrochemicals space, expanding the company's own capacity instead of making splashy acquisitions that often don't generate the promised returns. By staying focused on internal growth, the company avoids a lot of the pitfalls that come with big acquisitions."[239]

[edit] August 30, 2016: Judge Rejects Motion to Restrict Protesters of Phillips 66 Funded Dakota Access Pipeline

Judge Rejects Motion to Restrict Protesters of Phillips 66 Funded Dakota Access Pipeline. Federal udge Rebecca Goodgame Ebinger has denied a request for a temporary restraining order to prevent activists from interfering with construction in Iowa of the Dakota Access Pipeline, owned in part by Phillips 66. Dakota Access similarly tried to block demonstrators in North Dakota, where an ongoing protest by the Standing Rock Sioux tribe against the pipeline has expanded to thousands of people. Photo: Protesters in San Francisco by Peg Hunter Flicker Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

The Des Moines Register reported on August 30, 2016 that a federal judge in Des Moines has denied a request for a temporary restraining order to prevent activists from interfering with construction in Iowa of the Dakota Access Pipeline, owned in part by Phillips 66. The ruling by Judge Rebecca Goodgame Ebinger means protests aimed at halting the $3.8 billion pipeline project will apparently proceed Wednesday in rural Boone County. Ed Fallon, a leader of Bold Iowa, one of the anti-pipeline groups, said he anticipates 50 to 100 people will participate in the protests in the Pilot Mound area, and about 20 activists will risk arrest in an effort to halt the pipeline project. The Dakota Access petition was aimed at restricting Iowa Citizens for Community Improvement and Bold Iowa, both of which strongly oppose the pipeline project, as well as "unknown parties." CCI and Bold Iowa issued defiant statements after the judge's ruling, although both groups have pledged that any protests will be non-violent. However, some activists have said they will engage in civil disobedience in an effort to halt construction of the pipeline. “We have been in this pipeline fight for over two years, and have vowed to use all of the tools available to us in our fight,” said Adam Mason, state policy director at Iowa CCI. “We will not be deterred or bullied by Big Oil.”

Dakota Access, a unit of Dallas-based Energy Transfer Partners, had asked the court to keep protesters at least 25 feet away from the pipeline project, suggesting it would still allow protesters to exercise their First Amendment rights of free speech.[240] Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

Dakota Access similarly tried to block demonstrators in North Dakota, where an ongoing protest by the Standing Rock Sioux tribe against the pipeline has expanded to thousands of people. Standing Rock Tribal Chairman Dave Archambault II wrote in an New York Times op-ed that the overblown reaction on the part of the oil giant, as well as North Dakota Governor Jack Dalrymple—who declared a state of emergency over the protests—violated civil and human rights and amounted to the local government "act[ing] as the armed enforcement for corporate interests."

Meanwhile, another federal judge is expected to issue a ruling by Sept. 9 as to whether or not the Army Corps of Engineers violated the Standing Rock Sioux's treaty rights in approving the pipeline.[241]

[edit] August 30, 2016: Phillips 66 Cuts Production at Bayway Refinery

Phillips 66 Cuts Production at Bayway Refinery. Phillips 66 has cut production by roughly 5 percent at Bayway Refinery amid weak refining margins, according to a source familiar with the refinery's operations. Photo: William Hartz Flicker Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Reuters reported on August 30, 2016 that Phillips 66 has cut production by roughly 5 percent at Bayway Refinery amid weak refining margins, according to a source familiar with the refinery's operations. The U.S. gasoline crack spread, an indicator of how much refiners make from converting a barrel of oil into a barrel of gasoline, remains at its lowest level in the past five years. The U.S. diesel crack spread also remains at five-year lows. U.S. and global refining margins have been hurt by historically high gasoline and diesel inventories. Refining executives and analysts across the globe are predicting refiners are going to be forced to scale back production to reduce inventories, balance the market and boost margins. East Coast refineries see some of the weakest margins due in part to their supply constraints, and experts predict they would be among the first to cut runs.[242]

[edit] August 29, 2016: Phillips 66 Senior Vice President for Health, Safety and Environment to Retire

Houston Business Journal reported on August 29, 2016 that Debbie Adams, Senior Vice President for Health, Safety and Environment, will retire Aug. 31 after 33 years at Phillips 66. “Debbie has had a tremendous impact on our organization throughout her entire career, and has been a great partner to me and the executive leadership team,” said Chairman and CEO Greg Garland. “Under her leadership, Phillips 66 has established itself as a safety leader, achieving first-quartile performance the past two years for both combined total recordable rate and lost workday case rate.” Adams will be succeeded by Jay Churchill who got his start at Conoco in 1979 as a plant process engineer at the Lake Charles Refinery in Louisiana.[243]

[edit] August 27, 2016: Worker Killed in Accident on Phillips 66 Funded Dakota Access Pipeline

The Associated Press reported on August 27, 2016 that a man working on the four-state Dakota Access Pipeline, funded in part by Phillips 66, was killed in an apparent accident in western North Dakota, said North Dakota Public Service Commissioner Brian Kalk. Kalk said the man was on a tractor Thursday, covering the underground pipeline with soil and grass seed. Kalk said the company reported Friday that the man suffered a serious head injury, apparently while working on equipment. He was taken to a Minot hospital, where he died.[244] Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

[edit] August 27, 2016: Court Battle Brews over Phillips Funded Sacagawea Pipeline Under Lake Sakakawea

Court Battle Brews over Phillips Funded Sacagawea Pipeline Under Lake Sakakawea. The Mandan, Hidatsa and Arikara Nation asserts that Sacagawea Pipeline Company, a joint venture owned 50 percent by Phillips 66 Partners, was required but failed to get the tribe's permission to begin pipeline construction under Lake Sakakawea. The Tribal Business Council voted August 3, 2016 to issue a cease and desist order to halt all construction under Lake Sakakawea. Lake Sakakawea is the drinking water source for several western North Dakota cities, including communities on the Fort Berthold Indian Reservation. Photo of Lake Sakakawea. North Dakota Parks and Recreation Flickr Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)

The West Fargo Pioneer reported on August 27, 2016 that the Mandan, Hidatsa and Arikara Nation asserts that Sacagawea Pipeline Company, a joint venture owned 50 percent by Phillips 66 Partners, was required but failed to get the tribe's permission to begin pipeline construction under Lake Sakakawea. The Tribal Business Council voted August 3, 2016 to issue a cease and desist order to halt all construction under Lake Sakakawea. Lake Sakakawea is the drinking water source for several western North Dakota cities, including communities on the Fort Berthold Indian Reservation. "Paradigm was informed on several different occasions that the consent of the MHA Nation would not be granted unless there were adequate assurances that an oil pipeline under the lake posed no threat to the MHA Nation's water resources," Tribal Chairman Mark Fox wrote in an Aug. 8 letter. "To date, that assurance has not been provided to the MHA Nation's satisfaction." Paradigm filed a federal lawsuit on Aug. 19 against Fox and Tribal Police Chief Nelson Hart arguing they have no authority to halt construction. The company is constructing two 70-mile companion oil and natural gas pipelines that will travel from McKenzie to Mountrail counties.

The Sacagawea Pipeline is also under investigation by federal pipeline regulators after former contractors said the pipeline was installed under the lake without being properly inspected. The owner of Boyd & Co. told Forum News Service the pipeline was properly inspected and he says the claims are false accusations made by workers who were fired. About 8,980 feet of the pipeline system will pass under Lake Sakakawea via the installation of about 10,980 feet of welded steel pipeline, the Corps of Engineers said in its environmental assessment. The pipeline will be installed at least 100 feet below the lakebed through horizontal directional drilling with emergency shut-off valves on either side of the lake and around-the-clock pipeline monitoring to detect leaks.[245][246][247]

[edit] August 27, 2016: Plaquemines Parish Tries to Close Breach in Levee That Protects Phillips 66's Alliance Refinery

Levee Breach Near Phillips 66's Alliance Refinery Raises Concerns. The above photo shows Phillips 66's Alliance Refinery after Hurricane Isaac struck Louisiana in September, 2012. Plaquemines Parish Emergency Management Officials are now on high alert after a breach along the bayou side levee near Alliance Refinery. Parish Council Chair Kirk Lepine wonders if aging infrastructure can weather a hurricane or bigger storm. Photo: Lower Mississippi Riverkeeper Flooding at the Alliance Refinery in Belle Chasse, Louisiana after Hurricane Isaac] Flickr Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)
Plaquemines Parish Tries to Close Breach in Levee Breach That Protects Phillips 66's Alliance Refinery. Two days after water began pouring through a levee in Plaquemines Parish, local officials working with the Louisiana National Guard successfully plugged the 70 foot breach with sandbags. Photo: Plaquemines Parish Office of Homeland Security and Emergency Preparedness

WWL Tv reported on August 27, 2016 that Plaquemines Parish Emergency Management Officials are on high alert after a breach along the bayou side levee near the Phillips 66's Alliance Refinery raised the alarm for parish leaders. The breach was discovered where a pipeline crosses the levee. Within six hours the breach had reached 20 feet wide, prompting swift response. Plaquemines Parish crews immediately reacted. Generators were on site providing light and started to work getting 2000 pound sandbags into the breach. Low lying areas along Louisiana Highway 23 in Plaquemines parish are at risk for flooding during hurricane season. Earthen levees on either side protect homeowners and industry there. “It is a grave concern of ours, and we are monitoring it every day with the resources that we have,” says Council Chair Kirk Lepine. Emergency management says the breach does not pose a flooding threat to homes or Highway 23 right now. The water is coming in from the Barataria Bay side and moving back into the drainage canal, and then moving back to Barataria Bay.

Lepine says a hurricane could change that and wonders if aging infrastructure can weather a bigger storm. Lepine says he hopes that the levee is inspected every week, but he was not sure. Lepine says with budget cutbacks, levee monitoring is now split between departments. It's something that needs to be addressed. “Before it was inspected every week. And if there were deficiencies in the levee we were notified. We tried to stay on top of it as much as we can."[248][249]

NOLA reported on August 29, 2016 that two days after water began pouring through a levee in Plaquemines Parish, local officials working with the Louisiana National Guard successfully plugged the breach with sandbags Sunday night (Aug. 28), authorities said. The breach had widened from 20 feet to more than 70 feet, but it never threatened local residences or Louisiana 23, said Plaquemines government admininstration spokesman Michael Powell.[250]

WWL reported on August 30, 2016 that a temporary patch appears to be holding, but with a tropical system churning and gaining strength in the Gulf of Mexico, a construction crew is working around the clock to repair the gap that could threaten the only hurricane evacuation route in the lower end of the parish. Officials expect a permanent fix to be in place by Friday at the earliest. “We’re going to get it. We got it down to a trickle,” said Lonnie Davis, who owns Mega Industries, the company working on the levee repair project. “This was a raging river in here when we got here. I mean, it was really bad.” The damaged levee is part of a system of non-federal back levees designed to keep flood water off of Highway 23 – the lone route out of the lower end of the parish. “It’s protecting the residents of Myrtle Grove, Ironton, it’s protecting the Phillips 66 refinery, an entire Entergy substation that provides power to our lower end,” said Patrick Harvey, Plaquemines Parish’s emergency manager.[251]

[edit] August 26, 2016: Phillips 66 Partners to buy Chevron’s South Louisiana NGL Logistics Assets

Energy Business Review reported on August 26, 2016 that Phillips 66 Partners has entered into an agreement to acquire a natural gas liquids (NGL) logistics system in southeast Louisiana currently owned by Chevron. The system comprises nearly 500 miles of pipelines and a storage cavern connecting multiple fractionation facilities, refineries and a petrochemical facility. The acquisition includes an approximately 300-mile TENDS pipeline system, which is a bidirectional NGL pipeline system connected to third-party fractionators, refineries. Phillips 66 plans to finance the transaction with cash and borrowings under the Partnership’s revolving credit facility. “This acquisition will expand the Partnership’s NGL footprint into the Louisiana market," syas Phillips 66 Partners president. "The assets are strategically located and connect offshore production, local refineries and petrochemical facilities in south Louisiana while providing significant opportunities for fee-based growth.”[252]

[edit] August 24, 2016: Native Americans Wait on Court Decision on Controversial Phillips 66 Funded Dakota Access Pipeline

Native Americans Wait on Court Decision on Controversial Phillip 66 Funded Pipeline. At least 300 people opposed to a controversial Dakota Access Pipeline, funded in part by Phillips 66, waited anxiously outside a D.C. federal courthouse this afternoon for a decision on whether or not the project can to continue. And now they’ll have to wait just a little longer. The Standing Rock Sioux Tribe filed a lawsuit against the Army Corps of Engineers on July 27 to stop the pipeline that would cross under the Missouri River, the reservation’s sole source of water. Photo: Sierra Club

PBS reported on August 24, 2016 that at least 300 people opposed to the controversial Dakota Access Pipeline, funded in part by Phillips 66, waited anxiously outside a D.C. federal courthouse this afternoon for a decision on whether or not the project can to continue. And now they’ll have to wait just a little longer. The Standing Rock Sioux Tribe filed a lawsuit against the Army Corps of Engineers on July 27 to stop the pipeline that would cross under the Missouri River, the reservation’s sole source of water. The corps approved the pipeline last month, but the tribe argues they were not properly consulted, and that cultural and historical sites would be destroyed during construction. Judge James E. Boasberg from the United States District Court for the District of Columbia said he will make a decision about the $3.7 billion Dakota Access Pipeline on or before September 9. “We’re very concerned because construction is ongoing,” said Jan Hasselman, a lawyer with EarthJustice, an environmental advocacy organization representing the Standing Rock Sioux Tribe. “In another couple of weeks or a month there won’t be anything left to protect.” The tribe, whose land is located a half-mile south of the pipeline, has resisted the project for months. People started gathering near the construction site in Cannon Ball, North Dakota, in April to stage demonstrations. In recent weeks, hundreds more arrived, and some sparked confrontations with police and construction workers. At least 28 people people were arrested for disorderly conduct and trespassing this month. The pipeline company says it halted work after some demonstrators attacked workers with rocks and bottles. With the legal ruling delayed until next month, it is uncertain what will happen at the site and to the several hundred protesters camped nearby. “We have to play by the rules the federal government has given us,” David Archambault II, chairman of the Standing Rock Sioux Tribe, told PBS NewsHour. “We’re still going to pray and be in peace and ensure our strength in unity is powerful.”[253]

[edit] August 24, 2016: Iowa Farmers Complain that Phillips 66 Funded Dakota Access Pipeline Wrecks Their Soil

The Des Moines Register reported on August 24, 2016 that some Iowa farmers want builders of the 1,154-mile Dakota Access pipeline, owned in part by Phillips 66, to put their soil back the way they found it. Francis Goebel now has a scar running across his soybean fields where the dark, fertile topsoil is being stacked on top of several feet of hard clay mixed with clay loam and fear his soil will less suited for growing crops — and much less valuable. "Nature separated those soils for a reason, that's the way I feel," said Goebel, who runs a 164-acre century farm in Sioux County. "If nature put it there, they should put it back the way it was." Although Dakota Access is separating the rich topsoil from the soil beneath, it isn't being as careful with the next two layers, mixing the clay loam subsoil with the hard clay underneath. Goebel acknowledges he was well compensated by Dakota Access for the 12-acre easement the company obtained to cross his land. He received $21,000 per acre for the easement, plus payments for initial crop losses. But he's worried about his future corn and soybean yields. In some places, crews excavated 20 feet deep, meaning the hard clay at the bottom could end up just a couple feet from the ground. "To me, it's a scar."

Tom Konz acknowledges that it is too late for his and his neighbor's land — contractors buried the pipe last week. But he wants other Iowa landowners in the pipeline's path to remain vigilant about their soil as crews begin tearing into the ground. Konz received about $102,000 from Dakota Access, a figure that included payments for the easement, plus three years' worth of crop damage. But he said that's nothing compared with the ongoing costs of anticipated crop losses. "The rest of my life, I guarantee you will see that pipeline forever," Konz said. "It will come up as red (on a yield map). We'll fight it every year for yield loss."

But Dakota Access attorney Bret Dublinski noted that all the contested farms already had tile buried under crops to help drain fields. It is often removed, repaired and replaced, he said. "You cannot consistently argue both that Dakota Access is going to irreparably harm my soil because it hasn’t been changed in 1,000 years and then also say 'I'm concerned about my pattern tile that I put in by turning up the soil,'" Dublinski said. "… Those are arguments that simply cannot exist in the same space."[254]

[edit] August 24, 2016: Phillips 66 Shuts Gasoline-Producing Unit at Lake Charles Refinery

Reuters reported on August 24, 2016 that Phillips 66 shut a gasoline-making reformer unit at Lake Charles Refinery earlier this month, and advanced planned work on the unit, said two sources familiar with the work. The unit is slated to return to return to service in mid-September.[255]

[edit] August 23, 2016: Refinery Vessel Arrives at Ponca Refinery

The Ponca City News reported on August 23, 2016 that a 92 ton refinery vessel arrived at the Ponca Refinery on a 132 foot long trailer. The combined weight of the trailer and vessel was 180 tons.[256]

[edit] August 23, 2016: Hundreds of Native Americans Continue Months-Long Protest Against Phillips 66 Funded Dakota Access Pipeline

Native youth and supporters protest in New York against Dakota Access Pipeline. Sioux youth from the Standing Rock Indian Reservation in North Dakota rallied with supporters in Union Square after running 2,000 miles across the United States to protest the proposed Dakota Access Pipeline. Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners. Photo by Joe Catron Flickr Creative Commons. Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Nasdaq reported on August 23, 2016 that construction will remain halted on the 1,154-mile Dakota Access pipeline, owned in part by Phillips 66, as a federal judge postponed a hearing to determine whether protesters should be prevented from accessing the site near the Missouri River. Tensions between the Standing Rock Sioux tribe, which opposes the pipeline, and local police have escalated in recent weeks. More than two dozen protesters have been arrested after they blocked entry to the site 34 miles south of Mandan, N.D. The pipeline's developer, Dakota Access LLP, has filed a lawsuit seeking to block protesters from the site. Phillips 66 owns a 25% stake in the $3.7B pipeline that is being built by Energy Transfer Partners.

A coalition of Native American groups that oppose the pipeline sent out an appeal to human rights groups to come to the North Dakota site, calling the situation a crisis. The Standing Rock Sioux argue that the pipeline threatens sacred sites and poses a risk to the tribe's drinking-water supply, since they say the pipeline would cross the Missouri River just upstream from the reservation. "We are committed to peaceful defense of our water and our territory," the groups said.[257]

According to Jack Healy writing in the NY Times, people have been gathering since April, but as hundreds more poured in over the past two weeks, confrontations began rising among protesters, sheriff’s officers and construction workers with the pipeline company. Local officials are struggling to handle hundreds of demonstrators filling the roads to protest and camp out in once-empty grassland about an hour south of Bismarck, the state capital. The pipeline company says it was forced to shut down construction this month after protesters threatened its workers and threw bottles and rocks at contractors’ vehicles. Leaders from the Standing Rock Sioux tribe, whose reservation lies just south of the pipeline’s path, say the protests are peaceful. Weapons, drugs and alcohol are prohibited from the protest camp. Children march in the daily demonstrations. The protesters sleep in tents and tepees, cook food in open-air kitchens and share stories and strategies around evening campfires. There is even a day care. At morning meetings, speakers warn parents to keep their children away from the Missouri River at sunset, and remind one another they are camped out in prayer. For many, the effort was about reclaiming a stake in ancestral lands that had been whittled down since the 1800s, treaty by broken treaty. “Lands were constantly getting reduced, shaken up,” said Dave Archambault II, the tribal chairman of the Standing Rock Sioux. “I could give you a list of every wrongdoing this government did to our people. All of that is frustration pent up, and it’s being recognized.”

Energy Transfer Partners says it has the necessary state and federal permits and hopes to finish construction by the end of the year. The pipeline’s route starts in the Bakken oil fields of western North Dakota and ends in Illinois. The United States Army Corps of Engineers says it consulted extensively with tribes, including the Standing Rock Sioux, and it says that tribe has failed to describe specific cultural sites that would be damaged by the pipeline.[258] Builders say the pipeline will enable domestically produced light sweet crude oil from North Dakota to reach major refining markets in a more direct, cost-effective, safer and environmentally responsible manner. The pipeline will also reduce the current use of rail and truck transportation to move Bakken crude oil to major U.S. markets to support domestic demand. Shippers will be able to access multiple markets, including Midwest and East Coast markets as well as the Gulf Coast via the Nederland, Texas crude oil terminal facility of Sunoco Logistics Partners. According to Energy Transfer, the company holds their pipelines to a standard that exceeds state and federal regulations performing routine ground and aerial leak inspections about every 10 days, when federal rules only require these inspections every 14 days.[259]

[edit] August 23, 2016: Aging Phillips 66 Pipeline Under Rattlesnake Creek Replaced in Montana

The Missoulian reported on August 23, 2016 that Yellowstone Pipeline and Phillips 66 replaced an aging fuel pipe under Rattlesnake Creek in Missoula County, Montana that is part of a 690-mile network moving liquid fuels like gasoline and diesel between Billings and Moses Lake, Washington. Yellowstone Pipeline manages the network for Phillips 66. “Their deferred maintenance was causing concerns. If there was a break-up, there would be a lot of ice and debris that could cause scour downstream. It’s just too big a risk to leave down here," said Missoula County Environmental Health Supervisor Peter Nielsen. “The old pipeline was less than 2 feet below the streambed. We’ve been very concerned about this. The new line will be 12 or 13 feet down. This will be a lot safer when we’re done.” Yellowstone Pipeline and Phillips 66 have been replacing several water crossings in recent years, including one on the Clark Fork near Turah three years ago and one on Deer Creek east of Missoula last year. Two more replacements are expected this year, near Clinton and Bearmouth on the Clark Fork River. “Once the new line is in service, we’ll thoroughly clean the old section under the creek and permanently seal it off,” said Phillips 66 spokesman Dennis Nuss. “Our ultimate goal is to preserve and protect the creek.”[260]

[edit] August 18, 2016: Phillips Celebrates 66 Years of Splash Club Tradition in Bartlesville

Phillips Celebrates 66 Years of Splash Club Tradition in Bartlesville. The Phillips 66 Splash Club in Bartlesville is celebrating its 66th year of tradition, of fun, or hard work, of a journey to national and international significance, and of helping to mold countless children into successful adults and of excellence.

The Bartlesville Examiner-Enterprise reported on August 18, 2016 that the Phillips 66 Splash Club in Bartlesville is celebrating its 66th year of tradition, of fun, or hard work, of a journey to national and international significance, and of helping to mold countless children into successful adults and of excellence. "Who would have thought that a small deed of an idea in 1950 ... would have grown into the dream of the continuing dominance of United States swimming,” said Ken Treadway who was hired in 1950 by then Phillips Petroleum Director of Recreation Bud Browning as the first Splash Club coach. That decision put in motion an amateur organization — the longest of its kind in United States history — that has influenced the lives of thousands of Bartlesville area children. The urrent Splash Club head coach Chad Englehart feels proud to be able to help celebrate the 66th Anniversary of the founding of the club and is hoping his current swimmers participate in all the doings set for Labor Day Weekend including an alumni meet on Saturday, a gathering on Saturday evening and a picnic on Sunday at Woolaroc. “I want to show them off and show what a great crop of young people we have now in the program. I want them hear what the Splash Club has meant to USA Swimming, to Bartlesville and to the adults that will be there.”[261]

Kenneth Treadway founded the Phillips 66 Splash Club on December 6, 1950. Since then thousands of swimmers have participated, including second-generation Splash Club members. The Splash Club has developed Junior National Championship, National Championship, and Olympic Trials Qualifiers. In addition, U.S. National Team members, High School All-American Swimmers, and collegiate swimmers have been fostered by Splash Club. We are recognized as one of the finest programs in the nation including members holding state records. The team name was changed in September of 2002 to reflect the merger of Phillips Petroleum Company and Conoco to the ConocoPhillips Splash Club. In 2012 the team again changed names to Phillips 66 Splash Club to reflect the separation of Phillips 66 from ConocoPhillips.[262]

[edit] August 19, 2016: Can Phillips 66 Survive with Low Refining Margins?

Can Phillips 66 Survive with Low Refining Margins? For a company that depended on refining for over 60% of its earnings in the first half of 2015, Phillips' brutally low refining margins, which dropped 40% from a year ago, should strike any investor as an alarming development. "It's hard to look past the low refining margins and it is prudent to monitor the situation," writes David Lettis at the Motley Fool. "With strong cash flows, though, as well as multiple sources of revenue and continued investment focused on future growth, Phillips 66 remains a very strong pick for long-term investors." Photo: Photolibrarian Flickr Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)

David Lettis wrote at the Motley Fool on August 19, 2016 that for a company that depended on refining for over 60% of its earnings in the first half of 2015, Phillips' brutally low refining margins, which dropped 40% from a year ago, should strike any investor as an alarming development. But according to Lettis, despite the sharp decrease in Phillips' refining margin, though, there are a couple of reasons why the company remains well positioned for future growth. First, in its refining business, yield improvement projects at the Wood River Refinery are scheduled for completion in the third quarter. Additionally, improvements to increase heavy Canadian crude utilization at its Billings Refinery should be complete in the first half of 2017, and modernization projects to increase gasoline yields at its Bayway Refinery will finish up in 2018. Second, Phillips 66's midstream business is on the right track with joint ventures to develop the Dakota Access and Energy Transfer Crude Oil pipelines remaining on schedule to come online by the end of 2016 and an expansion project at its Beaumont Terminal will add 3.2 million barrels of new storage capacity by mid-2017. Finally while low refining margins are hard to overcome, Phillips actually increased its marketing fuel margins and brought in higher adjusted marketing earnings than a year ago. "This is vitally important for its long-term profitablity as it shows how the company can work through hard times for a core business," says Lettis. "It's hard to look past the low refining margins and it is prudent to monitor the situation. With strong cash flows, though, as well as multiple sources of revenue and continued investment focused on future growth, Phillips 66 remains a very strong pick for long-term investors."[263]

Jason Hall added at the Motley Fool on September 1, 2016 that one of the big reasons Warren Buffett has been loading up on Phillips 66 is that capital allocation is one of a CEO's most important jobs and Greg Garland recognizes this and has focused Phillips' growth investments on the midstream and petrochemicals businesses -- only spending on the refining business to maintain it and improve operations, versus building more refining capacity at a lower rate of return.

Warren Buffett also says that the best long-term investments are often businesses that have strong competitive and economic advantages over their competitors, which they regularly work to strengthen. Phillips 66's refining business certainly has this characteristic. "Refineries, as long as they are well-maintained and run at a high capacity, can generate huge cash flows, which on the surface can make them very attractive businesses," writes Hall. "But at the same time, building a new refinery costs billions of dollars, and growth in demand for refined products is relatively low. In other words, it's just not worth the start-up costs to build a new refinery, based on the limited need. Combined, these two things make a relatively high barrier to entry in the refining business, helping protect Phillips 66 and its competitors from any new entrants into the market."[264]

[edit] August 17, 2016: Phillips 66 Seeks 6 Months Delay in Hearing for Santa Maria Refinery Rail Spur Project

The New Times reported on August 17, 2016 that after months of lengthy hearings on Phillips 66’s project, which would allow the company to bring in crude oil by train to its Santa Maria Refinery, Phillips 66 requested that a planned comission meeting on its proposed rail spur extension project scheduled for Sept. 22 be pushed back until March 2017. Phillips said it wanted to wait until the Federal Surface Transportation Board ruled on a petition involving an oil train-related project in Benicia. The company in charge of that project, Valero, is seeking declaratory relief from the three-person federal board after the oil company’s proposal to transport 50 trains per-day carrying crude oil through the city was denied by the Benicia Planning Commission and appealed to its City Council. At the heart of the Benicia case is the issue of pre-emption, or the extent of a local government’s authority over interstate rail transportation, which is the purview of federal government. The same issue is at play in San Luis Obispo. The hearings on the Phillips 66 project featured discussions over the county’s ability to set limits or conditions on the project. “In the interest of efficiency of the commission as well as the planning staff, we believe it would be prudent to further continue the hearing on Phillips 66’s Rail Spur Extension Project until March 2017, so that all parties can benefit from the direction expected from the Surface Transportation Board,” the letter from Phillips read.[265]

Local activists fiercely oppose the Phillips project. Opponents of Phillips 66's plan to bring oil trains to Santa Maria Refinery gathered for a "Stop the Oil Trains Rally" on July 9, 2016 at Mitchell Park in downtown San Luis Obispo. Guest speakers at the rally included Arlene Burns, mayor of Mosier, Oregon, who talked about her experiences being a part of a blast zone after a Union Pacific Railroad train, towing cars filled with crude oil, derailed and exploded near her community. Fourteen cars were involved in the June 4 Columbia River Gorge accident, causing the evacuation of schools in Mosier and the shutdown of Interstate 84 between Hood River and The Dalles.[266]

[edit] August 15, 2016: No Injuries From Fire at Phillips 66's Lake Charles Refinery

No Injuries From Fire at Phillips 66's Lake Charles Refinery No injuries have been reported in a fire that started in a processing unit at Phillips 66's Lake Charles Refinery. The fire started when a heater tube failed as a hydrogen unit was being shut down at the plant, according to sources familiar with operations. As a safety precaution, both Phillips 66 employees and contract workers were evacuated from the area, but allowed to return within the hour. Photo: KPLC

Reuters reported on August 15, 2016 that no injuries have been reported in a fire that started in a processing unit at Phillips 66's Lake Charles Refinery. The fire started when a heater tube failed as a hydrogen unit was being shut down at the plant, according to sources familiar with operations. A Phillips 66 representative did not immediately comment.[267] As a safety precaution, both Phillips 66 employees and contract workers were evacuated from the area, but allowed to return within the hour.

Calcasieu Emergency Director Dick Gremillion arrived at the scene soon after it started. "They were bringing a unit down and a fire occurred," Gremillion said. "It was quickly extinguished. It did make a lot of black smoke. A lot of people were concerned about it but there is no offsite impact. The workers were brought - this is a normal safety routine that they do - workers were brought out so they could do an accountability on them, make sure they had everyone accounted for. And they completed that and they've all gone back into the plant now." Westlake Police Chief Chris Wilrye says at no time were nearby residents in danger. "Our concern is for our citizens of the community of Westlake and to make sure there was no impact to the community and there was no evacuation that needed to be taken place outside of Phillips 66 property," he said. "From speaking with the people here at Phillips 66 there's no danger to the community."[268]

[edit] August 11, 2016: ConocoPhillips Announces More Layoffs

News on 6 reported on August 11, 2016 that ConocoPhillips has announced another round of layoffs, this time for 6 percent of its employees worldwide. The company employs 15,600 people worldwide including 1,400 employees who work in Bartlesville. ConocoPhillips has not announced how many employees will be laid off in Bartlesville, and a spokesman says the company is still sorting that out. “As far as what the impact will be to Bartlesville, since we’re still early in the process, that has yet to be determined. However, we will know more in the next several weeks as we work through our formal process,” said David Austin. Last year, ConocoPhillips laid off 10-percent of its workforce worldwide including about 170 employees laid off in Bartlesville.[269]

"In 2012 ConocoPhillips split into two companies - an upstream company focused on oil exploration, and a downstream company, called Phillips 66, that is focused on refineries, chemical plants, and midstream. The Ponca City refinery went with Phillips 66 which has not announced layoffs," says Hugh Pickens, an investor who closely follows Phillips 66. "The Ponca City Refinery, which employs about 700 Phillips 66 employees and contractors, is running at almost 100% capacity and is considered to be one of the best run and most profitable of Phillips 66's fifteen worldwide refineries."

However there are some Ponca City residents who work for ConocoPhillips and commute to Bartlesville who could be impacted by the ConocoPhillips layoffs. In April, 2015 a previous ConocoPhillips' reduction in force affected some employees commuting from Ponca City to Bartlesville for a number of years. A Ponca City woman employee, who did not want to be identified told The Ponca City News, she was terminated from ConocoPhillips and sent home with others from the Bartlesville operations by cab. The 28-year employee, who had car-pooled, was terminated April 1, 2015 and transported back to Ponca City in a cab paid for by the company. A spokesman for ConocoPhillips said, “Within Bartlesville, less than 4 percent of our employees will be impacted by these workforce reductions. Anytime you have to do these kinds of reductions, it’s always very difficult.”[270]

Empty Office Buildings at Phillips 66's Ponca City Facility. ConocoPhillips has announced another round of layoffs, this time for 6 percent of its employees worldwide. Last year, ConocoPhillips laid off 10-percent of its workforce worldwide including 170 employees in Bartlesville. ConocoPhillips has not announced how many employees will be laid off in Bartlesville in this round of cutbacks. In 2008 ConocoPhillips downsized their operation in Ponca City as about 700 office worker positions in Ponca City were relocated to Bartlesville or Houston. Photo: Hugh Pickens

In 2008 ConocoPhillips downsized their operation in Ponca City as about 700 office worker positions in Ponca City were relocated to Bartlesville or Houston. "Consolidation and relocation are options we're looking at," said company spokesman Tracy Harlow. "Any and all options are still on the board right now." Most of ConocoPhillips' nonrefinery jobs in Ponca City were focused in the credit card, information technology, facilities and other support operations, Harlow said. A steering committee, including ConocoPhillips managers, was looking at options. The review started November 2008 and had not narrowed into specifics so far, Harlow said. The 750 people employed in refinery operations would not be affected by the review.[271]

[edit] August 10, 2016: Retirees to Breakfast with Ponca Refinery Manager Tim Seidel

The Ponca City News reported on August 10, 2016 that the Conoco, ConocoPhillips and Phillips 66 retirees will “Breakfast with Tim” at 830am on August 23, 2016 in the Atrium Cafeteria on the Phillips66 campus to hear the latest updates about Phillips 66 and the Ponca Refinery.[272]

[edit] August 8, 2016: Phillips 66 Donates $20,000 to New Emergency Resource Agency in Ponca City

The Ponca City News reported on August 8, 2016 that Phillips 66's Ponca Refinery donated $20,000 for the New Emergency Resource Agency in addition to some much-needed office furniture. The New Emergency Resource Agency is a part of the network of more than 825 charitable feeding programs in 53 central and western counties that feed more 90,000 hungry Oklahomans each week. The New Emergency Resource Agency serves about 70 households each week in Ponca City and is located at 500 North First Street. The New Emergency Resource Agency is experiencing an increase in the need for food assistance and relies on its partnership with the Regional Food Bank of Oklahoma to fill the gap. “It’s constant, a slow steady increase and has been for the last year and a half to two years,” said Tom Short, director at New Emergency Resource Agency. “We gave away more than 300 food boxes in three hours.”[273]

[edit] August 5, 2016: Former Worker Says Phillips Funded Sacagawea Pipeline at Risk for Oil Leak

The Dickinson Press reported on August 5, 2016 that a former crew member on Sacagawea Pipeline under construction in North Dakota claims that pipe installed under Lake Sakakawea was not properly inspected and he fears the lake could be at risk. The Sacagawea Pipeline Pipeline is being constructed by Sacagawea Pipeline Company, a joint venture owned 50 percent by Phillips 66 Partners. Federal pipeline regulators are investigating the allegations, which were also brought to the North Dakota Public Service Commission’s attention this week. The owner of the pipeline contracting company stands by the work and says the claims are false accusations made by workers who were fired. Pipeline contractor Kenny Crase writes in a sworn statement filed with the PSC and federal regulators that he was ordered to skip a final coating inspection on a section of the Sacagawea Pipeline before another contractor installed the pipe under Lake Sakakawea in July. External coating protects the steel pipe from corrosion. “To me, it’s an accident waiting to happen,” Crase said in an interview with Forum News Service.

Crase says he has 34 years of construction industry experience including working for five years in North Dakota as a pipeline inspector. On this job, he was in charge of operating a device known as a holiday detector, which finds defects or bare metal spots in the pipe coating. “The coating is on it to protect it from rusting from the outside in,” Crase said. Crase said the coating crew was not allowed to complete their work. In addition, the crew was told to stay in their trucks and not allowed to do a final inspection of the coating as another contractor installed the pipe under the lake, Crase said. “I cringed when they hooked to it and pulled it because we never made a single run through there when we didn’t find holidays, which is bare metal,” Crase said. “If I was a betting man, I’d bet there’s bare metal spots.”

Mike Boyd, owner and CEO of pipeline contractor Boyd & Co., disputes the claims. Boyd said there was a section of pipe that did not meet the standards, but those workers were fired and the coating work was redone “to perfection.” The work was also approved by inspectors working for Paradigm Energy Partners, which is part of Sacagawea Pipeline Co., Boyd said. “I have 100 percent confidence in the job that was done,” Boyd said. “It’s going under the lake, we have to do it right.”[274][275]

[edit] August 3, 2016: Phillips 66 to Pay Nearly $800,000 for Pollution Violations at Rodeo Refinery

Phillips 66 to Pay Nearly $800,000 over Pollution Violations at Rodeo Refinery. The settlement covers 87 notices of violation issued to Phillips 66 for non-compliance at its refinery from 2010 through 2014. Photo by Thomas Hawk Flicker Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

The San Francisco Chronicle reported on August 3, 2016 that Phillips 66 has agreed to pay $793,250 to settle air pollution violations at its Rodeo Refinery. The settlement covers 87 notices of violation issued to Phillips 66 for non-compliance at its refinery from 2010 through 2014. About one-third of the violations stemmed from an unplanned refinery shutdown in October of 2010, which included heavy smoke from flaring. In 2011, the company was written up three times for public nuisances after the refinery was found to be spewing odors. Finally, in June of 2012, a sour water tank ruptured at the refinery, sending numerous gases, including hydrogen sulfide, into neighboring communities, according to the air district. The Bay Area Air Quality Management District fined the Rodeo refinery $230,000 in 2014. In 2011, the U.S. Environmental Protection Agency named the refinery as the biggest releaser of toxic chemicals in the Bay Area.

“We are not anti-business or anti-refinery, but we want them to function properly, to put in place the equipment that needs to trap the gases that come out,” said Janet Pygeorge, president of Rodeo Citizens Association. “We breathe it. We live it every day. They need to think more about the public than the mighty old dollar.”[276]

[edit] August 3, 2016: Phillips 66 Finds Buyer for Whitegate Refinery

The Irish Independent reported on August 3, 2016 that after trying to sell their Ireland-based Whitegate Refinery for the past several years, Philips 66 has reached an agreement to sell the refinery to Irving Oil for an undisclosed sum. Irving Oil, which operates the largest oil refinery in Canada, said it views Whitegate as a key element in expanding their business in Europe. The processing facility is capable of handling 75,000 barrels of crude oil per day. “We are pleased to have signed an agreement to purchase the Whitegate refinery,” said Irving Oil chairman, Arthur Irving. “It’s a good day for our company and we’re looking forward to welcoming the Whitegate team to Irving Oil.” Irving Oil said it had been deeply impressed by Whitegate and its Irish workforce. The Canadian company said that the Irish plant had an operational track record that made it a perfect fit for their future development plans. Sale conditions are now being concluded and the deal is set to be formally closed by the year’s third quarter. Irving said it intends to continue full operation of the Whitegate plant and the maintenance of its existing workforce.[277]

[edit] July 29, 2016: Phillips 66's Profit Halved in Second Quarter as Earnings from Refining Plunge 75.3 percent

Reuters reported on July 29, 2016 that Phillips 66's profit halved in the second quarter as earnings from its refining business plunged 75.3 percent. Phillips 66's consolidated earnings fell to $496 million, or 93 cents per share, in the second quarter from $1.01 billion, or $1.84 per share, a year earlier. "My personal view is we've got a lot of inventory stacked up," Chief Executive Greg Garland said on a post-earnings call. "I think the industry's going to be facing run cuts in the second half of the year." Refining margins, the difference between the cost of crude and the price of refined products, have also been hit by a rise in global crude LCOc1 prices, which touched an eight-month high in June. Phillips 66's refining margin was $7.13 per barrel in the quarter, well below $8.22 per barrel estimated by Wells Fargo Securities analysts.[278]

Phillips 66's Profit Halved in Second Quarter as Earnings from Refining Plunge 75.3 percent. Phillips 66's consolidated earnings fell to $496 million, or 93 cents per share, in the second quarter from $1.01 billion, or $1.84 per share, a year earlier. "My personal view is we've got a lot of inventory stacked up," Chief Executive Greg Garland said on a post-earnings call. "I think the industry's going to be facing run cuts in the second half of the year." Photo: Scott Maxwell Flickr Creative Commons Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0)

Garland expressed confidence in Phillips' diverse business model. Even though Refining struggled, Phillips 66 showed that it pays to have assets in Midstream & Marketing instead of just pure refining, like other independent refiners. "The market environment remained challenging as low margins continued to impact our DCP Midstream, NGL trading and Refining businesses," said Garland. "However, our fee-based Midstream business performed well, and we continue to see good demand in Chemicals. Although demand for refined products is up relative to last year, the weighted average market crack was more than $5 per barrel from where it was a year ago and crude differentials remained tight. We remain focused on executing our strategy in those areas under our control. Our growth projects are all progressing well, and we continue to see great value and opportunity long term."[279]

[edit] July 28, 2016: ConocoPhillips Losses Increase as Oil Prices Stay Low

FuelFix reported on July 28, 2016 that ConocoPhillips reported that its second quarter losses increased six times from the same period a year ago, widening from $179 million to $1.1 billion, or 86 cents per share. The results brought ConocoPhillips’ six-month losses to $2.5 billion or $2 per share; Last year, over the same period, the company had earned $93 million, or 7 cents per share. “The price environment remains challenging, but our business is running well and we continue to beat our production, capital expenditures and operating cost targets,” chief executive Ryan Lance said in a statement adding that ConocoPhillips will be “very, very cautious through 2016. “It’s going to be well into 2017 before we see real changes in price."[280]

[edit] July 29, 2016: Debottlenecking and Yield Improvement Projects Near Completion at Wood River Refinery

Phillips announced during their earnings release on July 29, 2016 that Wood River Refinery has debottlenecking and yield improvement projects that are scheduled for completion in the third quarter. [281] Greg Garland told analysts during the 2016 second quarter earnings conference call on July 29, 2016 that "at the Wood River Refinery, we're undergoing debottlenecking and are on schedule for completion in the third quarter. At the Billings Refinery, efforts are underway to increase the amount of heavy Canadian crude we can run to 100%. At Bayway, work on the FCC modernization is progressing. These are all high return, quick payout projects."[282]

[edit] July 29, 2016: Billings Refinery Is Increasing its Heavy Canadian Crude Run Ability to 100 percent

Phillips announced during their earnings release on July 29, 2016 that the Billings Refinery is increasing its heavy Canadian crude run ability to 100 percent. This project is expected to be complete in the first half of 2017.[283] Greg Garland told analysts during the 2016 second quarter earnings conference call on July 29, 2016 that at the Billings Refinery, efforts are underway to increase the amount of heavy Canadian crude we can run to 100%. At Bayway, work on the FCC modernization is progressing. These are all high return, quick payout projects."[284]

[edit] July 29, 2016: Bayway Refinery is Undergoing an FCC Modernization to Increase Gasoline Yield

Phillips announced during their earnings release on July 29, 2016 that the Bayway Refinery is undergoing an FCC modernization to increase gasoline yield, expected in 2018.[285] Greg Garland told analysts during the 2016 second quarter earnings conference call on July 29, 2016 that "At Bayway, work on the FCC modernization is progressing. These are all high return, quick payout projects."[286]

[edit] July 29, 2016: Phillips is Still in the Process of Selling the Whitegate Refinery

Greg Garland told analysts during the 2016 second quarter earnings conference call on July 29, 2016 that "we're still in the process on Whitegate, I would tell you we're pleased with the progress to this point. And hopefully, as I said, I think on last quarter, our intention is we get this closed this year."[287]

[edit] July 29, 2016: After the Whitegate Sale, Phillips Doesn't Plan to Sell Any Other Refineries in 2016

Greg Garland told analysts during the 2016 second quarter earnings conference call on July 29, 2016 that "as we come to the end of the Whitegate process, I don't think there is a lot more in portfolio that we have on deck, certainly for 2016 or thinking about it into 2017."[288]

In answer to a question from Neil Mehta, Kevin Mitchell told analysts during Phillips 66's 2016 first quarter earnings conference call on April 29, 2016 that although Phillips has talked about divestiture of its California refineries in the past at this point Phillips will just hold on to them at this point in time. "California we talked about a lot the hold cost or the option value is really not much there is not a lot of capital in front of us in California last few year margins have been very good in California so it's a net cash contributor," said Mitchell. "And you think about could you sell asset probably but could we did good value for it, probably not and so I think we just hold it at this point in time they're good assets, they're probably mid back in terms of where they set their cost structure, but given the option value to keep, I think it'll just hang on."[289]

[edit] July 29, 2016: Freeport LPG Export Terminal is Nearing Completion

Phillips announced during their earnings release on July 29, 2016 that in Midstream, the Freeport LPG Export Terminal is nearing completion. The project is on budget with startup expected by year-end.[290]

[edit] July 29, 2016: Phillips 66 Continues to Invest in its Beaumont Terminal

Phillips announced during their earnings release on July 29, 2016 that Phillips 66 continues to invest in its Beaumont Terminal, the largest terminal in the company's portfolio. The terminal has 3.2 million barrels of new storage capacity under construction; 2 million barrels of additional crude storage are expected to be in service by year-end and 1.2 million barrels of additional product storage are expected to be in operation by mid-2017.[291]

[edit] July 29, 2016: The Sweeny Hub is Nearing Completion

Greg Garland told analysts during the 2016 second quarter earnings conference call on July 29, 2016 that "in the Gulf, development of the first phase of the Sweeny hub is nearing completion. Sweeny Fractionator One is operating well, however, volume mix across all of our fractionators remains impacted by heavier NGL feedstock as a result of continued ethane rejection."[292]

Greg Garland told analysts during the 2016 second quarter earnings conference call on July 29, 2016 that Phillips still thinks that that the Sweeny Hub is a great project and sees value creation opportunity there.

"If you think about NGL pipes coming out of the Permian and West Texas and the Eagle Ford and going by Sweeny. You think about world-class refining, world-class petrochemicals. We have the largest single site ethylene facility at Sweeny, we're building 1.2 million tons of polyethylene capacity, building the fractionator, we're building the caverns, we're building the interconnecting pipes to Bellevue and on to Freeport and then the 150,000 barrel a day LPG Export facility. So, we still like that concept and what we are creating there. I think short-term what you're seeing in the market, there's going to be stress in the LPG side of it. The frac is running well, it's running to design limits. We're seeing certainly heavier feed than what we premised. And so, we're running about 80 a day at the frac today versus 100%, but it's completely loaded in the backend of the frac. The other thing I would say is, as this project is coming up, we have a lot of project expenses that are hitting us beyond just the frac. So, think about the pipes and the caverns and the commissioning and the start-up of the LPG Export facility. So you should expect to see those costs continue through the end of 2016. But when you talk about the frac itself, we dropped it, all of it, it's at PSXP today. The EBITDA is about $100 million, so $25 million a quarter. There's a little bit of leakage that goes to the non-controlling interest, so then you take that and bring it to the net income level. And that was more than offset by the project expenses we had and the seasonal trading activities that we had in our NGL business. We're not worried about this whole NGL complex that we're building at Sweeny in terms of it coming up. And we're looking forward to getting the LPG Export up later this year, we'll start commissioning activities actually in the next couple weeks as we start thinking about that. So, I just want to say that we still really like this project a lot. And Tim, if you want to fill in anything I missed, you're welcome to do that."[293]

[edit] July 29, 2016: The Cracker Project at Sweeny and Baytown Looks to Be Complete in the Second Half of 2017

Greg Garland told analysts during the 2016 second quarter earnings conference call on July 29, 2016 that "there's two pieces of the cracker project. One is the derivatives project, the polyethylene plants at Sweeny and the second is the cracker at Baytown, which is just east of Houston. So, the derivatives plant, those projects are still online, they come online actually before the second half of 2017 to be complete, the cracker is now looking like it's going to complete in the second half of 2017. And that's really the change that we're seeing, primarily related to productivity and the complexity of that project we're seeing several month's delay. So, continue to progress on both of those very well, but the cracker is behind where we're seeing the derivatives project at this point."[294]

[edit] July 29, 2016: The LPG Terminal at the Freeport Export Facility is 97% Complete

Timothy Taylor told analysts during the 2016 second quarter earnings conference call on July 29, 2016 thatthe LPG Terminal at the Freeport Export Facility is about 97% complete. "There's different pieces, so we're actually right at the front end of our commissioning and drying out process, getting it ready. So, we anticipate that will be operational toward the end of the year, but we are actually essentially completing construction and now working into the commissioning piece of that business, so that's about to become operational. On the market side, and you asked about the contracts. We continue to work the contracts, as Greg said, the commodity environment is challenged today. So, I think that the commercial arm or opportunity is narrower than what we had originally planned in the short term, but we still fundamentally see that strength. And as I said, it's got to clear the market here somewhere to really make everything balanced just based on the demand side. So, we feel pretty good about the longer-term fundamentals there with some stress short-term I think on the commercial side of that. But the load across that looks really solid to us. And we continue to work that.[295]

[edit] July 28, 2016: Chevron Phillips Dedicates New Polyethylene Pilot Plant In Bartlesville

Chevron Phillips Dedicates New Polyethylene pilot plant In Bartlesville. The new pilot plant took a little more than a year to build and is composed of 20 different modules that cover approximately 11,700 square feet. The new construction in Bartlesville replaces the decades-old pilot plant that had been the focal point of polyethylene research for decades. The old plant, located across the street from the new one, is now closed. Research projects are expected to start in the new plant by the end of the year.Photo: James Gibbard Tulsa World

NewsOK reported on July 28, 2016 that Chevron Phillips Chemical, a 50-50 joint venture between Chevron and Phillips 66, officially dedicated a new Marlex polyethylene pilot plant at Bartlesville’s research and technology facility beginning the next phase for the company’s catalyst and polymer development operations. President/CEO Peter Cella said the pilot plant will allow for the research, testing and development of polyethylene processes, prior to implementation in full-scale operations. The new Bartlesville facility replaces a decades-old pilot plant that has been on the forefront of polyethylene research and development. Chevron Phillips Chemical employs just over 200 people at the facility in west Bartlesville.

Two Phillips 66 chemists, J. Paul Hogan and Robert L. Banks, discovered polypropylene in 1951 and their discovery led the way for commercially-viable plastic products such as milk jugs, containers and pipeline. “How perfect it is that our new pilot plant is right here in Bartlesville, Okla.,” Cella said. “This is the site were modern plastics got its start; this is the birthplace of modern plastics.” Skye Richey says the new plant is designed to be smarter, more user-friendly, environmentally responsible and safer for for the workers who will run it. Chevron Phillips Chemical officials did not release the cost to build the new pilot plant in Bartlesville, only to say the investment was significant.[296]

The new pilot plant took a little more than a year to build and is composed of 20 different modules that cover approximately 11,700 square feet. Cella said that the company is not releasing the new pilot plant’s price tag but described the investment as “significant.” Cella said that some jobs were created to construct the new plant but no additional hires were made at the research and technology facility. Cella said that the investment in the new pilot plant preserves those jobs. The new construction in Bartlesville replaces the decades-old pilot plant that had been the focal point of polyethylene research for decades. The old plant, located across the street from the new one, is now closed. Research projects are expected to start in the new plant by the end of the year.[297]

[edit] July 22, 2016: Phillips' Santa Maria Rail Spur Project May Be in Jeopardy

The San Luis Obispo Tribune reported on July 22, 2016 that Phillips 66 has been given an August 15 deadline to give the San Luis Obispo County department of planning and building additional information about the Santa Maria Rail Spur Project and to pay more than $240,000 in fees or the project application will be withdrawn. County policy requires that development applicants pay all the county’s costs in processing their permit, including the cost to hire consultants and write an environmental impact report. The county has estimated the cost of processing the application through the Board of Supervisors appeal hearing to be $240,697.73. In a July 8 letter to the company, county supervising planner Ryan Hostetter wrote, “This letter serves to inform Phillips 66 that without the necessary information and funding, the county cannot complete processing the application as directed by the Planning Commission.” As of July 22, the county had received only part of the information it has requested and none of the money, Hostetter said. Phillips 66 did not respond directly to questions by The Tribune on Friday as to whether the company plans to meet the county’s Aug. 15 deadline to pay the fees and provide the missing information. Instead, it sent this statement: “Phillips 66 presented a strong proposal, and we remain confident about the project,” the statement said. “We understand and respect the review and approval process with the county, and look forward to the next step in the EIR process.”

Phillips 66 also faces questions regarding their recent decision to truck oil directly into the refinery which according to the county is likely a violation of the county’s permit and will require a new permit as well as a trucking plan detailing the new oil-by-truck method. “Bringing in crude by truck is a modification of the refinery and, additionally, may have the potential to cause significant impacts,” Hostetter said in a June 30 letter to Phillips 66. The refinery’s maintenance supervisor, James Anderson, responded to the county in a letter dated July 14 in which he denied the assertions that the trucking of oil is a modification of the refinery and disputes the notion that a trucking plan is required. The letter refers to the refinery’s official name, the Santa Maria Refinery. “Phillips 66 does not need any new permits or modifications to its existing permits to deliver feedstocks by rail to SMR (Santa Maria Refinery) in the manner in which it is currently performed,” Anderson’s letter stated. “Such activity has been a long-standing practice, albeit intermittent, and is not part of the rail extension project.”[298]

[edit] July 21, 2016: ConocoPhillips to Lay Off Another 1,000 Employees

FuelFix reported on July 21, 2016 that ConocoPhillips plans for lay off another 1,000 employees, about 6 percent of its global workforce, in its latest effort to cut costs as crude prices languish around $45 a barrel. The oil explorer has finished assembling some major upstream projects, and now has “more organizational capacity than we need,” ConocoPhillips spokesman Daren Beaudo said in an emailed statement. Its operations in North America will get hit hardest. “We have taken several steps as a company to adapt to lower and more volatile prices and strengthen our position coming out of the downturn,” Beaudo said.[299]

[edit] July 14, 2016: A Catastrophic Oil Train Derailment in Oregon Raises Californian's Fears of Phillips 66's Santa Maria Rail Spur Project

Phillips 66 Santa Maria Refiney project protest in San Luis Obispo, July 11, 2015. More than 150 activists gathered for a rally at Mitchell Park in downtown San Luis Obispo to protest a proposed Phillips 66 rail spur that would add five tracks and allow crude oil to be hauled to their Santa Maria Refinery. The rally commemorated the three-year anniversary of a derailment near Lac-Mégantic, Quebec where a stopped train hauling 72 crude oil tank cars rolled downhill and derailed near the center of town. Forty-seven people were killed in ensuing explosions and fires. Flickr Creative Commons "Phillips 66 Santa Maria Refiney project protest, July 11, 2015" Photo: Stand.Earth Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Robin Abcarian reported a major story in the Los Angeles Times on July 14, 2016 titled "A catastrophic oil train derailment in Oregon raises fears on Central Coast" about Alene Burns, mayor of Mosier, Oregon, who spoke to activists in San Luis Obispo about what happened when a mile-long train loaded with crude oil derailed in Mosier in June 16, 2016.

Sixteen of 96 cars toppled from the tracks. Four exploded. The area, a windsurfing mecca known for its constant high winds, was spared more explosions only because the air was unusually still that day. “If it had been a normal, windy day,” Burns said, “the explosions would have had a domino effect.” Still, a monstrous plume of black smoke could be seen for miles. About 200 yards away, 225 schoolchildren were evacuated and began their summer vacation a week early. Their school was quickly converted to an incident command center. Twenty-three miles of I-84, which runs along the southern edge of the Columbia River, was closed, blocking access to Mosier. “Guess who couldn’t help us?” Burns said. “The first responders. They were stuck in gridlock traffic.” The Mosier fire burned for 15 hours. No one was hurt, but the town’s sewage treatment plant was inundated with 10,000 of the 42,000 gallons of spilled Bakken crude oil — a volatile, highly flammable mix. For days, toilets didn’t flush and showers didn’t work.

According to Abcarian, supervisors in counties up and down the state have officially opposed Phillips 66's Rail Spur Project to the Santa Maria Refinery. So have at least 22 city councils, from Berkeley to Los Angeles. The crude oil boom in places like North Dakota has lead to a significant increase in the number of such trains, along with a significant increase in derailments. Most people don’t want potentially explosive cargo barreling through their community. "As long as we depend so heavily on oil, we will have these battles. It makes economic sense for oil companies like Phillips to fight on," writes Abcarian. "But I take what Mayor Burns said to heart. Oil trains will derail. They are disasters waiting to happen. San Luis Obispo County supervisors are in a unique position to help protect every Californian who lives within a mile of Union Pacific’s tracks, often called “the blast zone.”"[300]

[edit] July 14, 2016: Greg Garland Says Recruiting and Retaining Millennials Was a Significant Motivator for Phillips 66's New Campus in Houston

New Phillips 66 Headquarters in Houston. Phillips 66 will move all 2,200 of its Houston-area employees into its new global headquarters in Westchase in July. The project is on 14 acres in the West chase District and will encompass 1.1 million square feet of space in multiple buildings. Plans include a parking garage, cafeteria, fitness center, coffee shop and conference center. The project will also have a running track on the roof of a garage, a soccer field and multiple dining options. Photo Credit: Houston Chronicle

Houston Business Journals reported on July 14, 2016 that one example of an energy company that has spruced up its workspace is Houston-based Phillips 66 which just unveiled its new global headquarters. The company's CEO, Greg Garland, said that recruiting and retaining Millennials was a significant motivator for the new campus. The headquarters has a yoga studio, massage parlor, putting green, spinning studio, basketball court, and a soccer field with a track. It also has a physician through Memorial Hermann Health System, as well as two credit unions with campus outposts – Houston-based Member's Choice Credit Union and Oklahoma-based Truity Credit Union. Employees can de-stress in a massage parlor, or get their suits and skirts pressed in an on-site Men's Wearhouse dry cleaner. In addition, the new headquarters contains a learning center that can seat 750 employees, a cafeteria with eight different food stations, coffee shop, convenience store, credit unions, and conference center — more or less forming a self-contained city. One of the most interesting desires for the headquarters was a soccer field big enough for a five-person team. “They were limited in space, so they put it on top of the parking garage," said Dennis Laflen, senior vice president of HOK and the Phillips 66 project manager.

One main impetus for the design is Phillips desire to attract and retain talent - especially Millennials. "Thirty-six percent of our workforce are Millennials," Garland said. "(That number) is going to grow, and these are the kinds of facilities that attract Millennials and the kind of place they want to work at. … (It’s) part of just being competitive in this market."

Phillips also has an in-house dentist at its present headquarters who will be moving to Philips 66's new building in the Westchase District. “It opened in mid-February and they have already seen 211 patient at the Phillips 66 Dental Office,” said Charles Lusk, CEO of Onsite Solutions in 2014. “It’s the wave of the future. Some groups offer mobile clinics that set up in the parking lot, but who would want to use that?" Having a dental office on site for employees and their families to use is convenient for staff and lucrative for employers. “The reality of the matter is an employee can spend four hours of his or her day for one dental appointment, when you factor in drive-time. It’s not conducive to a good work day,” said Lusk. “By having an office on site, you’re increasing productivity as well as the likelihood that someone will even go to the dentist, which makes for a healthier person.” “Some corporations are just more innovative than others. They are doing it because they know their competitors are going to do it,” Lusk said. “Phillips 66 is very forward-thinking and wanted to get up in front of the trend.”

The new Phillips 66 campus was designed by St. Louis-based HOK. Because HOK had worked with ConocoPhillips in 2009, before the spinoff, on a project in Colorado, Phillips 66 executives were familiar with its work and hired HOK for the headquarters. Design work began in 2012. “It’s been a long history with the original ConocoPhillips, and we’ve continued to work with both companies,” said Dennis Laflen, senior vice president of HOK and the Phillips 66 project manager. “From very beginning, the CEO gave clear directions. Create a campus large enough to bring people together for the first time in history.” About 80 to 85 employees from six different HOK offices collaborated on the project that finished this year, and Phillips 66 workers started to move in at 2331 City West Blvd. this month. Laflen could not disclose project costs, but a 2014 report from the Economic Development and Tourism Division of the Governor’s Office of Texas stated it was worth $71 million total.[301][302][303][304]

[edit] July 9, 2016: Activists Rally Against Phillips 66's Santa Maria Rail Spur Proposal

The San Luis Obispo Tribune reported on July 9, 2016 that more than 150 activists gathered for a rally at Mitchell Park in downtown San Luis Obispo to protest a proposed Phillips 66 rail spur that would add five tracks and allow crude oil to be hauled to their Santa Maria Refinery. The rally commemorated the three-year anniversary of a derailment near Lac-Mégantic, Quebec where a stopped train hauling 72 crude oil tank cars rolled downhill and derailed near the center of town. Forty-seven people were killed in ensuing explosions and fires.

Mayor Arlene Burns of Mosier, Oregon, spoke at the rally about a fiery oil train derailment near her town in June and urged San Luis Obispo County residents to stop the spur project. Attendees then marched to the nearby Amtrak station, many waving yellow “Stop Oil Trains Now” signs. The June 3 incident in the Columbia River Gorge near Mosier was caused by broken track bolts that derailed a train hauling more than 90 tank cars of crude oil. Some of the cars leaked oil and caught on fire, prompting Mosier, a tiny town of about 430, to evacuate its schools and many residents. “Trains derail,” said Burns. “It’s not a matter of if, it’s a matter of when.”[305]

[edit] July 9, 2016: DCP Midstream Shuts Tulsa Office Affecting 100 Employees

The Tulsa world reported on July 9, 2016 that DCP Midstream LLC, a 50-50 joint venture between Phillips 66 and Spectra, has closed its Tulsa office affecting about 100 employees. Jerry Barnhill, a senior vice president for the midstream company, said the closure was the result of a decision to consolidate the functions being performed in Tulsa — primarily finance and accounting operations — with DCP’s Denver headquarters.[306]

DCP Midstream previously eliminated 300 positions nationwide in April, 2016 leaving about 2,900 employees overall. DCP Chairman and CEO Wouter van Kempen said the joint venture reduced its 2016 capital budget down to $250 million. In comparison, Phillips 66’s contribution alone to DCP’s capital budget last year was $550 million. “This is a challenging environment that we are managing through and we continue to execute on our strategy to reset our break-even cost to ensure we are the most reliable, safe, low-cost midstream services provider sustainable in any environment."[307]

[edit] July 8, 2016: Opponents of Phillips 66 Santa Maria Rail Spur to Stage Protest Rally in San Luis Obispo

The Santa Maria Times reported on July 8, 2016 that opponents of Phillips 66's plan to bring oil trains to Santa Maria Refinery will gather for a "Stop the Oil Trains Rally" on July 9, 2016 at Mitchell Park in downtown San Luis Obispo. Guest speakers at the rally will include Arlene Burns, mayor of Mosier, Oregon, who will talk about her experiences being a part of a blast zone after a Union Pacific Railroad train, towing cars filled with crude oil, derailed and exploded near her community early last month, according to organizers. Fourteen cars were involved in the June 4 Columbia River Gorge accident, causing the evacuation of schools in Mosier and the shutdown of Interstate 84 between Hood River and The Dalles. Organizers plan to lead a peaceful march at 1:15 p.m. from the park to the nearby Amtrak station, where additional speakers will address the crowd.[308]

[edit] July 7, 2016: H.J. Reed Speaks to Ponca City ConocoPhillips Retiree Association

The Ponca City News reported on July 7, 2016 that H.J. Reed, Manager of State Government Affairs for Phillips 66, would be the keynote speaker at the summer general meeting of the ConocoPhillips Retiree Association on July 11, 2016 at the Pioneer Technology Center. Reed will talk about key issues in the November elections and share the latest analysis regarding likely key issues and outcomes. He will speak about the 2016 Oklahoma legislative session and what the 2017 session will likely bring. Reed previously spoke to the Ponca City Chamber of Commerce's Ponca Politics on July 24, 2015.[309]

The Ponca City News reported on July 13, 2016 that H.J. Reed, spoke to the ConocoPhillips Retirees on July 11, 2016, about several scenarios for the outcome of the presidential elections, state question 779, commonly referred to as the David Boren education question, which calls for a one cent state sales tax to give teachers a raise, and what would happen at the state level if Gov. Mary Fallin should be Trump’s vice presidential pick. Reed predicted that the Republican convention will not be contested. On the local level Reed mentioned Rep. Steve Vaughan, Rep. John Pfieffer and Sen. Eddie Fields.

Ponca City Area Chamber of Commerce representatives Chairman Molly Kyler, and Sue Lunsford, Chamber volunteer, also spoke to the ConocoPhillips Retirees Association in an effort to recruit memberships to the Chamber. Dianne Anderson told about the United Way program and the recent United Way golf tournament sponsored by Phillips, which brings in the companies that have contracts with the company and this makes about $50,000 a year for United Way.[310]

[edit] July 7, 2016: Margins Tank for US Refiners This Summer, Especially on the East Coast

The Oil Tanker Maersk Catherine sailing through New York Harbor with One WTC in the background. The gasoline glut is so extreme on the East Coast that several tankers full of products were forced to sit idle in New York Harbor recently, waiting to unload. Phillips 66 has one East Coast refinery at Bayway, New Jersey. Maersk Catherine Photo by: MassMatt Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic

Reuters reported on July 7, 2016 that over the last 30 days, estimates for second-quarter earnings have fallen 17 to 20 percent for four of the major U.S. refiners including Phillips 66 as gasoline and diesel inventories stubbornly sit well above five-year averages driving down refiner margins. The U.S. gasoline crack spread 1RBc1-CLc1, a proxy for refiner margins, has dropped 34 percent in two weeks. On July 6, 2016, it hit a five-year low for this time of year of $13.10 a barrel. That is less than half the crack spread of $28 a barrel at this time last year. "An RBOB crack trading 13 bucks in the middle of driving season is unheard of," said one trader.

The situation is especially dire for U.S. East Coast refineries (PADD 1) where refiners have been cutting production. The glut is so extreme that several tankers full of products were forced to sit idle in New York Harbor recently, waiting to unload. Phillips 66 has one East Coast refinery at Bayway, New Jersey. “PADD 1 is a holy mess,” said Andrew Lebow, senior partner at Commodity Research Group in Darien, Connecticut. “It is very unusual. If a market becomes extremely oversupplied, like PADD 1, they are going to have to cut runs.”

According to Reuters, inventories have grown despite evidence that U.S. motor travel continues to surge. Analysts noted that U.S. refiners switched to maximum gasoline mode earlier than usual during a fleeting moment of high margins in the early part of 2016. Imports also have been higher than normal in recent weeks, adding to the glut. John Auers, executive vice president at Turner, Mason & Co, a Dallas-based consultancy, said he remains bullish on gasoline demand and refining margins this summer, noting that gasoline and diesel inventories can draw down just as fast they fill up. “I think we will see some significant drawdowns in July and August, and that will help margins,” Auers said. “I think $50 a barrel for crude oil will be the high water mark, so gas prices will remain low and we will have a record driving season this summer."[311]

[edit] June 29, 2016: Boilermaker Sues Phillips 66 for Negligence at Wood River Refinery

The Madison Record reported on June 29, 2016 that James Mason filed a lawsuit June 22 in Madison County Circuit Court against Phillips 66 Company, ConocoPhillips WRB Partner LLC, Phillips 66 WRB Partners Holdings, Cenovus Energy US LLC and WRB Refining LLC, doing business as Conoco Phillips Wood River Refinery, alleging negligence in failing to provide a safe place to work. According to the complaint, on June 23, 2014, while in the course of working as a boilermaker at Conoco Phillips Wood River Refinery, Mason touched a wooden pole on which certain electrical equipment existed, causing him to be electrocuted and suffer serious injuries. The plaintiff alleges the defendants failed to keep the area in safe and proper condition to prevent electric shock, failed to repair electric equipment near the wooden pole and failed to ground the wooden pole to prevent shock.[312]

[edit] June 25, 2016: Lake Charles Refinery Celebrates 75 Years of Operation

The Lake Charles Refinery, located in Westlake, La. Lake Charles Refinery Photo by: Cory O'Quinn Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic

American Press reported on June 25, 2016 that Phillips 66's Lake Charles Refinery recently celebrated its 75th anniversary in a ceremony that lauded employees, contractors and community stakeholders. The refinery officially began operating in 1941 as the Continental Oil Co to supply jet fuel during World War II. The $4.5 million project was run by 100 employees and had a crude oil capacity of 7,500 barrels per day. Between 1960 and 2002, the company changed its name to Conoco, was acquired by DuPont, became its own company again, and merged to form ConocoPhillips. In 2012, the company split and Phillips 66 began operating as its own refining and marketing business. Today, the refinery has a crude oil output of 249,000 barrels per day and 770 employees. “The names may have changed over the years, but our plans to operate safely with honor and commitment remain,” said Refinery Manager Rich Harbinson.

“ConocoPhillips has been a good neighbor to the city of Westlake, no doubt. They’re always giving,” said Westlake Mayor Bob Hardy worked at the refinery for years before going into local politics. Sowela Technical Community College Chancellor Neil Aspinwall said the company has invested heavily in Sowela by providing internships for students, equipment for Sowela structural programs, and over $2 million toward the construction of a 12,000-square-foot process technology building. “Phillips 66 is a great example of what we can accomplish when industry takes a role in the educational process and the preparation of the workforce,” Aspinwall said.[313]

According to Ponca City resident Hugh Pickens, in the 1960s the Lake Charles Refinery was known as the sister refinery to Conoco's Ponca City Refinery. "It was very common for employees in Ponca City to be transferred to Lake Charles and vice versa." Pickens noted that the Ponca Refinery will be celebrating an anniversary of its own in just two years. "In 2018 the Ponca Refinery, originally called the Marland Refinery, will be celebrating one hundred years of operation."

[edit] June 22, 2016: California Refineries Brace for Potential Disruptions Ahead of Possible Blackouts This Summer

Phillips 66's Santa Maria Refinery near Arroyo Grande, California. Refiners in southern California are bracing for potential disruptions ahead of possible blackouts this summer after the closure of a key natural gas field prompted state regulators to warn of power and gas shortages. Phillips 66 has two refineries that could potentially be affected: the Santa Maria Refinery and the Rodeo Refinery. The Santa Maria facility is located in Arroyo Grande, Calif., while the Rodeo facility is in the San Francisco Bay Area. Photo by 350.org Flicker Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Reuters reported on June 22, 2016 that refiners in southern California are bracing for potential disruptions ahead of possible blackouts this summer after the closure of a key natural gas field prompted state regulators to warn of power and gas shortages. Phillips 66 has two refineries that could potentially be affected: the Santa Maria Refinery and the Rodeo Refinery. The Santa Maria facility is located in Arroyo Grande, Calif., while the Rodeo facility is in the San Francisco Bay Area. The combined Phillips refineries have a total crude oil processing capacity of 120,000 bpd. According to Reuters concerns about disruptions to refining operations have intensified as a heat wave swept the region, testing power grids that rely heavily on natural gas for fuel. Power generators face strained gas supplies after operations stopped at SoCalGas' Aliso Canyon facility, the second largest natural gas field in the Western United States. The six major refineries operating in the region require immense amounts of natural gas and electricity delivered on a consistent basis to run smoothly.

Any stoppages at the refineries would likely cause gasoline prices to rise in California, which is largest and most expensive gasoline market in the continental United States. In the event of even a brief power outage, a refinery would need between five to seven days to return to full production, assuming there is no damage, according to industry players. "Our facilities are designed to run at a steady-state - not ramp up and down sporadically. The notion of 'turning down' a facility does not take into account the physical nature of the refining process," the Western States Petroleum Association (WSPA) said in a statement.[314]

[edit] June 20, 2016: Phillips 66 Gives $100,000 to University of Arkansas

University of Arkansas reported on June 20, 2016 that Phillips 66 has presented the university with a $100,000 check in support of various initiatives in the Walton College and the College of Engineering, including the Technology Awareness Program, Supply Chain Management Research Center, the Engineering Career Awareness Program and the SAP Support Program. During their visit to campus, the Phillips 66 team met with faculty and staff from the College of Engineering to discuss the possibility of increasing the number of engineers hired from the university. “We recognize that the partnerships we have at schools like the University of Arkansas are critical to Phillips 66,” said Pam McGinnis, chief procurement officer for Phillips 66 and an alumna of the College of Engineering. “Our university partners are helping us build the depth and breadth of capabilities our company needs to provide energy and improve lives now, and in the future. And they’re instilling a passion for excellence in our future workforce.”[315]

[edit] June 19, 2016: Lewis & Clark Community College has a Two-Year Associate’s Degree Program in “Process Operations” to Train People for the Phillips 66 Refinery in Wood River

Lewis & Clark Community College has a Two-Year Associate’s Degree Program in Process Operations. Newly hired refinery workers can earn $75,000 a year many students land refinery jobs before they graduate, and finish the program part-time. “They are in demand right now,” Scheffel said. Tuition for all two years runs about $8,200 for Metro East residents, plus books. Photo: Lewis & Clark Community College

The St. Louis Post-Dispatch reported on June 19, 2016 that Lewis & Clark Community College has a two-year associate’s degree program in “process operations” to train people for the Phillips 66 refinery in Wood River. “We have a miniature refinery on our Edwardsville campus,” says Kent Scheffel, vice president of enrollment services at Lewis & Clark. Newly hired refinery workers can earn $75,000 a year and many students land refinery jobs before they graduate and finish the program part-time. “They are in demand right now,” Scheffel said. Tuition for all two years runs about $8,200 for Metro East residents, plus books.[316]

Lewis & Clark Community College’s process operations technology program was developed in collaboration with ConocoPhillips in Wood River, Ill., and in consultation with the Center for the Advancement of Process Technology in the Gulf Coast region and the Sigma Aldrich partnership, which resulted in a professional and focused plan of study. Completion of the program provides a high probability of placement as a process operations technician within the process industry. Process technicians learn how to operate furnaces, distillation columns, reboilers, heat exchangers, steam systems, and cooling-water systems — the essential elements of all process industries. With degree credentials and supervised on-site internship experience in hand, students qualify for a career in the nationally critical field of petroleum refining, oil and gas production, petrochemicals production, biochemicals production, base chemicals production and power generation. Employment opportunities as a process operations technician will be expansive — within the region and across the nation.[317]

Lewis and Clark’s Process Operations Technology program is one of only 18 nationally accredited “endorsed colleges” through the North American Process Technology Alliance (NAPTA). “We went from a regional accreditation to a national one, and have hit the highest tier of accreditation as an endorsed college, which is powerful recognition of the work we’ve done developing the program, as well as what our students have accomplished,” said Mike Morgan, coordinator and instructor in Process Operations Technology at Lewis and Clark Community College. “We are also the first college, of only 18 endorsed schools across the country, located in the Midwest.” Also known as “specialized” or “professional accreditations,” these credentials ensure that specific vocational programs are meeting national quality standards. The 18 endorsed schools, now including Lewis and Clark, each have an active advisory committee, have completed a comprehensive program audit and have been approved for endorsement by the NAPTA, an active partner with CAPT. “As our first member from another alliance, (Lewis and Clark is) setting an example for other schools to follow, and further strengthening our efforts to build consistency and sustainability for PTEC across North America,” said NAPTA President W. Eric Newby.

Process Operations Technology graduates go on to earn approximately $20 to $35 per hour. Lewis and Clark graduates have gone on to work for companies like Abengoa AG, Afton Chemical, Ameren UE, Calumet Petroleum, Center Ethanol, Covidien, Elementis, Eastman Chemicals, Explorer Pipeline, GS Robbins, Jost Chemical, Kinder-Morgan, Marathon Pipeline, Marathon Refining, Metropolitan Sewer District, Prairie State Energy, Phillips 66 Refining, Proctor & Gamble, Shell Off-shore, Sigma-Aldrich, Solvay Flourides and SunCoke. “It’s definitely an exciting time for Process Operations Technology, which continues to grow,” Morgan said. “As the need for industry grows, and with companies looking to replace anywhere from 30-50 percent of their workforce over the next five years, there are numerous opportunities available for employment in refineries, chemical plants, water treatment facilities and more.”[318]

[edit] June 14, 2016: American Gods TV Series Is Filming in Ponca City

American Gods TV Series is Filming in Ponca City. American Gods is an upcoming television series created by Bryan Fuller and Michael Green for Starz, based on the novel of the same name by author Neil Gaiman.

The Ponca City News reported on June 14, 2016 that the a crew from the Starz! Network is in Ponca City filming a few scenes from “American Gods,” a Hugo and Nebula Award-winning novel by Neil Gaiman. The crew has been filming on Grand Avenue and on South 1st Street.[319] Members of Ponca Playhouse who gathered at the Black Box Theatre saw the film crew on the corner of South 1st and Oklahoma Street as they exited from the annual Riga-Tony Awards the evening of June 14, 2016.

American Gods is an upcoming television series created by Bryan Fuller and Michael Green for Starz, based on the novel of the same name by author Neil Gaiman. Fuller and Green will script the first episode and serve as showrunners. Gaiman will executive produce along with Fuller, Green, Craig Cegielski, Stefanie Berk and Thom Beers. The series will focus on the mysterious Shadow, a man who is released from prison a few days early after serving a three-year sentence for bank robbery when his beloved wife Laura is killed in a car accident. Flying home for the funeral, Shadow is seated next to a man who introduces himself only as Mr. Wednesday, and this man knows more about Shadow's life, both past and present, than is possible. Shadow comes to learn that Wednesday is, in fact, the god Odin of Norse mythology and that all of the gods that mankind has ever believed in are alive in human form and live among regular people. Shadow is soon thrust into a gathering conflict between the Old gods and the so-called "New gods", the gods of money and technology who believe there is no longer room on Earth for the old gods.

On January 28, 2016, Ricky Whittle was cast as the lead character, Shadow Moon. On March 2, 2016, it was announced that Ian McShane had been cast as Mr. Wednesday.It was later announced on March 17, 2016 that Emily Browning will play Laura Moon, Shadow's wife. On March 23, 2016 it was announced that Sean Harris, Yetide Badaki and Bruce Langley would play the respective roles of Mad Sweeney, Bilquis and Technical Boy. On April 14, 2016, Jonathan Tucker and Crispin Glover were cast as Low Key Lyesmith and Mr. World. On April 21, 2016, Cloris Leachman was cast as Zorya Vechernyaya, Peter Stormare as Czernobog, Chris Obi as Mr. Jaquel, and Mousa Kraish as the Jinn. Showrunner Bryan Fuller estimated in May 2015 that the show would likely air in "late 2016";however, it is now set to premiere in early 2017. The shooting was scheduled to begin on March 1, 2016 in Toronto and continue until September.[320]

[edit] June 11, 2016: Phillips 66 Donates $25,000 to Sweeny Petrochemical Academy

The Brazoport Facts reported on June 11, 2016 that Phillips 66 is making a $25,000 grant to the Sweeny Petrochemcial Academy locared in Sweeny, Texas, home of Phillips Sweeny Refinery and Petrochemical complex. “The petrochemical academy will ensure a trained workforce to staff the industrial expansion in Sweeny and Freeport as well as replacing employees electing to retire,” said Phillips 66 Spokeswoman Regina Slaydon. Phillips 66 has supported the Sweeny ISD petrochemical academy since its inception in 2014, Slaydon said, and contributing money to allow as many students as possible to attend furthers that partnership.[321]

[edit] June 10, 2016: Profit Margins Shrink for US Refiners like Phillips 66 because of Oversupply of Gasoline

Retuers reported on June 10, 2016 that an unusual glut of gasoline - just as refiners are ramping up to produce more - has caught them on the wrong side of distillate margins for the second time in less than 12 months. Instead of producing bigger profits for refining gasoline, refiners like Phillips 66 are seeing margins shrink because of oversupply, potentially leading to disappointing earnings. "Refiners killed the gasoline golden goose this year by overproducing. They were actually making summer gasoline during winter. That says it all," said Nevyn Nah, oil products analyst at Energy Aspects. Earnings per share at top U.S. refiners, including Phillips 66, Valero and Marathon Petroleum, are expected to fall well short of analysts' expectations in the second quarter, according to StarMine, a unit of Thomson Reuters.

The surprise strength in diesel has also caught refiners off-guard. Prices of distillates, which include heating oil and diesel, have seen an unusual surge in recent weeks due to robust overseas demand combined with lower domestic production. Typically, gasoline trades at a premium to diesel during the hot months of June, July and August. However gasoline's premium to diesel and heating oil fell is now only one cent, down from a peak of 29 cents in early April. "Gasoline is on the verge of trading under diesel... in JULY!!! That's insane," a trader at a U.S. bank said in an instant message.[322]

[edit] June 10, 2016: Phillips 66 to Help Fund $746 Million Superfund Cleanup of Portland Harbor

Environmental Leader reported on June 10, 2016 that the EPA will ask more than 150 companies and other groups to foot the $746 million bill to clean up the Portland Harbor Superfund Site. Of the 150 potentially responsible parties identified by the EPA, 10 have already agreed to help with the cleanup process including Phillips 66. The 10 companies, which call themselves the Lower Willamette Group, include Arkema, Bayer CropScience, BNSF Railway Company, Chevron, Phillips 66, Union Pacific Railway and the city of Portland. The Lower Willamette Group (LWG) is composed of the ten parties who signed agreements with EPA to conduct the remedial investigation and feasibility study of the Site and four other parties who have contributed financially to the project. Lower Willamette Group spokesperson Barbara Smith told Oregon Public Broadcasting that the group is happy to see a cleanup plan for the river.

The pollution at the superfund site stems from a variety of industries, including shipbuilding, wood treatment and lumber milling, storage of bulk fuels and manufactured gas production, chemical manufacturing and storage, municipal sewer overflows and industrial storm water. The EPA says that hazardous substances found at the site include polychlorinated biphenyls (PCBs), polycyclic aromatic hydrocarbons (PAHs), dioxins/furans, pesticides and heavy metals, which can harm people and the environment. At the end of this first seven years, the EPA says health risks from the site’s pollution will drop as much as 100 times below the current levels.[323]

[edit] June 6, 2016: Phillips 66 to Move Into New Houston Headquarters in July

New Phillips 66 Headquarters in Houston. Phillips 66 will move all 2,200 of its Houston-area employees into its new global headquarters in Westchase in July. The project is on 14 acres in the West chase District and will encompass 1.1 million square feet of space in multiple buildings. Plans include a parking garage, cafeteria, fitness center, coffee shop and conference center. The project will also have a running track on the roof of a garage, a soccer field and multiple dining options. Photo Credit: Houston Chronicle

Houston Business Journal reported on June 6, 2016 that after almost four years of construction, Phillips 66 will move all 2,200 of its Houston-area employees into its new global headquarters in Westchase in July. The company will move employees from four locations: The Pinnacle Building at 3010 Briarpark Drive, The Reserve Building at 3250 Briarpark Drive, One Briarlake Plaza at 2000 W. Sam Houston Parkway South and 600 North Dairy Ashford. The 14-acre campus is anchored by 13- and 15-story office towers connected via a 3,000-square-foot walking bridge and an eight-floor parking garage. [324]

The headquarters has a yoga studio, spinning studio, basketball court, and a soccer field with a track. It also has an on-site dentist and physician through Memorial Hermann Health System, as well as two credit unions with campus outposts – Houston-based Member's Choice Credit Union and Oklahoma-based Truity Credit Union. Employees can de-stress in a massage parlor, or get their suits and skirts pressed in an on-site Men's Wearhouse dry cleaner. "Thirty-six percent of our workforce are Millennials, and (that number) is going to grow, and these are the kinds of facilities that attract Millennials," Garland said when asked about the campus' amenities. "(It's) part of just being competitive in this market."[325]

[edit] June 6, 2016: Greg Garland Sells Almost $5 Million of Phillips Stock

The Bibey Post reported on June 6, 2016 that the Chairman and CEO of Phillips 66 and company’s insider Greg Garland sold 62,500 shares of Phillips stock at $80.0 of a share. The transaction’s shares had a value of around $4,996,881 U.S. Dollars. Garland now owns 122,930 shares of Phillips stock.[326]

[edit] June 3, 2016: Western States Petroleum Association Sues State of California Over Emission Standards at Rodeo Refinery

Courthouse News Service reported on June 3, 2016 that the Western States Petroleum Association, or WSPA, sued the Bay Area Air Quality Management District in Contra Costa Superior Court, claiming the agency acted arbitrarily when it installed new rules aimed at curtailing emissions at five Bay Area refineries by 20 percent. The refineries include Chevron in Richmond, Tesoro outside of Convord, Phillips 66 in Rodeo, Valero in Benicia and Shell in Martinez. WSPA — along with Valero Refining, Tesoro Refining & Marketing and Phillips 66 — say the district did not perform the necessary environmental review, known as a CEQA analysis, when it implemented the new rules. It further asserts the mandate unfairly targets the oil and gas industry as the emissions reduction was not implemented in any other industry. The plaintiffs want the court to order the Bay Area Air Quality Management District to set aside the rules aimed at curtailing emissions at the five locations, as well as an injunction that prohibits the agencies from implementing certain provisions in the future. WSPA says the five refineries that comprise the Contra Costa-Solano refinery belt — the largest in California — account for less than three percent of air pollutants in the area.[327]

[edit] June 1, 2016: Proposed Carbon Cap Plan Would Affect Phillips 66's Ferndale Refinery

The Bellingham Herald reported on June 1, 2016 that Washington state regulators have unveiled an updated plan to limit greenhouse gas emissions from large polluters, the latest attempt by Gov. Jay Inslee to push ahead with a binding cap on carbon emissions after struggling to win approval from legislators. The rule would initially apply to facilities that release at least 100,000 metric tons of carbon a year including Phillips 66's Ferndale Refinery. Under the proposed rule, expected to be finalized in late summer, large emitters would be required to reduce carbon emissions by about 5 percent every three years, and show they achieved an average reduction of 1.7 percent per year.

Kris Johnson, president of the Association of Washington Business, said his group is still concerned about the potential economic damage from this new regulation. “Placing a cap on carbon emissions that targets Washington’s best employers sends the wrong signal to businesses of all sizes, both those that are here already and those hoping to relocate here, by driving up energy costs for employers and families at a time when we are already beginning to see signs of an economic slowdown,” he said in a statement.

But some critics said the proposed rule doesn’t require enough emissions reductions and disregards current science. “We are extremely disappointed,” said Andrea Rodgers, an attorney representing young activists who sued the state to adopt new rules to limit carbon emissions based on the best-available science.[328]

[edit] May 31, 2016: Phillips Does Maintenance Work on FCCU at Borger Refinery

Nasdaq reported on May 31, 2016 that Phillips 66's Borger Refinery is undergoing two weeks of maintenance on equipment related to its gasoline-making uniy. "Unit 40 FCCU [fluid catalytic cracking unit] is scheduled to clean half of the blower surface condenser," it said in a filing with the Texas Commission on Environmental Quality. "Unit 40 FCCU will reduce charge to minimize the possibility of process upset." The FCCU isn't scheduled to shut down during the work, which is due to end June 13, but that it may lead to plant emissions.[329]

[edit] May 26, 2016: Phillips Reports Equipment Problems at Sweeny Refinery

Nasdaq reported on May 26, 2016 that Phillips 66 reported problems with equipment and emissions at its Sweeny refinery in Texas. "The wastewater plant regenerative thermal oxidizer (RTO) went into standby mode, and the bioreactor tank, Tank 69, vented," it said. "This RTO standby mode is a continuation of operational issues resulting from the May 21, 2016 power failure." Phillips said the emissions began May 24, 2016 and ended May 25, 2016.[330]

[edit] May 21, 2016: Phillips 66 Moves Closer to Sale of Whitegate Refinery in Ireland

Phillips 66's Whitegate Refinery. Phillips 66 could announce the sale of Whitegate oil refinery as early as next week with negotiations believed to be at an advanced stage. Ireland's only refinery has been on the market since November 2015 when its current owner Phillips 66 took the decision to again seek a buyer after earlier attempts to offload it in 2014 failed.. Photo: Phillips 66

The Irish Examiner reported on May 21, 2016 that Phillips 66 could announce the sale of Whitegate oil refinery as early as next week with negotiations believed to be at an advanced stage. Ireland's only refinery has been on the market since November 2015 when its current owners Phillips 66 (P66) took the decision to again seek a buyer after earlier attempts to offload it in 2014 failed. According to sources, a preferred bidder has been identified from a shortlist of interested companies which included private equity firm ArcLight Capital, Irving Oil, UK-based PTFPlusOne and Valero Energy. Canadian family-owned Irving Oil are understood to be the frontrunners in the sales process. Irving is a gas and oil processing, transporting and marketing company headquartered in Saint John with additional operations in the US state of New Hampshire. The Canadian firm was one of the companies touted as a potential buyer for Whitegate in 2007.

Whitegate reported losses in 2014 of more than $280m representing a fivefold increase on the $58m loss it made the previous year. Phillips 66 reduced the value of the plant and equipment resulting in an impairment cost of $127.6m in addition to its $146m operating loss.[331]

[edit] May 18, 2016: Opponents Vow to Stay in Fight Against Phillips 66 Santa Maria Rail Project

Chris McGuinness wrote in the New Times on May 18, 2016 that feelings ran high at the meeting of the SLO County Planning Commission when commission members moved forward with plans to approve a modified version of the proposed Phillips 66 rail spur project, with members of the audience booing commissioners who expressed their support of the project, and cheering those who did not. Heidi Harmon, a local activist and opponent of the project, said that the commissioners' actions at the meeting may have been disheartening but would also serve to further galvanize those who oppose it. "I think they were disappointed and disgusted, but not discouraged," Harmon said. "I think they were trying to thread the needle," said Laurance Shinderman, a member of the Mesa Refinery Watch Group, an organization that opposes the project. "They bought into Phillips' shell game. ... We were disappointed." Whatever the commission's final decision is, it can still be appealed to the SLO County Board of Supervisors, the California Coastal Commission, and eventually the court system. The project will come back before the Planning Commission Sept. 22, and will include reopening public comment.[332]

[edit] May 16, 2016: San Luis Obispo County Planning Commission Agrees to Move Forward with Phillips 66 Santa Maria Refinery Rail Project

KSBY reported on May 16, 2016 that the San Luis Obispo County Planning Commission agreed to move forward with a proposal to extend a rail spur at the Phillips 66 Santa Maria Refinery. There was a consensus by straw vote to approve the project in the future but no formal vote was put on the record. Many people have expressed concerns over the safety risks associated with the project, which is expected to result in three oil trains traveling into the refinery each week. The commissioners suggested some conditions for the project that will be later formalized. Another Planning Commission meeting is scheduled for September 22, when the commissioners will open up those conditions for public comment. Even if the Planning Commission does give final approval to the project, it still would have to go through the County Board of Supervisors for an appeals process and then the Coastal Commission.[333]

[edit] May 11, 2016: Petroleum Engineer Explains "Rockets and Feathers" in the Refining Business

Robert Rapier, a former engineer at Phillips 66's Billings Refinery, wrote in Investors Business Daily on May 11, 2016 about a well-known phenomenon in the refining business called “rockets and feathers.” "It means that when oil prices rise, gasoline prices go up like a rocket," says Rapier. "But when oil prices fall, gasoline prices drift down like a feather." Several studies have confirmed this effect, which is driven by consumer behavior. When gasoline prices are climbing consumers will drive out of their way to save a nickel on a gallon of gasoline. Competition is more intense, but every filling station has a financial incentive to keep up with increases in the price of crude and wholesale gasoline. But when prices are falling consumers do less comparison shopping. As a result, refiners and retailers are much slower to reduce prices as oil prices fall. According to Rapier a general rule of thumb is that falling oil prices earn refiners higher margins, while rising crude costs hurt them.[334]

[edit] May 10, 2016: Mid-Continent Refineries Including Phillips 66 Wood River Refinery Brace for Prolonged Shutdown of Canadian Oil After Wildfires

Argus Media reported on May 10, 2016 that Midcontinent refiners including Phillips 66 will likely tap into crude storage at Cusing and use Gulf coast pipelines to make up for Canadian crude supplies curtailed by wildfires raging through Alberta, Canada that have displaced thousands from communities tied to oil sands development and shut in more than 1mn b/d of production. Refiners did not yet know exactly how the disaster would affect crude shipments into the US midcontinent, which averaged 2.1mn b/d last year but sources familiar with operations expected some kind of disruption and said companies were making plans for alternate supplies. In the wake of the fires those refiners may now turn to continued access to near-record volumes at the crude oil storage hub in Cushing, Oklahoma. Crude in Cushing storage has swollen to a record 67.5mn bl this year, and were last week at 66.3mn bl. Taking Cushing crudes would be a change in diet for refiners like BP, Marathon Petroleum and Phillips 66, which have all undertaken major expansions to their ability to process oil sands crude over the past five years. Phillips 66 declined to comment on specific supply adjustments but said the company does expect reductions to its crude supply. The US independent refiner imported an average 200,000 b/d in 2015 for the 356,000 b/d Wood River refinery in Roxana, Illinois, it operates with Canadian integrated firm Cenovus.[335]

According to Reuters oil producers and refiners are bracing for a prolonged shutdown and possible supply constraints from Canada's vast oil sands region as a destructive wildfire raged for a second week. Officials said resuming operations would be a challenge and no timeline had been considered. "This production is not gone for good, yet when fires are controlled, restarting production will take several more weeks, even without damage," energy analysts at Morgan Stanley said in a note. Three firms have issued warnings of "force majeure" events, including BP Plc, which produces oil in Canada via a partnership with Husky, Suncor Energy Inc, the largest Canadian oil producer, and U.S. refiner Phillips 66. Force majeure is an unforeseen event that prevents a party from fulfilling a contract. The notices were for the inability to deliver on some contracts for Canadian crude. Record U.S. inventories and plentiful supplies in storage in western Canada will offset some of the losses from the blaze but prolonged outages in the oil sands, which has the world's third-largest crude reserves, could roil producers and traders' contracts and order books.[336]

[edit] May 6, 2016: Documentary "High Stakes" Premieres with the 'Real Story' of E. W. Marland, Preempting Hollywood's Inaccuracies

Documentary "High Stakes" Tells the 'Real Story' of E. W. Marland. Rob Boddick and Leasha Combes portray E.W. and Lydie Marland in a re-enactment from the documentary “High Stakes: The Life and Times of E.W. Marland.” This depicts a party at the mansion at which E.W. introduces Lydie as his new wife. Photo: High Stakes

The Tulsa World reported that “High Stakes: The Life and Times of E.W. Marland" premiered in Ponca City on May 6, 2016 and will premier in Tulsa on May 12, 2016. The hope is that people learn the real story of oilman, politician, and philanthropist E. W. Marland from the documentary and want to tour the Marland Mansion and the Marland Grand Home to learn more of the story.[337] The documentary, filmed by Scott Swearingen and Steve Herrin, was funded by a grant of $100,000 from the Marland Estate Foundation. “The project was completely funded with no city funds used,” said David Keathly, director of the Marland Mansion. "We have been working on it over a year.”[338]

The impetus for the documentary came in February, 2013 when Hollywood film producer Harvey Weinstein announced “The Ends of the Earth,” a film about E.W. Marland based on a screenplay from Oscar-winner Chris Terrio of “Argo". The hot film project seemed to come together quickly with Jennifer Lawrence slated to play Lydie Marland, the governor’s second wife, and David Russell selected to direct the picture. Residents of Ponca City were excited to learn that a movie would be made about one of it's most prominent citizens as rumors circulated that principal filming and production of the major motion picture would be done in Ponca City and that Christian Bale or Johnny Depp were being considered for the role of E. W. Marland.

But in May, 2013 a Ponca City citizen alerted local civic leaders to the contents of Chris Terrio's screenplay and passed on a copy of the script for "The Ends of the Earth." When members of the E.W. Marland Estate Foundation were given the opportunity to take a look at Terrio's screenplay and it's “dramatic license, or, well, inaccuracies,” said Scott Swearingen, they decided that something needed to be done. "There was going to be an emphasis on drama, with the facts going by the wayside. The [Marland Estate] Foundation was concerned that people come to see the mansion with that story in mind. The wrong story,” said Swearingen, co-producer of the documentary, who has crafted video productions for exhibits at Gilcrease Museum of Art and the Woody Guthrie Center. Apparently Marland was not going to be shown in a good light, said Swearingen. “Lydie was going to be the heroine of the story, which would show her doing things to help employees that E.W. wouldn’t do, when it was actually E.W. who had instituted the policies that helped these employees.” The foundation hired Swearingen and Herrin to “tell the story as it happened — to get it right.”

Meanwhile the Hollywood production of "The Ends of the Earth" ” has now gone silent and all involved have moved on to other projects. E. W. Marland's story is "a great story about never giving up. It’s remarkable to see how a person accumulates so much money and then loses it in a perfect storm. Why would you need to fictionalize this?” says Steve Herrin, one of the producers of "High Stakes". “The real story is so much more interesting than anything Hollywood could come up with.”[339]

[edit] May 4, 2016: Philips 66 Transfers Ownership of Ponca Refinery's Standish Pipeline to Phillips 66 Partners LP

Businesswire reported on May 4, 2016 that Phillips 66 Partners LP announced that it has reached agreement with Phillips 66 to acquire the Standish Pipeline, a refined petroleum products pipeline system extending from Phillips 66’s Ponca City Refinery in Ponca City, Oklahoma, to the Partnership’s North Wichita Terminal in Wichita, Kansas. Also involved in the sale are the remaining 75 percent interest in Phillips 66 Sweeny Frac LLC, which owns the newly constructed Sweeny Fractionator One and Clemens Caverns storage facility. The total value of the sale is $775 million. “The acquisition provides the Partnership with full ownership in Sweeny Fractionator One and the Clemens Caverns, further diversifying our fee-based portfolio,” said Greg Garland, Phillips 66 Partners chairman and CEO. “The addition of the Standish Pipeline is consistent with our plan to build out our current systems that are strategically integrated with Phillips 66 refineries. We remain on track to deliver our stated five-year compound annual distribution growth target of 30 percent through the end of 2018.”[340]

[edit] May 3, 2016: Rancher Files Lawsuit Against Phillips 66 for Pollution from Pipeline from Santa Maria Refinery

Cal Coast News reported on May 3, 2016 that Rob Rossi, an owner of the more than 14,000 acre Santa Margarita Ranch, filed a lawsuit against ConocoPhillips and Phillips 66 on Friday for allegedly operating a pipeline that has contaminated a portion of his ranch. The pipeline extends 78 miles from Phillips 66's Santa Maria refinery to a junction pipe station in the San Joaquin Valley. In the years since the pipeline was constructed, the defendants removed or replaced the pipeline twice. During one of the maintenance projects, hydrocarbons were discovered to have leaked into the soil, according to the lawsuit. The Central Coast Regional Water Quality Control Board then opened an investigation that led to the discovery of oil related contaminants in the soil and groundwater in areas adjacent to the pipeline. The contaminates discovered showed that the leaks were not only historical but current, as some of the chemicals found were not added to oil until 2000, according to the lawsuit. In his lawsuit, Rossi is seeking that the defendants stop any continuing pipeline leaks, clean up any contamination from its pipeline on the property, reimburse Rossi for expenses related to the leaks, indemnify Rossi, pay damages for injury to the property, pay civil penalties for contaminating drinking water and pay Rossi’s legal costs. “Defendants’ petroleum hydrocarbon contamination on the headquarters property, in addition to posing a continuing threat to human health and the environment, has impeded and, until abated, will continue to impede Rossi’s ability to freely and beneficially use, enjoy and develop his property,” the lawsuit says.[341]

[edit] April 29, 2016: Ponca Refinery Earns $33.8 Million in Annualized Profit for Phillips 66 in Q1 2016

Ponca Refinery Earns $33.8 Million in Annualized Profit for Phillips 66 in Q1 2016. Ponca Refinery was the fourth most profitable of Phillips' fifteen worldwide refineries for Q1 2016. Ponca Refinery earned $8.5 million for Phillips in the first quarter of 2016 for an annualized profit of $33.8 million. Click graphic to expand. Graphic: Hugh Pickens

Phillips 66 reported their first quarter earnings for 2016 on April 29, 2016 and the results of analysis of earnings for Phillips' Refining Business Segment show Ponca Refinery is the fourth most profitable of Phillips' fifteen worldwide refineries. Ponca Refinery earned $8.5 million for Phillips in the first quarter of 2016 for an annualized profit of $33.8 million. Phillips' Sweeney Refinery in Old Ocean, TX and Alliance Refinery in Belle Chasse, LA tied as the most profitable refineries with $9.2 million in earnings for an annualized profit of $36.9 million. The annualized profit of Phillips 66's five most profitable refineries for the first quarter of 2016 are:[342]

See Appendix 4 for detailed calculations:

[edit] April 29, 2016: Phillips 66 Net Earnings Fall 61 percent as Refining Margins Plummet

FuelFix reported on April 29, 2016 that Phillips 66 saw its quarterly net income crater by 61 percent as the spread between falling crude oil and refined products prices — like gasoline and other fuels — dropped dramatically. Phillips 66 still reported quarterly earnings of $385 million on Friday, but that was down greatly from $987 million during the beginning of 2015, and from $650 million in the fourth quarter. “Weaker margins impacted our financial results in the first quarter,” said Greg Garland, chairman and CEO of Phillips 66, said in a prepared statement. “Our businesses ran well, and we remain focused on operating excellence with industry-leading safety performance.” Phillips 66 profits from their chemicals sectors dipped only slight from a year ago, but the refining earnings alone fell by 84 percent from $538 million down to $86 million. Last year, refining represented well more than half of Phillips 66’s profits.[343]

[edit] April 29, 2016: Garland Says Efforts Are Underway to Increase Heavy Canadian Crude at Billings Refinery to 100%

Greg Garland told analysts during the 2016 first quarter earnings conference call on April 29, 2016 that t the Billings refinery, efforts are underway to increase the amount of heavy Canadian crude we can run to 100%.[344]

[edit] April 29, 2016: Crack Spreads in the Central Corridor including Ponca Refinery Were 24% Lower This Quarter

Greg Garland told analysts during the 2016 first quarter earnings conference call on April 29, 2016 that in the Central Corridor lower margins accounted for the majority of the reductions in adjusted earnings from the fourth quarter as market cracks were 24% lower.[345]

[edit] April 29, 2016: Santa Maria Refinery Continues to Be Affected by Plains Pipeline Outage

Greg Garland told analysts during the 2016 first quarter earnings conference call on April 29, 2016 that the Santa Maria continues to be affected by the Plains Pipeline outage.[346]

[edit] April 29, 2016: Sweeny Hub is Nearing Completion

Greg Garland told analysts during the 2016 first quarter earnings conference call on April 29, 2016 that development of the first phase for the Sweeny Hub is nearing completion. "The LPG export terminal is 80% complete, is on time and on budget," said Garland. "The completion of the terminal will represent a major step in the development of a world class energy complex within integrated refining, chemical and midstream assets. PSXP remains an important part of our midstream growth strategy the fee based assets within its portfolio continue to perform well."[347]

[edit] April 29, 2016: Phillips Expects to Conclude the Divestiture Process with Whitegate Refinery This Year

In answer to a question from Neil Mehta, Kevin Mitchell told analysts during the 2016 first quarter earnings conference call on April 29, 2016 that Phillips has a process underway for divestiture at Whitegate and we expect that will conclude this year.[348]

[edit] April 29, 2016: Phillips Is Not Actively Seeking to Divest Santa Maria, Wilmington, and Rodeo Refineries in California

In answer to a question from Neil Mehta, Kevin Mitchell told analysts during the 2016 first quarter earnings conference call on April 29, 2016 that although Phillips has talked about divestiture of its California refineries in the past at this point Phillips will just hold on to them at this point in time. "California we talked about a lot the hold cost or the option value is really not much there is not a lot of capital in front of us in California last few year margins have been very good in California so it's a net cash contributor," said Mitchell. "And you think about could you sell asset probably but could we did good value for it, probably not and so I think we just hold it at this point in time they're good assets, they're probably mid back in terms of where they set their cost structure, but given the option value to keep, I think it'll just hang on."[349]

[edit] April 29, 2016: Wood River Refinery is On Schedule for Debottlenecking Project This Quarter

Greg Garland told analysts during the 2016 first quarter earnings conference call on April 29, 2016 that at the Wood River Refinery we’re undergoing debottlenecking in our own schedule for completion in the third quarter[350]

[edit] April 29, 2016: FCC Modernization is on Schedule at Cedar Bayou

Greg Garland told analysts during the 2016 first quarter earnings conference call on April 29, 2016 that work on the FCC modernization is on schedule at Cedar Bayou.[351]

[edit] April 29, 2016: How Educational Attainment of Students in Ponca City Schools Compares to Other Districts in Northern Oklahoma

Educational Attainment for Students in Cities in Northern Oklahoma. According to the data, students in the Ponca City School District have "about average" test score with educational attainment about 0.2 years below the average expected level of achievement within the United States. For comparison students in the Bartlesville School District about about 0.9 years above the average expected level of achievement within the United States. Click on the graphic to enlarge. Graphic: Hugh Pickens

The New York Times reported on April 29, 2016 on a study by researchers at Stanford University that provides data on reading and math test score data from across the country. The researchers are making the data files public so that anyone who is interested can obtain detailed information about American schools, communities, and student success. "We hope that researchers will use these to generate evidence about what policies and contexts are most effective at increasing educational opportunity, and that such evidence will inform educational policy and practices."

The data shows average test scores by school district for grades 3 to 8. According to the data, students in the Ponca City School District have "about average" test score with educational attainment about 0.2 years below the average expected level of achievement within the United States. For comparison students in the Bartlesville School District about about 0.9 years above the average expected level of achievement within the United States. Comparing average test scores for students in the Ponca City School District with other Oklahoma communities near Ponca City with a similar size to Ponca City yields the following results:

One-unit below zero means that students in the district are one grade level behind the average; one-unit above zero means that students in the district are one grade level above the average. A one-unit change is interpreted as a grade-equivalent change, such as the difference in achievement between grades 3 and 4.[352][353]

[edit] April 28, 2016: U.S. Refiners' Years-Long Windfall from Cheap Crude Has Come to an End

Retuers reported on April 28, 2016 that U.S. refiners' years-long boom from cheap and plentiful crude ground to a halt in the first quarter as swelling oil inventories and weak demand pushed revenues to their lowest in years and punished profits. Refiners are now paying the price for ramping up production in 2015 to chase healthy crack spreads that have now led to higher inventories and weaker margins as demand slackened during the mild winter. PBF Energy Inc and CVR Energy reported quarterly losses of $66.5 million and $68 million, respectively, while Marathon Petroleum Corp eked out a $1 million profit after reporting earnings of almost $900 million a year earlier. "They were incentivized to run at higher rates and put more barrels in inventory. That's the overhang we're seeing right now," said CVR Chief Executive Jack Lipinski. Distillate and gasoline inventories in the United States have risen to near record highs and crack spreads, the difference between the prices of crude oil and refined products, hit their weakest in years forcing refiners to voluntarily lower output in the most widespread cuts since the global financial crisis.[354]

[edit] April 27, 2016: Phillips Idles Part of Wood River Refinery After Heavy Storms Knock Out Power

Reuters reported on April 27, 2016 that Phillips 66 has unexpectedly shut down a 64,000 barrel-per-day crude unit and associated vacuum distillation unit and a coker at Wood River Refinery after heavy storms knocked out power to the western portion of the plant on April 26, 2016, according to a source familiar with the plant's operations. It is still unclear when the units will be restarted, the source said.[355]

[edit] April 27, 2016: Winds Tear Off Part of Roof at Phillips 66 Research Center Campus in Bartlesville

KJRH reported on April 27, 2016 that powerful wind gusts in Bartlesville tore off part of the roof at a building on the Phillips 66 Research Center campus off Highway 60 west of Bartlesville. A spokeswoman said no one was injured there, and the damage did not affect any business operations.[356]

[edit] April 22, 2016: Phillips 66 says Planned Work is Underway at Sweeny Refinery after a Power Malfunction

Reuters reported on April 27, 2016 that Phillips 66 says planned work is underway at its 247,000 bpd Sweeny, Texas refinery after an April 22 power malfunction.[357]

[edit] April 21, 2016: Phillips 66 Donates $500,000 to Disaster Fund After Houston Flooding

The Cleveland Advocate reported on April 21, 2016 that Phillips 66 donated $500,000 in response to the devastating storms and flooding in Houston. Their donation to the Texas Floods coincides with National Giving Day, the one-day Red Cross fundraising campaign supporting the organization’s mission to help people in need of emergency support. "Our heartfelt thoughts go out to the people affected by the Houston area floods,” said Greg Garland, Chairman and Chief Executive Officer of Phillips 66. “We are extremely grateful to the first responders, medical personnel and volunteers who have come to the aid of so many.” Initial reports show more than 4,500 homes in the Greater Houston area took on water over the last few days and the threat of more flooding will continue throughout this week. The American Red Cross has been working day and night to offer shelter, meals, relief supplies and comfort to flood victims. “We are greatly appreciative of Phillips 66’s donation at this critical time in our community,” said Steve Vetrano, Regional CEO, American Red Cross of the Texas Gulf Coast. “Over the past few days, for example, the Red Cross has provided nearly 700 shelter stays and 7840 meals to those in need. Phillips 66 is helping us help others as we respond to the disaster and begin to help people recover.”[358]

[edit] April 20, 2016: Air Board Approves Rule Requiring Sulfur Dioxide Pollution Reductions from Phillips 66 Rodeo Refinery

Phillip 66 Rodeo Refinery to Reduce Sulfur Dioxide Emissions. The Chico News reported on April 21, 2016 that the Bay Area air board approved a rule requiring large sulfur dioxide pollution reductions from the Phillips 66 Rodeo Refinery that recycles coke, a hard, black refining byproduct. Those reductions will amount to a 1 percent or more cut in the total emissions from the Bay Area's refining industry, the air district estimated. Photo by Thomas Hawk Flicker Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

The Chico News reported on April 21, 2016 that the Bay Area air board approved a rule requiring large sulfur dioxide pollution reductions from the Phillips 66 Rodeo Refinery that recycles coke, a hard, black refining byproduct. Those reductions will amount to a 1 percent or more cut in the total emissions from the Bay Area's refining industry, the air district estimated.

Bay Area oil refineries including Chevron in Richmond, Shell in Martinez, Tesoro north of Concord, Phillips 66 in Rodeo, and Valero in Benicia will be required to increase monitoring of air pollution leaving their plants and, for the first time, disclose properties of crude oil coming in, under a regional air board rule adopted. The emissions tracking rule was adopted 18-3 by the air district board after more than 20 people spoke on the proposal developed over three years. Bay Area oil refineries include Chevron in Richmond, Shell in Martinez, Tesoro north of Concord, Phillips 66 in Rodeo, and Valero in Benicia. For the first time in California, refineries from a region will be required to give detailed information about properties of crude oil stock, including concentrations of toxic benzene and sulfur dioxide.

The rule is the latest in a series of pollution reduction measures proposed after a large fire at the Chevron oil refinery in Richmond in 2012 sent thousands of people to hospitals with smoke-related symptoms. For years, refinery neighbors have demanded more monitors to track air pollution from the plants. Environmentalists say the rule fails to go far enough because it doesn't set hard limits on total emissions from refineries. "There is some good in this rule, but it's a sideshow that distracts from the district's need to set an overall cap on refinery pollution," said Greg Karras, scientist with Communities for a Better Environment, a statewide environmental group.[359]

[edit] April 15, 2016: Malfunction at Sweeny Refinery

Reuters reported on April 15, 2016 that at 1 pm two 20" vent valves opened up unexpectedly at Phillips 66's Sweeny Refinery causing the C-100 blower to experience a low air flow condition. Employees worked to reset the vent valves, restart the blower and return the oil feed to the process unit. Phillip reported there was a release from the flue gas stack unit 27.1 fluid catalytic cracking unit and "high CO conditions called for the shutdown of the electrostatic precipitator, thereby causing excess opacity as particulates exited the regenerator flue gas stack."[360]

[edit] April 10, 2016: Keystone Pipeline Restarts at Reduced Pressure

Reuters reported on April 10, 2016 that TransCanada Corp said it had restarted the 590,000- barrel-per-day Keystone crude pipeline at reduced pressure after it received American authorization to do so. The pipeline, which delivers light and heavy crude from Hardisty, Alberta, to Cushing, Oklahoma, and to Phillips 66's Wood River Refinery in Illinois, was shut on April 2 after a potential leak was discovered in South Dakota. The company said it identified the leak near its Freeman pump station in Hutchinson County, South Dakota.[361]

Phillips 66 shut several units at its Wood River Refinery in Roxana on April 4, 2016, sources said. Phillips shut down a 64,000 bpd “sour” unit — which processes oil with a high sulfur content — and a 16,000 bpd coker due to the disruption in supply, two sources told Reuters. The company used the opportunity to advance some planned work on the units during the shutdown, which could extend beyond the restart of the pipeline, the sources said. The refinery imported nearly 200,000 bpd of heavy sour Canadian crude last year, according to U.S. government data.[362]

[edit] April 5, 2016: Phillips 66 Midstream Joint Venture Cuts 300 Jobs

Phillips 66 Midstream Joint Venture Cuts 300 Jobs. Denver-based DCP Midstream, a pipeline and gas processing joint venture between Phillips 66 and Spectra Energy, is eliminating 300 positions nationwide. Photo: DCP Midstream's O'Connor Natural Gas Processing Facility by Mark Udall Flickr Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

FuelFix reported on April 5, 2016 that Denver-based DCP Midstream, a pipeline and gas processing joint venture between Phillips 66 and Spectra Energy, is eliminating 300 positions nationwide. After the 300 cuts, DCP will still employ about 2,900 overall.

In a prepared statement, DCP Chairman and CEO Wouter van Kempen said the joint venture reduced its 2016 capital budget down to $250 million. In comparison, Phillips 66’s contribution alone to DCP’s capital budget last year was $550 million. Van Kempen noted DCP completed most of its capital construction program last year. “This is a challenging environment that we are managing through and we continue to execute on our strategy to reset our break-even cost to ensure we are the most reliable, safe, low-cost midstream services provider sustainable in any environment,” van Kempen said in a prepared statement.[363]

[edit] April 4, 2016: Keystone Pipeline Closure Affects Operations at Phillips 66's Wood River Refinery

Reuters reported on April 4, 2016 that the sudden closure of the Keystone oil pipeline from Canada due to a potential leak in South Dakota has forced Phillips 66 to shut several units at its Wood River Refinery in Roxana, sources said. Phillips’ Wood River Refinery has shut down a 64,000 bpd “sour” unit — which processes oil with a high sulfur content — and a 16,000 bpd coker due to the disruption in supply, two sources told Reuters. The company is using the opportunity to advance some planned work on the units during the shutdown, which could extend beyond the restart of the pipeline, the sources said. The refinery imported nearly 200,000 bpd of heavy sour Canadian crude last year, according to U.S. government data.

Houston-based Phillips 66 confirmed that it cut rates at the refinery to deal with the pipeline issues, but declined to discuss or confirm the shutdown of the units. “At this time we are still meeting product supply commitments to our customers in the region,” Phillips 66 said.[364]

[edit] March 29, 2016: Chevron Phillips Expands Polyalphaolefins Capacity at Cedar Bayou Plant

Chevron Phillips Chemical Plant at Cedar Bayou to expand the low viscosity polyalphaolefins (PAO) capacity. Chevron Phillips Chemical Company LP, a joint venture between Chevron and Phillips 66, has announced their decision to expand the low viscosity polyalphaolefins (PAO) capacity at its Cedar Bayou plant in Baytown, Texas by 10,000 metric tons per year or about 20 percent. Construction will begin in April 2016 with completion and startup expected by mid-2017. Photo: Fuelfix.

Businesswire reported on March 29, 2016 that Chevron Phillips Chemical Company LP, a joint venture between Chevron and Phillips 66, has announced their decision to expand the low viscosity polyalphaolefins (PAO) capacity at its Cedar Bayou plant in Baytown, Texas by 10,000 metric tons per year or about 20 percent. Construction will begin in April 2016 with completion and startup expected by mid-2017. "The expansion will allow the company to meet the increasing demand for high-performance lubricants in automotive and industrial applications, as demand for higher energy efficiency and high-quality basestocks continues to grow. This additional capacity enables us to expand with our customer base to meet the future requirements of the industry," said Global PAO Business Manager for Chevron Phillips Chemical Miles Oberton. Chevron Phillips Chemical is a leader in the development and production of PAOs, marketed under the brand name Synfluid® PAO, which are used for a variety of automotive and industrial applications including engine oils, gear oils and greases.[365]

[edit] March 25, 2016: Phillips 66 to Pay for Damaged Roads from Pipeline Construction Near Sweeny Refinery

The Brazoria Facts reported on March 25, 2016 that County Commissioners in Brazoria County, home of Phillips 66's Sweeny Refinery, have voted to hire a third-party firm to help prepare bidding and engineering documents for the second, third and fourth phases of the agreement with Phillips 66, with a stipulation the refinery shoulder the more than $157,000 in professional services costs for repair costs for roads, all of which fall in either Precinct 1 or Precinct 4 that have been damaged by heavy traffic caused by pipeline construction. Precinct 3 Commissioner Stacy Adams said while he agreed the county should not do the work in-house, he also didn’t think taxpayers should be responsible for the professional services expenses. “In this case, we would not be doing these roads but for the fact that they tore them up. They’d be being repaved over the next five to seven years in the normal course of business with no outside services,” Adams said. “So if any outside services were required, they should pay for them. “They’re saving $100 million in taxes over 10 years. You think $157,000 is going to bother them?” Commissioners decided to ask Phillips 66 to take on the professional services expenses, which County Judge Matt Sebesta said they agreed to do.“These are going to be brand-new roads,” Payne said.[366]

[edit] March 16, 2016: Matthew DiLallo Says the Biggest Problem with ConocoPhillips is its Tarnished Reputation

Benjamin Franklin is credited with saying that "it takes many good deeds to build a good reputation, but only one bad one to lose it." That's certainly the case at ConocoPhillips, which spent many years building a good reputation with investors for being a conservative oil company whose dividend could weather any storm. "ConocoPhillips biggest problem right now is that it has a management team that has lost the trust of investors," says Matthew DiLallo. "After spending a year telling investors that its dividend was safe, the company went against its word. In doing so, it destroyed a reputation that took quite a while to build, and now will take even longer to rebuild. Photo: Wikimedia

Matthew DiLallo writes at Fox Business that ConocoPhillips spent many years building a good reputation with investors for being a conservative oil company whose dividend could weather any storm. "That reputation, however, was shredded to pieces after the company significantly reduced the payout earlier this year," says DiLallo. "That tarnished reputation is a big problem for the company, because it might never win back investors' trust."[367]

ConocoPhillips CEO Ryan Lance told stockholders during the fourth quarter conference call in 2014 that "as we have said consistently since this spin, our top priority is the dividend. This is an important part of our investment thesis. The dividend provides discipline on our capital allocation process and we believe it is important in a mature business, so no change to the outlook on the dividend." ConocoPhillips CFO Jeff Sheets added during the company's third-quarter conference call in 2015 that "we think of a dividend as something that really should only go one direction and there can be some variability in the rate at which dividend increases. But the key to a dividend is to have it be consistent and to grow it over time. So we haven't really had significant discussion to talk about trying to adjust the dividend. It's an important part of our value proposition. It puts a lot of discipline into the system to have that dividend. So you've heard us talk about it pretty consistently. You're going to continue to hear us talk about that as a key component of our value proposition."[368][369]

Given the constant reassurances surrounding the dividend, it was a shock to see ConocoPhillips' announcement on February 3, 2016 that it was reducing its dividend by 66%. Clearly, it was a prudent move by the company, but it is a move that should have been better telegraphed from the start. "ConocoPhillips biggest problem right now is that it has a management team that has lost the trust of investors," concludes DiLallo. "After spending a year telling investors that its dividend was safe, the company went against its word. In doing so, it destroyed a reputation that took quite a while to build, and now will take even longer to rebuild. That could come back to haunt the company later because, not only will its own investors be reluctant to stick with the company, but it will have a hard time wooing new investors, given its tarnished reputation."[370]

[edit] March 15, 2016: Phillips Sends Its First US Crude Cargo to Singapore

Phillips is chartering a vessel that’s loading crude in Texas, and headed to Singapore, according to fixture data available via Thomson Reuters Eikon. The Cape Bari, a Suezmax tanker, is expected to discharge on April 8.[371]

CNN reported on January 29, 2016 that just weeks after Congress lifted a 40-year ban on exporting oil, the first shipments of the black stuff left U.S. ports for Europe. "The fact that producers have free access to the global market will make it easier for U.S. supply to respond to disruptions around the world," said Jason Borduff, a former energy adviser to President Obama who is currently a professor at Columbia University. There are also logistical hurdles keeping U.S. oil from straying too far from home. Due to the longstanding export ban, America's Gulf Coast doesn't currently have the equipment in place needed to load the giant supertankers that other countries typically use to ship oil long distances, according to Nilofar Saidi, a crude oil market analyst at ClipperData. Smaller ships can be used on voyages to Latin America and Europe, but aren't ideal for far-flung places like East Asia. "Given the market situation today, there's going to be caution about large-scale infrastructure investments," Borduff said. U.S. refiners have spent heavily on upgrades in recent years that allow them to process the ultra-light crude being pumped from U.S. shale fields. That means it probably makes more economic sense to leave American oil at home for now.[372]

The American Journal of Transportation reported on September 9, 2015 that Phillips 66’s investments in storage and pipeline infrastructure in southeastern Texas gave the company an “option on exports” should the decades-old domestic crude export ban be lifted, Chief Executive Officer Greg Garland told analysts. “I do think people will make investments to support export infrastructure and we want to do that too,” Garlands aid during a webcast presentation at the Barclays CEO Energy-Power conference in New York. In 2014 Phillips 66 acquired a 7.1 million barrel crude and refined products terminal in Beaumont, Texas, that Garland said was “really an option on crude exports.” The terminal has two Aframax-capable docks and a barge dock. It also has rail and truck offloading facilities. Phillips is a 25 percent partner in two Energy Transfer Partners pipeline projects that aim to move North Dakota Bakken and Canadian heavy crude to Sunoco Logistics Partners’ storage terminal in nearby Nederland by late 2016.[373]

Reuters reported on April 11, 2014 that after securing an export license in 2013, Phillips is now exporting oil to Canada. A Phillips spokesman declined to say where in Canada its exports are headed and in what volume and did not disclose if the oil will reach its destination via rail or barges. "As a matter of practice, Phillips 66 does not comment on commercial activity," said spokesman Dennis Nuss. The United States does not allow exports of its own oil, but makes exceptions such as barrels going to Canada and re-exports of foreign oil.[374]

[edit] March 11, 2016: Public Comment Closes on Phillips 66's Santa Maria Rail Project

KSBY reported on March 11, 2016 that more than 120 people, both proponents and opponents, took the podium for the final day of comment on Phillips 66's Santa Maria Rail Project. The first three days of public hearings drew more than 400 people from all around the state. "It's been a long day, it has been a long four weeks," said San Luis Obispo Planning Commissioner Don Campbell. "We are happy to begin deliberations now. We have a lot of information to go through."

In the previous hearings, hundreds of people spoke out, stating how the risk of a derailment would be catastrophic. Supporters of the proposal pointed to the company's safety record as well as the jobs that would be created from the extension. Commissioners will be reviewing comments received from the public and federal laws on the proposed project. They will also be meeting with the county's attorneys regarding local laws and other legal obligations if they decide to approve the project. "It's going to take us some time to digest what we've heard from the public and to review all the components before we can make a decision on the project," said Campbell.[375]

[edit] March 9, 2016: Greg Garland in Ponca City for Town Hall Meeting with Employees at Ponca Refinery

The Ponca City News reported on March 9, 2016 that Phillips 66 CEO Greg Garland and Larry Ziemba, Executive Vice President for Refining, visited Ponca City for a town hall meeting with employees at Ponca Refinery. Garland was hosted by Refinery Manager Tim Siedel.[376]

[edit] March 7, 2016: Phillips 66 to Pay Penalty for Undisclosed Mailers, Misleading Voters in California

Associated Press reported on March 7, 2016 that Phillips 66 agreed to pay $16,000 to California’s campaign finance watchdog after secretly paying $41,000 for 17,000 mailers to Rialto residents in 2012. The mailers opposed a local tax increase on oil companies. Voters rejected the measure. An agreement released Monday shows attorneys for the Fair Political Practices Commission found Phillips 66 avoided disclosing its role by passing payments between two organizations. Phillips 66 told the state it believed its payments were legal, but attorneys for the agency decided it misled voters and warranted a penalty.[377]

[edit] March 4, 2016: Phillips Reports Emission, Repairs at Borger Refinery

Nasdaq reported on March 4, 2016 that Phillips will begin a month-long emissions event related to maintenance repairs at its Borger refinery. "The line going to Unit 34's SRU [sulfur recovery unit] incinerator is partially plugged with sulfur," it said in a filing to the Texas Commission on Environmental Quality. It said sections of that line will be heated in an effort to melt out the sulfur, and that "there may be visible emissions during the heating of the line." Phillips said, however, that the Unit 34 SRU isn't scheduled to go down. It said the emissions event was scheduled to begin Friday morning and last until April 4.[378]

[edit] March 3, 2016: Phillips Took 20% of Their Nationwide Refining Capacity Offline at One Point in February

Phillips 66's Ponca Refinery. At one point during February, 2016, Phillips 66 took about 400,000 barrels a day of crude processing offline from its 2.1 million barrels capacity nationwide. Phillips CEO Greg Garland said Phillips 66 refineries are now back up to running more than 90 percent of capacity, after dipping down to about 80 percent. “We all ran max gasoline (production) in the fourth quarter,” said Garland adding that refineries built up too much storage inventory of winter-blend gasoline. “Generally, when we look in the mirror, we find the enemy. We had to work through that overhang in the first quarter.” Photo: Hugh Pickens.

FuelFix reports that Phillips 66 Chairman and CEO Greg Garland told the Bank of America Merrill Lynch 2016 Refining Conference in New York that at one point during February Phillips 66 took about 400,000 barrels a day of crude processing offline from its 2.1 million barrels capacity nationwide, although he would not cite specific refineries. "We reduced run – we made run cuts, economic run cuts around the system. I think at one point in time we were down almost 400,000 barrels a day across the system," said Garland. Garland added that Phillips 66 refineries are now back up to running more than 90 percent of capacity, after dipping down to about 80 percent. “We all ran max gasoline (production) in the fourth quarter,” said Garland adding that refineries built up too much storage inventory of winter-blend gasoline. “Generally, when we look in the mirror, we find the enemy. We had to work through that overhang in the first quarter.”

Despite the weak quarter, Garland said he expects good gasoline demand this year moving into the busier spring and summer driving seasons, especially since so many people bought gas-guzzling trucks and sport-utility vehicles last year with low gasoline prices.[379][380]

Garland's remarks echoed reports from Reuters on February 10, 2016 that Phillips 66 dumped crude for immediate delivery in Cushing, Oklahoma on February 10, 2016, sparking speculation that the move reflected advance warning of looming output cuts amid sluggish winter demand and record inventories. It was unclear how many barrels Phillips sold, but three traders confirmed at least two deals traded at negative $2.50 and $2.75 a barrel. These deals drew notice among traders, who said the prices were distressed and the timing unusual. U.S. Energy Information Administration data on February 10, 2016 showed inventories at the Cushing, Oklahoma delivery hub hit a record 64.7 million barrels last week - just 8 million barrels shy of its theoretical limit - stoking concerns that tanks may overflow in coming weeks. According to Reuters midwest refiners ran their facilities near full tilt for much of January, averaging more than 96 percent capacity utilization compared with just under 91 percent last year, inundating the region with stocks of gasoline and distillates in what one trader described the market as a "bloodbath."[381][382][383]

[edit] March 3, 2016: Phillips Funds $200 Million Project at Wood River Refinery to Run More Heavy Crude

Greg Garland talked at the Bank of America Merrill Lynch 2016 Refining Conference on March 3, 2016 about some of the optimizing strategies Phillips 66 is utilizing across their system to improve refining margins through selective investments including a $200 million capital project to debottleneck some of the light ends constraints Phillips has at Wood River Refinery so the refinery can run more heavy crude. "When we think about our base refining business, it is a run-well and optimize strategy. It’s manage your costs well, manage your capital well going into this business, and improve your margins through selective investments. You can see we’re spending a little more in refining in 2016. We’re giving you an idea of some of the projects that we’re executing. We have opportunities across the system; at Wood River, we’ve got some de-bottlenecking, essentially to debottleneck some of the light ends constraints we have at Wood River so we can run more heavy crude. We’re going to upgrade the FCC at Wood River, about a $200 million capital project all in, $100 million of EBITDA, so 2 times build multiple, 30-40% return project."[384]

[edit] March 3, 2016: Phillips Funds $150 Million Project at Bayway Refinery to Upgrade FCC

Greg Garland talked at the Bank of America Merrill Lynch 2016 Refining Conference on March 3, 2016 about some of the optimizing strategies Phillips 66 is utilizing across their system to improve refining margins through selective investments including a $150 million project to upgrade the FCC at Bayway Refinery. "As you look at Bayway, we have the opportunity to upgrade the FCC at Bayway. It’s the largest FCC in the northern hemisphere, but it’s like a 1957 Chevy. So we can improve the yield there and make more Phillips 66 gasoline coming out of that, it’s about a $150 million project, $75 million of EBITDA."[385]

[edit] March 3, 2016: Phillips Funds $300 Million Project at Billings Refinery to Move to 100% Heavy

Greg Garland talked at the Bank of America Merrill Lynch 2016 Refining Conference on March 3, 2016 about some of the optimizing strategies Phillips 66 is utilizing across their system to improve refining margins through selective investments including a $300 million project to help move the Billings Refinery to 100% Heavy. "At Billings, we’re moving to 100% heavy. Also run higher tan crude at Billings, $300 million project, $125 million EDBITA. So you can see these are great projects, great build multiples in excess of 30% return on these projects."[386]

[edit] March 3, 2016: Warren Buffett Files with SEC to Purchase Up to 25% of Phillips 66 Stock

Warren Buffett Files with SEC for Up to 25% of Phillips 66 Shares. Greg Garland disclosed at the Bank of America Merrill Lynch 2016 Refining Conference on March 3, 2016 that Warren Buffett now held 14% of Phillips' shares and had filed for up to 25% of Phillips' shares. Garland's remarks follow a report from James Detar in Investors Business Daily on February 12, 2016 that Warren Buffett’s company, Berkshire Hathaway, has been loading up on shares of Phillips 66, fueling speculation that Buffett may buy the oil refiner outright. Photo:Wikipedia

In answer to a question at the Bank of America Merrill Lynch 2016 Refining Conference on March 3, 2016 about Warren Buffet's investment in Phillips 66, Greg Garland disclosed that Buffet presently owned 14% of Phillips' shares and had filed with the SEC to purchase up to 25% of Phillips' shares. "So it’s probably not appropriate for me to comment on Mr. Buffett. We’re certainly happy to have him as a shareholder. A very sophisticated investor, usually long-term holder. I actually think he makes good decisions, too. But we’re happy to have him in the shares. I really can’t comment on his strategy. I think you’re right. He’s filed for 25%."[387]

Garland's remarks follow a report from James Detar in Investors Business Daily on February 12, 2016 that Warren Buffett’s company, Berkshire Hathaway, has been loading up on shares of Phillips 66, fueling speculation that Buffett may buy the oil refiner outright. According to S&P Global Markets Intelligence analyst Cathy Seifert investors are reminded of Buffett's transactions that led up to his $9.7 billion acquisition of lubricant and chemical maker Lubrizol in 2011. “He bought an equity stake and then bought the company,” Seifert told IBD adding that she doesn’t have knowledge of a specific plan by Buffett to buy Phillips 66, but his purchases of its stock follow a well-trodden path. “You have to think what his patterns tend to be,” Seifert said. “This move lately was an opportunity to, No. 1, diversify holdings and, No. 2, gain opportunistic exposure to the space at an attractive price. It’s a function of diversification and a long-term macro view of an opportunity to get in.”

If Buffett is planning an acquisition of Phillips 66, it would likely be among his largest takeovers ever. Phillips 66 has a market cap of $40 billion. Last month, Berkshire closed its $37.2 billion purchase of Precision Castparts, its biggest acquisition to date. Phillips 66 CEO Greg Garland was asked about the big Berkshire purchases on a Jan. 29 earnings call but only said, “We don’t comment on conversations with shareholders.” Berkshire didn’t respond to requests for comment.[388]

[edit] March 2, 2016: Don Nickles Reacts to Death of Aubrey McClendon

NewsOK reported on March 2, 2016 that Ponca City native and former United States Senator Don Nickles expressed deep regret over the death of Aubrey McClendon, the natural gas entrepreneur who died in a fiery single-car crash one day after he was charged with conspiring to rig bids for oil and natural gas leases.

“Aubrey McClendon’s passing is a very sad day for Oklahoma and for our country," said Nickles. "He and Tom Ward were responsible for founding and building Chesapeake Energy and providing thousands of Oklahomans and others across the country with the best job of their lives. He was energetic and a real visionary among energy leaders and helped lead the effort to make our country energy independent and break the back of OPEC. Aubrey and Katie also had an enormous positive impact on Oklahoma City and Oklahoma with their generosity.”[389]

Nickles was a member of the Board of Directors of McClendon's Chesapeake Energy from 2005 to 2012.[390]

[edit] February 25, 2016: Comments Are Evenly Split at Second Hearing for Phillips 66's Santa Maria Rail Project

The San Luis Obispo Tribune reported on February 25, 2016 that the first two days of the hearing on Phillips 66's Santa Maria Rail Project held on February 4 and 5 drew hundreds of people to San Luis Obispo, with many urging county planning commissioners to reject the rail spur extension project but the second hearing of the San Luis Obispo County Planning Commission, held on February 25, 2016 heard from more than 20 people with comments evenly split between opponents and supporters.

Several of the supporters who work at the refinery stressed Phillips' commitment to safety and track record of “being a good neighbor.” “It is the safest company that I’ve ever worked for,” said Jerry Harshbarger, who works in purchasing. “We still have a strong demand for fossil fuels and stopping this project will not stop that demand.” Another San Luis Obispo resident said the products of gas and oil could be seen throughout the room, and urged: “We as a community should work toward how to do this.” “You drive a car and go up to the pump,” Laura Mordaunt said. “A truck is there filled with gas that is way more volatile. Your vehicle parked in your garage is far more dangerous than this process and yet you continue to drive.” For some who spoke Thursday, it is their jobs and the jobs of their loved ones on the line. “The refinery is really concerned about their ability to stay operational. That affects 200 families, We are concerned with that,” explained Vince Herrera, a Santa Maria resident who works as a Process Control Engineer at the Santa Maria Refinery. In recent hearings, Phillips 66 said if the rail project is denied, the company will deliver the oil anyway, using 100 trucks per week. Company officials say three trains per week would be safer and less disruptive.

Opponents, meanwhile, say that commissioners should not take into account the company’s safety record or personal relationships. “Their plan is an irreversible disaster,” Nipomo resident Nora Lee said. “The effects will be felt instantly with poisonous air pollution.”

The hearing is expected to be continued to March 11, where the commission could ask questions, deliberate and even make a decision — or continue the process once again to a future date.[391][392]

[edit] February 19, 2016: 'High Stakes' to Premier at Poncan Theatre on May 6

Scott Swearingen (left) and Steve Herrin Filmed the Documentary "High Stakes: The Life and Times of E. W. Marland". The documentary will premiere May 6 at The Poncan Theatre. The title for the doumentary comes from E. W. Marland's love of playing poker. After Marland struck oil in Ponca City and had begun to build his oil empire, it is said E. W. and his lieutenants and friends would spend many a night playing poker. EW, Lew Wentz, George Miller, and Bill McFadden would play poker at the Arcade Hotel until daybreak, trading gossip and oil patch rumors. Photo: Hugh Pickens

Beverly Bryant reported at Ponca City Now on February 19, 2016 that "High Stakes: The Life and Times of E. W. Marland," a documentary filmed by Scott Swearingen and Steve Herrin and funded by a grant of $100,000 from the Marland Estate Foundation will premiere May 6 at The Poncan Theatre. “The idea for this film started at a table conversation at a Historic Preservation Conference in Perry a few years ago,” said David Keathly, director of the Marland Mansion. “The project was completely funded with no city funds used. We have been working on it over a year.” Keathly said the film's debut on May 6 will be for donors, members of the Marland Estate board, and those who acted in the film. These will be the VIP celebrities for the red-carpet event. Public tickets also will be for sale and a matinee will be shown for the public following the premiere.[393]

The title for the documentary comes from E. W. Marland's love of playing poker. A first rate player, Marland learned poker as a fraternity member at the Sigma Chi fraternity house at the University of Michigan in 1891. Marland loved gambling intensely and was a fair loser and a modest winner. At Ann Arbor Marland never gave the impression of excitability while playing but was alert though silent. John Joseph Mathews recounts in his book "Life and Death of an Oilman: The Career of E.W. Marland" that one time a sharpshooter from another part of town came to the Sigma Chi house to play. Very soon he had chips piled before him on the table. Then suddenly he stood up, beamed on the others and said, "I guess I'll check out." As he raked in the money from the banker in exchange for his chips, he said with a smug smile, "The fact is, boys, I need the money." Marland showed shocked surprise on his usually unreadable face. The expression of incredulity impressed the others when the sharpshooter had gone with all the money and they bantered Marland. At each game thereafter someone at some time usually after winning a large pot would say, "The fact is, boys, I need the money."[394]

After Marland struck oil in Ponca City and had begun to build his oil empire, it is said E. W. and his lieutenants and friends would spend many a night playing poker. EW, Lew Wentz, George Miller, and Bill McFadden would play poker at the Arcade Hotel until daybreak, trading gossip and oil patch rumors. After EW struck it rich, there were hundreds of private poker parties in Ponca City every year. Sometimes these were lavish affairs at the Arcade Hotel or at some private home. Marland continued to love playing poker and played with deep concentration, except that now he could afford to lose or to win as much as seventy-five thousand dollars. When Marland built his "Palace on the Praiarie" he made sure to include a secret "Poker Room" in the first floor of the Marland Mansion, in a room next to the safe and the bootleg liquor vault.[395]

[edit] February 12, 2016: Is Warren Buffett Planning to Buy Phillips 66?

James Detar writes in Investors Business Daily that Warren Buffett’s company, Berkshire Hathaway, has been loading up on shares of Phillips 66 and now owns about 14% of the company, fueling speculation that Buffett may buy the oil refiner outright. According to S&P Global Markets Intelligence analyst Cathy Seifert investors are reminded of Buffett's transactions that led up to his $9.7 billion acquisition of lubricant and chemical maker Lubrizol in 2011. “He bought an equity stake and then bought the company,” Seifert told IBD adding that she doesn’t have knowledge of a specific plan by Buffett to buy Phillips 66, but his purchases of its stock follow a well-trodden path. “You have to think what his patterns tend to be,” Seifert said. “This move lately was an opportunity to, No. 1, diversify holdings and, No. 2, gain opportunistic exposure to the space at an attractive price. It’s a function of diversification and a long-term macro view of an opportunity to get in.”

If Buffett is planning an acquisition of Phillips 66, it would likely be among his largest takeovers ever. Phillips 66 has a market cap of $40 billion. Last month, Berkshire closed its $37.2 billion purchase of Precision Castparts, its biggest acquisition to date. Phillips 66 CEO Greg Garland was asked about the big Berkshire purchases on a Jan. 29 earnings call but only said, “We don’t comment on conversations with shareholders.” Berkshire didn’t respond to requests for comment.[396]

[edit] February 10, 2016: Phillips May Cut Production at Ponca Refinery as Phillips Dumps Crude at Cushing Below Cost

The Pipeline Monument in Cushing, Oklahoma - The Pipeline Crossroads of the World. Phillips 66 dumped crude for immediate delivery in Cushing, Oklahoma on February 10, 2016, sparking speculation that the move reflected advance warning of looming output cuts amid sluggish winter demand and record inventories. It was unclear how many barrels Phillips sold, but three traders confirmed at least two deals traded at negative $2.50 and $2.75 a barrel. "Ponca pulls crude from Cushing and likely uses Cushing tanks for storage or blending. You need somewhere to put the crude if you're cutting runs." Photo: roy.luck Wikimedia Creative Commons Attribution 2.0 Generic license

Reuters reported on February 10, 2016 that Phillips 66 dumped crude for immediate delivery in Cushing, Oklahoma on February 10, 2016, sparking speculation that the move reflected advance warning of looming output cuts amid sluggish winter demand and record inventories. It was unclear how many barrels Phillips sold, but three traders confirmed at least two deals traded at negative $2.50 and $2.75 a barrel. These deals drew notice among traders, who said the prices were distressed and the timing unusual. U.S. Energy Information Administration data on February 10, 2016 showed inventories at the Cushing, Oklahoma delivery hub hit a record 64.7 million barrels last week - just 8 million barrels shy of its theoretical limit - stoking concerns that tanks may overflow in coming weeks. According to Reuters midwest refiners ran their facilities near full tilt for much of January, averaging more than 96 percent capacity utilization compared with just under 91 percent last year, inundating the region with stocks of gasoline and distillates in what one trader described the market as a "bloodbath."

Cuts in Midwest refinery runs mean more crude oil gets shoved into storage. Cushing, Oklahoma, the delivery point for U.S. crude futures, already has a record amount of inventories, pushing oil prices near the lowest level since 2003. Sellers were discounting crude for delivery in March by as much as $2.63 a barrel compared to April, the steepest so-called one-month contango since February 2011. “It’s like this death spiral,” said Andy Lipow, president of Lipow Oil Associates LLC. “You have run cuts, crude inventories increase, the crude price gets hammered, and then the margin eventually gets restored, enabling refiners to pick up runs and convert the crude surplus into a product surplus, then you repeat the process.”

On February 9, 2016, sources said that Valero Energy Corp was planning to cut gasoline production at its 180,000 bpd Memphis, Tennessee, refinery by about 25 percent. Valero cut runs at its Memphis, Tennessee, refinery as margins weakened on rising gasoline supply, according to two people familiar with plant operations. PBF’s Toledo refinery reduced the amount of crude it’s processing to about 150,000 barrels a day, from its maximum capacity of 160,000 barrels. Sources said Delta Air Lines' Monroe Energy refinery near Philadelphia had decided to cut output by 10 percent at its 185,000 barrels per day (bpd) refinery due to economic reasons.

If Phillips 66 does cut refinery runs, it would be the third refiner to capitulate amid record gasoline inventories and negative margins. "Midwest margins turned negative after operating expenses last week and forward cracks suggest margins will remain in the doldrums for some time," said Dominic Haywood, an analyst for Energy Aspects in London. "Ponca pulls crude from Cushing and likely uses Cushing tanks for storage or blending. You need somewhere to put the crude if you're cutting runs."[397][398][399]

[edit] February 10, 2016: ValueWalk Analyzes the Relation Between ConocoPhillips' Stock Buybacks and the Dividend Cut

ConocoPhillips CEO Jim Mulva retired in June of 2012 after repurchasing approximately 20% of the company’s outstanding shares. According to 720 Global had ConocoPhillips' management and the board of directors not engaged in repurchases, COP would still have the $14.168 billion spent on buybacks since 2011, which could be used to support the $0.74 per share dividend for almost 5 years. Upon retirement Mulva received a $260 million golden parachute from the company. That was on top of $141 million in total compensation Mulva received in 2011. According to 720 Global "buybacks promote higher short-term stock prices that serve largely only to benefit [management's] own compensation. The costs of these actions are felt later as the future growth for the respective companies, employees and entire economy are robbed." Photo: by EnergyTomorrow Flickr Creative Commons. Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)

ConocoPhillips recent dividend cut from $0.74 to $0.25 per share was a jolt to many investors. On February 10, 2016 720 Global published an analysis about the hidden damage buybacks impose on shareholders and the economy as well as the questionable motives driving most of these decisions and, using ConocoPhillips as an example, writes that "buybacks promote higher short-term stock prices that serve largely only to benefit [management's] own compensation. The costs of these actions are felt later as the future growth for the respective companies, employees and entire economy are robbed."

COP consistently paid a dividend since 1990 and during that 25 year period the dividend was increased 19 times. COP has never decreased their dividend until now and even during the financial crisis of 2008/09, COP raised its dividend despite the price of crude oil dropping $100 per barrel. But since 2011, COP repurchased 251 million shares representing roughly 20% of their shares outstanding, at an approximate cost of $14.168 billion. According to 720 Global had ConocoPhillips' management and the board of directors not engaged in repurchases, COP would still have the $14.168 billion spent on buybacks since 2011, which could be used to support the $0.74 per share dividend for almost 5 years. "More importantly, the company could be in the envious position of employing the capital to buy assets that are being liquidated by other companies at cents on the dollar. Shareholders are suffering in many ways from the abuses of management in years past and will continue to do so for years to come."

"Fortunately for James Mulva, COP’s CEO during the 2011/2012 stock buyback era, his overly generous compensation is beyond COP’s ability to reclaim. Mr. Mulva retired in June of 2012 after repurchasing approximately 20% of the company’s outstanding shares. Upon retirement he received a $260 million golden parachute from the company. That was on top of $141 million in total compensation he received in 2011. The board of directors and shareholders must have been enamored with Mulva’s performance despite poor earnings trends in his final 2 years. From 2011 to 2012 the company earnings per share fell 25% from $8.97/share to $6.72/share. Had the board factored in the effect of buybacks on earnings per share when determining Mr. Mulva’s compensation, they would have realized that earnings per share were actually 40% lower at $5.37 per share."[400]

720 Global writes that this isn’t the first time Mulva put himself before the interests of others. "In January [2009], CEO James J. Mulva cut 4% of the Houston oil giant’s workforce," wrote Jena McGregor and Nanette Byrnes in Bloomberg Businessweek. "Two months later the company announced that Mulva had earned $29 million in 2008, on top of nearly $100 million he had made in the two prior years. In Bartlesville, Okla., where a chunk of the layoffs hit, many are still looking for work. The fact that Mulva took a $10 million stock grant in 2008 instead of the $38 million he got the year before hasn’t been much comfort to former employees there, some of whom lost their homes."[401]

[edit] February 9, 2015: Chevron Phillips Chemical Co. Continues to Grow in Bartlesville

The Bartlesville Examiner-Enterprise reported on February 9, 2016 that Steve Satterlee, facility and operations manager for Chevron Phillips’ Bartlesville location, told the Bartlesville Rotary Club that Chevron Phillips employees 5,000 people worldwide, with approximately 200 employees at the Research Center in west Bartlesville. In May 2015, the company held a groundbreaking at the Bartlesville facility for a new test pilot plant that will examine products before they are sent to larger facilities along the Gulf Coast. Satterlee said the pilot plant should be operational later this year. “This is a significant investment in the infrastructure in Bartlesville,” Satterlee said. “We plan on being here for a long time.” Satterlee added that the company continues to do very well and has not been greatly impacted by the dramatic drop in oil prices. “We have good assets, good partners across the world and we will always be here (in Bartlesville)."[402]

[edit] February 4, 2016: Hundreds Condemn Phillips 66's Santa Maria Rail Project in Public Hearings

Hundreds Condemn Phillips 66's Santa Maria Rail Project in Public Hearings. Hundreds of local residents and others from around California attended a public hearing to urge the San Luis Obispo County Planning Commission to reject Phillips 66 Co.’s request to receive crude oil by rail at its Santa Maria Refinery. For several hours, planning commissioners heard appeals from 83 people — a combination of residents from San Luis Obispo County, and northern and southern California, as well as elected officials — all urging they reject a proposal to build a 1.3-mile spur with five parallel tracks from the main rail line to the Nipomo Mesa refinery, an unloading facility at the refinery and on-site pipelines. Photo: Alex Chis Flickr Creative Commons Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0)

The San Luis Obispo Tribune reported on February 4, 2016 that hundreds of local residents and others from around California attended a public hearing to urge the San Luis Obispo County Planning Commission to reject Phillips 66 Co.’s request to receive crude oil by rail at its Santa Maria Refinery. For several hours, planning commissioners heard appeals from 83 people — a combination of residents from San Luis Obispo County, and northern and southern California, as well as elected officials — all urging they reject a proposal to build a 1.3-mile spur with five parallel tracks from the main rail line to the Nipomo Mesa refinery, an unloading facility at the refinery and on-site pipelines. About 390 people had grabbed speaker comment slips as of Thursday afternoon, including those who spoke that day. Public comment will continue Friday and possibly to a future date, depending on how many of the speakers turn out. None of the 83 public speakers on Thursday spoke in favor of the Phillips 66 proposal. San Luis Obispo Mayor Jan Marx was among the elected officials or their representatives who urged denial of the project. “Whether it’s five or three trains, our city would be placed at unique risk to this project,” she said.

At lunch, about 600 people from around the state rallied across the street from the hearing to protest the project. Some supporters were seen too, with green “Protect Jobs” signs, but they were far outnumbered by opponents with “Stop Oil Trains Now” posters and signs proclaiming, “We Risk, They Benefit” and “Invest in Solar.”

Representatives from Phillips 66 urged the commissioners to approve an alternate plan to allow three trains a week instead of five. “The three-train-per-week project is now our proposed project,” said Jocelyn Thompson of Alston & Bird LLP. It “eliminates all of the Class 1 impacts with respect to onsite activities,” she added, referring to the highest level of negative impacts to air quality and biological resources referenced in the project’s final Environmental Impact Report. The county staff report states that three trains a week — or 150 a year — would reduce the significant toxic air emissions to no longer be considered a “Class 1 significant impact.” However, the county’s planning staff said other significant impacts still would harm the environment even with three trains per week rather than five: construction of the facilities would still disturb environmentally sensitive habitat, and emissions of diesel particulate matter would still remain a “Class 1” impact.

Thompson added that if the project is denied, crude oil will still come into California by rail and eventually reach the refinery, albeit by a different route: Oil would arrive in the Central Valley by train and then be trucked about 110 miles through San Luis Obispo County to Santa Maria, where it would be pumped into a pipeline and sent to the refinery. “It’s impermissible for you to say that you’re going to deny the project because there’s a train on the tracks,” she said. “The train will come to the San Joaquin Valley and you will be dealing with trucks.”

When asked during a break if layoffs could happen if the project is denied, Phillips 66 spokesman Dennis Nuss said, “We’re going to wait and see what is going to happen with the process.”[403]

According to the Santa Barbara Independent, two days before the hearing started, Phillip 66 attorneys proposed to reduce the number of trains unloaded per week from five to three (or 250 trains per year to 150). This alternative would decrease the toxic air emissions impact by lowering the cancer risk to just below SLO’s Air Pollution Control District’s threshold, according to county staff. Other environmental impacts, however, remain a concern. Public interest in the project is so great that planning commission chair Don Campbell decided to hold a third hearing date for continued public testimony and staff presentations on February 25. (The commission is expected to continue the meeting on March 11.) So far, nearly 25,000 written comments have been submitted. Of those, just 150 support the project.[404]

[edit] February 3, 2016: ConocoPhillips Posts Big Loss, Slashes Dividend

ConocoPhillips Posts Big Loss, Slashes Dividend. ConocoPhillips slashed its quarterly dividend from $0.74 to $0.25 and posted an adjusted earnings-per-share loss of $0.65 for the fourth quarter as the company's net loss widened to $3.5 billion, or $2.78 per share, in the fourth quarter ended December 31. "While we don't know how far commodity prices will fall, or the duration of the downturn, we believe it's prudent to plan for lower prices for a longer period of time. The actions we have announced will improve net cash flow by $4.4 billion in 2016," said ConocoPhillips CEO Ryan Lance. "The decision to reduce the dividend was a difficult one." Photo: Wikimedia Andrew Filer from Seattle (ex-Minneapolis)

Business Insider reported on February 3, 2016 that ConocoPhillips slashed its quarterly dividend from $0.74 to $0.25 and posted an adjusted earnings-per-share loss of $0.65 for the fourth quarter. "While we don't know how far commodity prices will fall, or the duration of the downturn, we believe it's prudent to plan for lower prices for a longer period of time. The actions we have announced will improve net cash flow by $4.4 billion in 2016," said ConocoPhillips CEO Ryan Lance. "The decision to reduce the dividend was a difficult one. The dividend has been, and will continue to be, a top priority. We still intend to provide a competitive dividend, while significantly lowering the breakeven price for the company and substantially reducing the level of borrowing in 2016."[405]

The company's net loss widened to $3.5 billion, or $2.78 per share, in the fourth quarter ended Dec.31, from $39 million, or 3 cents per share, a year earlier. Excluding a $2.7 billion non-cash impairment charge and other items, loss was 90 cents per share, bigger than the average analyst estimate of 65 cents, according to Thomson Reuters I/B/E/S. ConocoPhillips lowered its 2016 capital expenditure target by 17 percent to $6.4 billion, and its operating cost forecast by 9 percent to $7 billion.[406]

[edit] February 3, 2016: Ponca City ConocoPhillips Retired Employees to Meet At Pioneer Technology Center

The Ponca City News reported on February 3, 2016 that all local Conoco, ConocoPhillips and Phillips 66 retirees are encouraged to attend the upcoming general meeting of the ConocoPhillips Retiree Association on February 8, 2016 at Pioneer Technology Center. Andy Wachtel, CEO of the AllianceHealth hospitals in Ponca City and Blackwell will talk about the local hospitals as well as discuss how some of the national trends in health care impact the hospital industry and retirees as health care consumers.[407]

[edit] January 29, 2016: Ponca Refinery Earns $42 Million for Phillips 66 in Q4, Continues in Top Slot as Phillips' Most Profitable Refinery

Phillips 66 reported their fourth quarter earnings for 2015 on January 29, 2016 and the results of analysis of earnings for Phillips' Refining Business Segment show Ponca Refinery continues as the most profitable of Phillips' fifteen worldwide refineries. Ponca Refinery earned $42 million for Phillips in the fourth quarter of 2015 for an annualized profit of $166 million. Phillips' Sweeney Refinery in Old Ocean, TX and Alliance Refinery in Belle Chasse, LA tied as the second most profitable refineries with $39 million in earnings for an annualized profit of $157 million. The annualized profit of Phillips 66's five most profitable refineries for the fourth quarter of 2015 are:[408]

See Appendix 4 for detailed calculations:

[edit] January 29, 2016: After 40 Year Ban, US Starts Exporting Crude Oil

CNN reported on January 29, 2016 that just weeks after Congress lifted a 40-year ban on exporting oil, the first shipments of the black stuff left U.S. ports for Europe. "The fact that producers have free access to the global market will make it easier for U.S. supply to respond to disruptions around the world," said Jason Borduff, a former energy adviser to President Obama who is currently a professor at Columbia University. There are also logistical hurdles keeping U.S. oil from straying too far from home. Due to the longstanding export ban, America's Gulf Coast doesn't currently have the equipment in place needed to load the giant supertankers that other countries typically use to ship oil long distances, according to Nilofar Saidi, a crude oil market analyst at ClipperData. Smaller ships can be used on voyages to Latin America and Europe, but aren't ideal for far-flung places like East Asia. "Given the market situation today, there's going to be caution about large-scale infrastructure investments," Borduff said. U.S. refiners have spent heavily on upgrades in recent years that allow them to process the ultra-light crude being pumped from U.S. shale fields. That means it probably makes more economic sense to leave American oil at home for now.[409]

The American Journal of Transportation reported on September 9, 2015 that Phillips 66’s investments in storage and pipeline infrastructure in southeastern Texas give the company an “option on exports” should the decades-old domestic crude export ban be lifted, Chief Executive Officer Greg Garland told analysts. “I do think people will make investments to support export infrastructure and we want to do that too,” Garlands aid during a webcast presentation at the Barclays CEO Energy-Power conference in New York. In 2014 Phillips 66 acquired a 7.1 million barrel crude and refined products terminal in Beaumont, Texas, that Garland said was “really an option on crude exports.” The terminal has two Aframax-capable docks and a barge dock. It also has rail and truck offloading facilities. Phillips is a 25 percent partner in two Energy Transfer Partners pipeline projects that aim to move North Dakota Bakken and Canadian heavy crude to Sunoco Logistics Partners’ storage terminal in nearby Nederland by late 2016.[410]

Reuters reported on April 11, 2014 that after securing an export license in 2013, Phillips is now exporting oil to Canada. A Phillipsspokesman declined to say where in Canada its exports are headed and in what volume and did not disclose if the oil will reach its destination via rail or barges. "As a matter of practice, Phillips 66 does not comment on commercial activity," said spokesman Dennis Nuss. The United States does not allow exports of its own oil, but makes exceptions such as barrels going to Canada and re-exports of foreign oil.[411]

[edit] January 26, 2016: Phillips 66 Helps City of Wood River Pump Water After Flooding at Illinois 143

The Riverbender reported on January 26, 2016 that during the post-Christmas torrential rains, water flowed near Wood River over the area at Illinois 143 near Illinois Route 255 and caused it to be closed for two-plus weeks. City Manager Jim Schneider says Phillips 66 helped immensely with the water situation. “Melissa [Erker] called me and asked how Phillips 66 could help and they sent a crew over there with pumps for a few days,” said Schneider. “Our city employees and IDOT also did a good job working with the area. Without Phillips 66 assisting, the water would have been over the road for more days," Schneider added. The city manager is hopeful that Phillips 66 and IDOT both will work with the city to find a permanent solution to the problem with water spilling out to the road on both sides of Illinois 143 near Illinois 255.[412]

[edit] January 25, 2016: Phillips Reports Excess Emissions at Ponca City Refinery

Phillips on January 25 reported excess carbon monoxide from the crude topping unit feed heater, according to a filing with the Oklahoma Department of Environmental Quality.[413]

[edit] January 25, 2016: San Luis Obispo County Department of Planning Recommends Denial of Phillips 66 Rail Project at Santa Maria Refinery

Phillips 66's Santa Maria Refinery. The San Luis Obispo County Department of Planning and Building is recommending to planning commissioners that they deny a proposal by Phillips 66 to bring in crude oil to its Santa Maria Refinery by rail. According to the staff report the project would be detrimental to health, safety and welfare of the public, it includes significant and unavoidable environmental impacts including a cancer risk to nearby residents, and it has no benefits that outweigh the risk to the environment Photo by 350.org Flicker Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

KSBY reported on January 25, 2016 that the San Luis Obispo County Department of Planning and Building is recommending to planning commissioners that they deny a proposal by Phillips 66 to bring in crude oil to its Santa Maria Refinery by rail. According to the staff report the project would be detrimental to health, safety and welfare of the public, it includes significant and unavoidable environmental impacts including a cancer risk to nearby residents, and it has no benefits that outweigh the risk to the environment.[414]

According to the staff report from the San Luis Obispo County Department of Planning and Building: "Significant local, regional, and statewide concern has been expressed throughout the various phases of the Project including land use incompatibilities, toxic air emissions adjacent to the project site and adjacent to the UPRR mainline; risk of derailment, spill, and explosion in areas adjacent to the mainline; threat of impact to agricultural, biological, cultural, and water resources due to spill, fire, and explosion along the mainline; and, inadequate fire and emergency response services along UPRR mainline throughout the state in the event of a spill, fire or explosion. The Final Environmental Impact Report (FEIR) concluded that the Project, for components only on the project site, would result in two significant and unavoidable impacts (Class I impacts) stemming from diesel particulate matter emissions and toxic air emissions generated by increased locomotive activity at the Santa Maria Refinery site."[415]

The recommendation comes a week before a public hearing February 4-5 on whether to grant permits allowing the company to build the 41,000 barrels per day project first proposed in 2013. Phillips proposed the rail project because California oil output is shrinking and the company wanted another source of crude. The company had hoped to start up in 2014, but environmental reviews pushed final consideration of permits to 2015 and then this year. "We understand that there are concerns about the project and we look forward to addressing questions" in the review, said Phillips spokesman Dennis Nuss.[416]

[edit] January 24, 2016: Borger Refinery to Produce Above Average Emissions Over the Next Month

Nasdaq reported on January 24, 2016 that Phillips 66's Borger Refinery will emit above-average emissions starting January 24, 2016 due to scheduled maintenance. "Unit 40 FCCU (Fluid Catalytic Cracking Unit) Electrostatic Precipitator (ESP) is scheduled for maintenance," the refinery said in a filing with the Texas Commission on Environmental Quality. "The FCCU is not scheduled to go down. During maintenance there may be high opacity and particulates released from the stack." Excess emissions could occur over the next month until February 24, 2016.[417]

[edit] January 15, 2016: Phillips 66 Fined $324,000 for Safety Violations at Ferndale Refinery

The Bellingham Herald reported on January 14, 2015 that Phillips 66 was hit with a $324,000 fine by the state of Washington for workplace violations regarding fire and hazardous chemical safety at Ferndale Refinery. The refinery received the fine for violations that took place in 2014 and were not corrected, according to a news release from the Washington State Department of Labor & Industries. The 2014 citations are under appeal, but state law requires employers to correct hazards even if the violations are under appeal, according to L&I. The refinery was cited for three violations, each carrying a $108,000 fine.

Two violations involve the refinery’s firefighting and fire suppression systems. According to the state agency, Phillips 66 did not inspect or follow recognized and generally accepted engineering practices for the firefighting water tank or the buried firefighting water distribution piping. The company also failed to address the potential loss of firefighting water, according to the report.

The third violation involves not consulting industry material before writing a policy about chemical piping. Following the company’s policies potentially allowed workers to be exposed to hydrogen sulfide, a poisonous gas, and explosive flammable hydrocarbon vapors at much higher concentrations than considered safe. Employers in high-hazard chemical industries are expected to make sure that their internal policies and guidelines reflect current good engineering practices across those industries and that they meet local regulations, which may be stricter than national regulations.

Phillips 66 Ferndale Refinery spokesman Jeff Callender said company officials were disappointed by the announcement from the agency and believe there is a misunderstanding related to the citations. They plan to continue to work cooperatively with the agency through the appeals process. “The safety of the community, the environment and our people are of the utmost importance to our company and these priorities guide our efforts in everything we do,” said Callender.[418][419]

[edit] January 14, 2016: Analysts Say ConocoPhillips Ain't What It Used To Be

ConocoPhillips and Phillips 66 Stock Prices since their Split in 2012. As ConocoPhillips and Phillips 66 come up on the fourth anniversary of the separation of the original ConocoPhillips into an upstream company (ConocoPhillips) and a downstream company (Phillips 66), the fortunes of the two companies couldn't be more different. The stock price for PSX has risen 162% since the split while COP has fallen 22%. Click on graphic to expand. Chart: Hugh Pickens.

As ConocoPhillips and Phillips 66 come up on the fourth anniversary of the separation of the original ConocoPhillips into an upstream company (ConocoPhillips) and a downstream company (Phillips 66), "The Traveling Investor (TTI)" wrote at Seeking Alpha on January 14, 2016 that the fortunes of the two companies couldn't be more different. "With oil prices down the drain, it's not surprising to see ConocoPhillips' stock tank by more than 50% from its 2014 high," writes TTI. "It is apparent that the spin off created value for pre-spin off shareholders, as Phillips 66's stock has since more than doubled and ConocoPhillips's shares increased by more than 50% before the collapse of oil. Investors that held on to both companies would have done fairly well. However, those who only holds ConocoPhillips shares today no longer benefit from the safety of an integrated company." According to TTI, today's ConocoPhillips is susceptible to macro movements that plague every other exploration and production oil company. However, the management has not made enough changes after the spin-off to ensure that the company can safely withstand the volatility of the commodity market.[420]

According to "Foundation Investing (FI)", things could get worse for ConocoPhillips and there is a a good chance that the dividend will be cut. "The downside of this split is that it made the company vulnerable to falling oil prices. Integrated oil companies benefit from their downstream businesses because refiners see higher profits when the price of oil falls, acting as a kind of hedge on lower energy prices," writes FI. "ConocoPhillips currently has roughly $25 billion in debt, up $2.5 billion year over year. Moody's recently put the company's debt on review for downgrade, citing weak conditions and impaired cash flows. There comes a point when a company is confronted with the choice of either cutting its cash distributions or causing possible long-term and irreparable damage to its business - and that moment is not far off for ConocoPhillips."[421]

[edit] January 8, 2016: Phillips 66 Makes a Difference in STEM Education in Ponca City Classrooms

Ponca City High School. Phillips 66 has made a donation to purchase science equipment to support environmental science at East and West Middle Schools and for student supplies to be used during their “Engage” projects to support their future reading skills, creative thinking, collaboration, critical thinking, integration of technology, global competence and problem solving. “The Ponca City School district is very appreciative of the monetary support we receive from Phillips 66,” said Barbara Cusick, Executive Director of Curriculum for the Ponca City Public School district. “Teachers and students have more opportunities due to the generosity of Phillips 66 and its employees, serving as mentors to the students.” Photo: Hugh Pickens.

The Ponca City News reported on January 8, 2016 that Phillips 66 has made a donation to purchase science equipment to support environmental science at East and West Middle Schools and for student supplies to be used during their “Engage” projects to support students' future reading skills, creative thinking, collaboration, critical thinking, integration of technology, global competence and problem solving.

The donation is also being used to help fund the Robotics program at Ponca City High School. "Ken York and Ed Latimer have kept the program going as they teach the students the concepts of programming and engineering. Some of our newer mentors, Adam Riggs and Chance Randall, are actually graduates of the program and are working or continuing their education in STEM fields," says Linda Broome, the sponsor for Robotics at the high school. "Our plan for the new money from Phillips 66 is to remodel our lab, to begin paying our mentors as lay coaches, and to expand our program into the middle schools. We are very thankful for Phillips 66 and their support of this program.”

“The Ponca City School district is very appreciative of the monetary support we receive from Phillips 66,” said Barbara Cusick, Executive Director of Curriculum for the Ponca City Public School district. “Teachers and students have more opportunities due to the generosity of Phillips 66 and its employees, serving as mentors to the students.”[422]

"We have to have exemplary schools in our communities so that our employees choose to live in those communities," said Phillips 66 CEO Greg Garland in 2014. "We want to make sure they have good options. We are particularly interested in encouraging students. We want them to finish school, get their high school degree and go on to college, if that is what they want to do. We want them to be interested in science, technology, engineering and math.”[423]

[edit] January 6, 2016: Ferndale Refinery to Reduce Emissions Five Percent Annually Under New State Rules

Phillips 66's Ferndale Refinery. Washington state’s largest industrial emitters would be required to reduce carbon emissions by 5 percent every three years, under a proposed rule from the Department of Ecology. Phillips 66's Ferndale likely would be included in the first wave of facilities required to meet the reductions under the rule, as would Puget Sound Energy’s generating stations at Ferndale and Sumas. The proposed rule’s starting thresholds are based on average emissions from 2012 to 2015. “It’s important that we act now to protect our water supplies, infrastructure and economy for future generations,” said Ecology Director Maia Bellon. The agency has scheduled four public hearings. It expects to finalize a rule by summer. Photo by The Center for Land Use Interpretation

The Bellingham Herald reported on January 6, 2016 that Washington state’s largest industrial emitters would be required to reduce carbon emissions by 5 percent every three years, under a proposed rule from the Department of Ecology. Phillips 66's Ferndale likely would be included in the first wave of facilities required to meet the reductions under the rule, as would Puget Sound Energy’s generating stations at Ferndale and Sumas. The proposed rule’s starting thresholds are based on average emissions from 2012 to 2015. “It’s important that we act now to protect our water supplies, infrastructure and economy for future generations,” said Ecology Director Maia Bellon. The agency has scheduled four public hearings. It expects to finalize a rule by summer.[424]

[edit] January 6, 2016: Borger Refinery to Emit Excess Gases Above Permit Level

Nasdaq reported on January 6, 2016 that Phillips 66's Borger Refinery will emit excess gases for six hours or less as it undergoes a maintenance procedure. "Unit 40 Boiler is scheduled to switch from the Electric Driven FD Fan to the Turbine Driven FD Fan," said a filing to the Texas Commission on Environmental Quality. "During the switch the emissions are projected to be above the permit limit."[425]

[edit] December 30, 2015: Spectra Energy Shuts Platte Pipeline to Wood River Refinery because of Flooding

The St. Louis Post-Dispatch reported on December 30, 2015 that Spectra Energy has shut its Platte pipeline which connects to the Wood River Refinery in the Metro East due to flooding along the Mississippi River. The pipeline is the second crude system delivering into the Wood River Refinery to shut as a result of flooding following severe weather throughout parts of the Midwest. Enbridge previously confirmed its 200,000 barrel-per-day Ozark pipeline, which runs from Cushing, Okla., to Wood River, shut due to the flooding.[426]

[edit] December 28, 2015: Power Outage at Refined Products Distribution Rack at Ponca Refinery

Reuters reported on December 28, 2015 that storms caused a power outage at Phillips Refined Products Distribution Rack at Ponca Refinery and the company has not yet provided a timeline for a return to normal operations according to a source familiar with the matter.[427]

[edit] December 28, 2015: Phillips Reports Excess Carbon Monoxide at Ponca Refinery

On December 28, Phillips Corp reported excess carbon monoxide emissions and unit upsets due to power blips during a winter storm at its Ponca City, Oklahoma refinery, according to a filing with the Oklahoma Department of Environmental Quality that was made public on Wednesday. [428]

[edit] December 28, 2015: Phillips Reports Emissions at Ponca City Refinery

Phillips reported excess carbon monoxide from the fluid catalytic cracking unit regenerator on December 28 and excess carbon monoxide from a reactor preheater on December 30 at its Ponca City, Oklahoma refinery.[429]

[edit] December 25, 2015: Phillips Donates $15,000 to Northern Oklahoma College, $1.7 Million to Bartlesville Public Schools

Northern Oklahoma College is Located in Tonkawa, Oklahoma. On December 25, 2015 Phillips 66's Ponca Refinery donated $15,000 to the Northern Oklahoma College Foundation for financial support of the Process Technology (PTEC) Program at Northern Oklahoma College (NOC} located in Tonkawa, Oklahoma. The program support is to enhance the curriculum and to provide “hands-on” experience for the students in preparation for work in operations. On August 13, 2014, Phillips 66 CEO Greg Garland announced a grant to Bartlesville Public Schools of $1.7 million, over 100 times the amount donated to Northern Oklahoma College, to build Phillips 66 Innovation Labs at Bartlesville High School, Madison Middle School and Central Middle School. The labs are intended to enhance education in science, technology, engineering and math (STEM) for students in Bartlesville, Oklahoma. "We have to have exemplary schools in our communities so that our employees choose to live in those communities. We want to make sure they have good options. We are particularly interested in encouraging students. We want them to finish school, get their high school degree and go on to college, if that is what they want to do. We want them to be interested in science, technology, engineering and math," said Garland. Photo: Wesley Fryer. Flickr Creative Commons Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0)

The Ponca City News reported on December 25, 2015 that the Phillips 66's Ponca Refinery donated $15,000 to the Northern Oklahoma College Foundation for financial support of the Process Technology (PTEC) Program at Northern Oklahoma College (NOC} located in Tonkawa, Oklahoma. The program support is to enhance the curriculum and to provide “hands-on” experience for the students in preparation for work in operations. "The Foundation greatly appreciates the generous Phillips 66 donation," said Sheri Snyder, NOC vice president for development and executive director for the NOC Foundation. “Our longtime partnership has provided many educational opportunities that continue to enrich the lives of NOC students. Tim Seidel, Ponca City refinery manager presented the donation to NOC president Dr. Cheryl Evans.[430]

On August 13, 2014, Phillips 66 CEO Greg Garland announced a grant to Bartlesville Public Schools of $1.7 million, over 100 times the amount donated to Northern Oklahoma College, to build Phillips 66 Innovation Labs at Bartlesville High School, Madison Middle School and Central Middle School. The labs are intended to enhance local education in science, technology, engineering and math (STEM). Garland said that the donation is just one way Phillips 66 can demonstrate its commitment to Bartlesville and the employee base here. “Bartlesville is so unique. You have such a cadre of highly-educated people here in this town that are willing to go back (to the schools), and I think the STEM labs will create opportunities for people to go in there and encourage people in science, technology, engineering and math,” Garland told the Bartlesville Examiner-Enterprise. “I think that education is one of the keys. We have to have exemplary schools in our communities so that our employees choose to live in those communities. We want to make sure they have good options. We are particularly interested in encouraging students. We want them to finish school, get their high school degree and go on to college, if that is what they want to do. We want them to be interested in science, technology, engineering and math.”[431]

On August 13, 2015 Ponca City resident Hugh Pickens spoke with Phillips 66 Chief Executive Officer Greg Garland after a forum in Bartlesville sponsored by the Bartlesville Chamber of Commerce and asked Garland what it would take for Ponca City to qualify for a grant from Phillips 66 to promote science in the Ponca City School System, like the grant of $1.7 million that Phillips 66 gave to Bartlesville Public Schools in 2014 to create new innovative laboratories on three school campuses in Bartlesville to support science, technology, engineering and math. Garland responded that he would look into the matter.[432]

[edit] December 21, 2015: Emergency Responders Extinguish Fire at Ferndale Refinery

Reuters reported on December 21, 23015 that a fire occurred at Phillips 66's refinery in Ferndale, Washington. "Emergency responders from Phillips 66 immediately extinguished the fire. There were no injuries and the incident is under investigation," a spokesperson for Phillips 66 said. The company did not say whether the fire had impacted operations, or which units were impacted by the fire.[433]

[edit] December 16, 2015: Phillips Donates $30,000 to Billings Museum

The Billings Gazette reported on December 16, 2015 that Phillips 66 Pipeline donated $30,000 to the Wise Wonders Children's Museum in Billings to improve and expand the downtown space. "We are so excited to get underway with renovations to provide improved facilities and programming," said Kelli Toohill, the museum's executive director. The project will add a multi-use classroom, additional work and exhibition space, and an ADA-accessible family bathroom. The donation will increase the museum space by 50 percent.[434]

[edit] December 16, 2015: Phillips Billings Refinery Donates $80,000 to Billings Park

The Billings Gazette reported on December 16, 2015 that the Phillips Refinery in Billings donated $80,000 to the Yellowstone Kelly project to enhance a popular park and honor U.S. veteran Luther Sage “Yellowstone” Kelly, U.S. Army scout and soldier, who died 87 years ago at his ranch in Paradise, California and was a close friend of President Theodore Roosevelt and Gen. Nelson Miles. The plan is to erect a historical interpretive panels, seating, walking trails and a paved turnaround big enough to accommodate buses. The Yellowstone Kelly project would make this forlorn site a gem of the city park system. Deputy Mayor Jani McCall noted at the Phillips 66 celebration that Swords Park averages about 170,000 visitors annually. In addition to Kelly’s grave, the park is rich in history. The Rims were used by Native Americans and later Boothill Cemetery was situated below the cliffs.[435]

[edit] December 15, 2015: Ferndale Refinery Donates $700,000 for Phillips 66 Soccer Park

Phillips 66 Soccer Field in Ferndale, Washington. Phillips 66 Ferndale Refinery is donating $700,000, the largest known gift the Ferndale refinery has made in Whatcom County, for two new artificial turf fields, lights and a scoreboard for Northwest Soccer Park in Bellingham, Washington. The gift comes with an agreement that includes renaming the facility Phillips 66 Soccer Park. This rendering from Zervas architects shows the two lighted turf fields planned near the concession area at Northwest Soccer Park. Whatcom Sports & Recreation Courtesy to The Bellingham Herald

The Bellingham Herald reported on December 15, 2015 that Phillips 66 Ferndale Refinery is donating $700,000, the largest known gift the Ferndale refinery has made in Whatcom County, for two new artificial turf fields, lights and a scoreboard for Northwest Soccer Park in Bellingham, Washington. The gift comes with an agreement that includes renaming the facility Phillips 66 Soccer Park. Funding for the project was put together over the course of a few years. Phillips 66 was motivated to make its large donation because the project improves the community, said Rich Harbison, Phillip 66’s Ferndale refinery manager. The company said previous work with Whatcom Sports and Recreation were positive experiences. “It gave us confidence that they could hit the goals they set for this project,” Harbison said. The first soccer fields were installed in the late 1980s when the county began renting the area to what was then the Whatcom Soccer Commission. Participation grew about 15 percent a year, so the soccer organization added fields, hitting its current size about 15 years ago, said Chet Lackey, who is on the board of Whatcom Sports & Recreation. The nonprofit organization also operates Bellingham Sportsplex and Civic Complex.[436]

[edit] December 15, 2015: Phillips Makes Major Upgrade to Billings Refinery

Phillips 66 Billings Refinery. Phillips 66 is spending several hundred million dollars on improvements to its Billings refinery on the "Vacuum Improvement Project" which will allow the refinery to process more heavy Canadian crude oil. The project, which employs an average of 200 construction workers and will peak at 350, will continue into 2017. The refinery will continue to operate throughout the construction period and the project will not increase the refinery's capacity. Photo by jonmartin Flicker Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

The Helena Independent Record reported on December 15, 2015 that Phillips 66 is spending several hundred million dollars on improvements to its Billings refinery on the "Vacuum Improvement Project" which will allow the refinery to process more heavy Canadian crude oil. The project, which employs an average of 200 construction workers and will peak at 350, will continue into 2017. The refinery will continue to operate throughout the construction period and the project will not increase the refinery's capacity.

“The Billings refinery currently processes a mixture of Canadian heavy, high-sulfur crude oil plus domestic high-sulfur and low-sulfur crude oils, all delivered by pipeline and truck. This project will allow us to handle up to 100 percent heavy Canadian crude,” Phillips 66 officials said. "While it’s technically possible for us to run Bakken crude oil, it is unlikely given the economics."[437]

The Billings Refinery has a crude oil processing capacity of 58 MBD and processes a mixture of Canadian heavy, high-sulfur crude oil plus domestic high-sulfur and low-sulfur crude oil, all delivered by pipeline. Its facilities include fluid catalytic cracking and hydrodesulfurization units. A delayed coker converts heavy, high-sulfur residue into higher-value light oils. The refinery produces a high percentage of transportation fuels, such as gasoline, aviation and diesel fuels, as well as fuel-grade petroleum coke.

[edit] December 11, 2015: Deal to End Oil Export Ban in Sight

The Hill reported on December 11, 2015 that an end to the ban on U.S. crude oil exports appears increasingly likely to be included in the sweeping fiscal deal being negotiated in Congress. Lifting the decades-old export ban has been a top energy priority for Republicans for more than a year, and the GOP is eyeing the must-pass government funding and tax policy bills as prime places to address the issue. “It clearly is an item that [Senate Majority Leader Mitch] McConnell and Republicans are salivating over,” Senate Minority Whip Dick Durbin (D-Ill.) told The Huffington Post. “It would be a windfall to the industry. We don’t know how much some have estimated — $20 [billion], $30 billion a year in profits if they are allowed to do this.” Sen. Barbara Mikulski (Md.), top Democrat on the Appropriations Committee, called the GOP’s latest offer and its oil exports provision “lavish.” Rep. Nita Lowey (D-N.Y.), Mikulski’s House counterpart, said she’d be willing to accept oil exports only if “everything that’s bad, all the poison pills” were taken out of the spending bill, including restrictions on Syrian refugees and on financial regulations.[438]

When asked about their position on the end to the oil export ban by Hugh Pickens in town hall meetings in Ponca City, both Oklahoma Senator James Lankford and US Congressman Frank Lucas said they were strong supporters of the campaign to end the ban.

Oklahoma Senator James Lankford held a one hour a town hall meeting at the Ponca City Civic Center on September 1, 2015 that was attended by over 110 Ponca City citizens. After discussing the Iran Nuclear Deal, the federal deficit, defense spending, and the presidential race, Lankford took questions from the audience.[439] The first question was from Hugh Pickens who asked Senator Lankford about his position on the lifting of the ban on the export of crude oil from the United States. "The Ponca City Refinery is the largest refiner in Oklahoma and the refinery here in Ponca City is the most profitable and best run of Phillip 66's fifteen worldwide refineries," said Pickens. "Where do you stand on lifting the 40-year ban on the export of crude oil from the United States?" Senator Lankford noted that there were only two countries in the world where there was a ban on the export of crude oil. One of them is Iran and the other is the United States said Lankford. Lankford said he was in favor of free markets and he thought that lifting the ban would be beneficial to the United States. Senator Lankford said he planned to vote in favor of lifting the ban on the export of crude oil.

US Congressman Frank Lucas held a town hall meeting in the Civic Center of Ponca City on August 28, 2015 to discuss issues with interested citizens. Lucas discussed the Iran Nuclear deal, the budget deficit, and the presidential race and then took questions from the audience.[440] The first question was from Hugh Pickens who asked Congressman Lucas where he stood on the question of lifting the ban on the export of crude oil from the United States. Congressman Lucas said that he was strongly in favor of lifting the ban, that he expected the bill to come before Congress later this year, and that he would vote in favor of lifting the ban.

[edit] December 8, 2015: Sweeny Fractionator One Is Now Operational

Businesswire reported on December 8, 2015 that Phillips 66 has begun operations at its new 100,000 barrels-per-day (BPD) natural gas liquids (NGL) fractionator located at the company's Sweeny Complex in Old Ocean, Texas. Sweeny Fractionator One supplies purity ethane and liquefied petroleum gases (LPG) to the petrochemical industry and heating markets. “The startup of Sweeny Fractionator One is a significant milestone in the growth of our Midstream business,” said Bob Herman, executive vice president, Midstream for Phillips 66. “We plan to add more capacity in the future to supply our customers LPGs based on affordable North American natural gas liquids.” Sweeny Fractionator One and the Freeport LPG Export Terminal represent a combined capital investment of more than $3 billion. The new assets are creating more than 70 full-time jobs in addition to 5,500 construction jobs.[441]

[edit] December 4, 2015: T. Boone Pickens Says He Could Have Taken Over Phillips 66 in 1984

T. Boone Pickens and Carl Icahn. T. Boone Pickens, in a podcast with Carl Icahn, says he recently met with all his old advisors and they determined he could have taken over Phillips 66 in 1984 if he hadn’t been so afraid of running a proxy fight at the time. Pickens made his name fighting oil companies where he argued the stocks were undervalued compared to the oil they had in the ground. One of Pickens' biggest targets was Phillips Petroleum. After Pickens made a takeover bid for Phillips 66, Phillips eventually bought Pickens' stock back and announced a restructuring that benefited Phillips stockholders.

David Benoit reported on December 4, 2015 at the Wall Street Journal that T. Boone Pickens, in a podcast with Carl Icahn, says he recently met with all his old advisors and they determined he could have taken over Phillips 66 in 1984 if he hadn’t been so afraid of running a proxy fight at the time. Pickens made his name fighting oil companies where he argued the stocks were undervalued compared to the oil they had in the ground. One of Pickens' biggest targets was Phillips Petroleum. After Pickens made a takeover bid for Phillips 66, Phillips eventually bought Pickens' stock back and announced a restructuring that benefited Phillips stockholders.[442]

Residents of Bartlesville, especially those with employment ties to Phillips Petroleum in the 1980s, recall the hostile takeover bid engineered by Pickens to wrest away control of the company, beginning on Dec. 5, 1984. At that time, Phillips Petroleum was the 10th largest oil company in the nation, with $15 billion in revenues and 29,000 employees worldwide. The community, wholeheartedly supporting “its” company, rallied with citywide rallies, prayer groups, defiant T-shirts and mail campaigns in what became known as the Battle of Bartlesville. Among the fastest-selling Christmas gifts sold locally was a T-shirt emblazoned with a “Boone Busters” slogan and the likeness of Pickens popping up from behind a red circle and slash, much like trademark symbol of the popular movie, “Ghostbusters.” In response to the takeover threat, Phillips’ top management flew to New York in early December to begin round-the-clock meetings with lawyers and other experts who specialized in fending off corporate raiders. Heading the team was Phillips chairman William Douce, president Pete Silas and Glenn Cox, chief financial officer. Just before Christmas on Dec. 23, Phillips announced a major recapitalization program designed to bring maximum benefit to shareholders, particularly Pickens.[443]

[edit] November 18, 2015: Phillips 66 Annually Spends $9 Million with Ponca City Diversity Suppliers

The Ponca City News reported on November 18, 2015 that Phillips 66 estimates that Ponca City and area diversity suppliers, through their contract work with Phillips 66, bring more than $9 million into the local economy helping to create and preserve jobs and generate a more stable tax base. According to Tim Mitchell of Northwest Eath Institutes's Choices for Sustainable Living, "a dollar spent at a locally owned store is usuallly spent 6 to 15 times before it leaves the community. From $1, you create $5 to $14 in value within that community."[444]

[edit] November 16, 2015: Bartlesville High School Holds Open House for $1.7 Million Phillips 66 Innovation Labs

Bartlesville High School Holds Open House for $1.7 Million Phillips 66 Innovation Labs. On August 13, 2015 Ponca City resident Hugh Pickens spoke with Phillips 66 Chief Executive Officer Greg Garland after a forum in Bartlesville sponsored by the Bartlesville Chamber of Commerce and asked Garland what it would take for Ponca City to qualify for a grant from Phillips 66 to promote science in the Ponca City School System, like the grant of $1.7 million that Phillips 66 gave to Bartlesville Public Schools in 2014 to create new innovative laboratories on three school campuses in Bartlesville to support science, technology, engineering and math. Garland responded that he would look into the matter. Photo: Granger Meador Flickr Creative Commons

The Bartlesville Examiner-Enterprise reported on November 16, 2015 that Bartlesville High School held an open house on November 14, 2015 giving Bartlesville residents the chance to see first hand the results of a multimillion dollar expansion of the campus at Bartlesville High School. According to Nathan Thompson, one of the crowning achievements is the Phillips 66 Innovation Labs made possible by a $1.7 million grant from Phillips 66.

BHS sophomore Lukas Cochran said the Innovation Lab will stimulate interest in science, technology and mathematics. “I love it. I like the physical examples. Taking something that you can visualize in your head and figuring out the math behind it,” he said. Cochran said he plans to pursue a career in engineering.

The lab has allowed the high school to add research, computer science and chemistry classes, said Superintendent Dr. Gary Quinn. “Our students can now do their science fair projects in a space that’s designed for that,” he said. Quinn said the administration plans to connect with company employees and retirees to mentor the BHS students. “It will help them to be able to grow even more. … It’s a very exciting thing that we think sets our school district apart from other school districts,” Quinn said.[445]

On August 13, 2015 Ponca City resident Hugh Pickens spoke with Phillips 66 Chief Executive Officer Greg Garland after a forum in Bartlesville sponsored by the Bartlesville Chamber of Commerce and asked Garland what it would take for Ponca City to qualify for a grant from Phillips 66 to promote science in the Ponca City School System, like the grant of $1.7 million that Phillips 66 gave to Bartlesville Public Schools in 2014 to create new innovative laboratories on three school campuses in Bartlesville to support science, technology, engineering and math. Garland responded that he would look into the matter.[446]

[edit] November 13, 2015: Phillips 66 and National Energy Education Development Host Energy Education Workshop in Ponca City

The Ponca City News reported on November 13, 2015 that Phillips 66 and the National Energy Education Development (NEED) Project hosted an energy education workshop on Oct. 29 at the Phillips 66 4th Street Clubhouse for as many as 20 area primary and secondary level teachers from Ponca City, Newkirk, Agra, Ripley, McCord, Choctaw and Oklahoma City. “Phillips 66’s significant investment in energy education addresses the need for high quality energy curriculum and training for today’s teachers and students,” said Mary Spruill, executive director of the NEED Project. “Supporting NEED’s STEM (science, technology, engineering and math) and Workforce Development programming engages students and teachers in a deeper understanding of energy.”[447]

[edit] November 9, 2015: Garland Elected Chair of the Finance Committee at American Petroleum Institute

The American Petroleum Institute announced on November 9, 2015 that Phillips CEO Greg Garland has been elected chair of the Finance Committee at the American Petroleum Institute. “Greg Garland’s long record of leadership and unique insight as well as operational knowledge of the industry’s financial landscape will maximize value for our members and provide guidance for API’s strategy. API is the only national trade association representing all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. API’s more than 625 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 25 million Americans.[448]

[edit] November 4, 2015: Ponca City Knows How to Survive Oil Booms and Busts

Ponca City's Pioneer Woman - A Symbol of Our Community's Strength and Determination. Ponca City differs from many other places where an economic downturn could be a crisis. "Folks here know it's wise to have a backup plan," says Tammy Weber. "They hunker down and make do. And they believe it's only a matter of time before oil booms again." Photo: Hugh Pickens

The Associated Press has a feature story about Ponca City by Tammy Weber published on November 4, 2015 about how life in Ponca City differs from many other places where an economic downturn could be a crisis. "Folks here know it's wise to have a backup plan," writes Weber. "They hunker down and make do. And they believe it's only a matter of time before oil booms again." According to Weber people in Ponca City are following a familiar ritual: returning to jobs or plans they had before the boom arrived about six years ago or making new ones. Some kept side jobs all along or squirreled away money, remembering how suddenly prospects can change and heeding the advice of veteran oilfield workers to save money "because the oilfield won't last forever."

Local oilfield workers are taking lower-paying or multiple jobs. Spouses who might have stayed home are going to work. For example, Brian Cullen, 24, was laid off in May from an oilfield job where he earned more than $175,000 last year. Now he's selling cars in Oklahoma City earning "substantially less." If, a year from now "I'm not making more and still eating away my savings, then it will be getting to the point of starting to worry about things."

Ponca City, like many other cities, has seen a decline in sales tax revenue, but officials built a rainy day fund exceeding 10 percent of the budget. They're also trying to diversify the business base, which includes a tractor supply store, industrial air conditioning manufacturer and a company that refurbishes aircraft parts. Businesses that serve the oil industry are branching out and "not putting all their eggs in one basket," said David Myers, executive director of the Ponca City Development Authority.

Ponca City Mayor Homer Nicholson, who worked at the refinery for 38 years before retiring in 2003, said his hedge was going to auctioneer and real estate school and starting a side business that he still runs. "You just ride the waves up and down," said Nicholson adding that Ponca City's love affair with oil will not end anytime soon. "For those of us in this region, oil is good. We like oil and gas and energy because it has made a lot of people rich."[449]

[edit] October 30, 2015: Ponca Refinery Earns $137 million, Continues in Top Slot as Phillips' Most Profitable Refinery

Phillips 66 reported their third quarter earnings for 2015 on October 30, 2015 and the results of analysis of earnings for Phillips' Refining Business Segment show the Ponca City Refinery continues as the most profitable of Phillips' fifteen worldwide refineries. The Ponca City Refinery earned $137 million for Phillips in the third quarter of 2015 for an annualized profit of $546 million. Phillips' Wood River Refinery in Roxana, IL was the second most profitable with $109 million in earnings for Phillips in the third quarter of 2015 with an annualized profit of $437 million.[450]

The annualized profit of Phillips 66's five most profitable refineries for the second quarter of 2015 are:[451]

See Appendix 4 for detailed calculations:

[edit] October 28, 2015: County Councillor Calls for Irish Government to Purchase or Subsidize Phillips 66's Whitegate Refinery

Phillips 66's Whitegate Refinery. Calls are now being made for the Irish overnment to step in and purchase Whitegate Refinery – or at least heavily subsidise it – in order to safeguard hundreds of jobs and an asset worth €100m to the local economy. Sinn Fein county councillor and candidate for Cork East in the forthcoming General Election, Pat Buckley, said the news that the refinery could close was “extremely concerning and a potential disaster for Whitegate, East Cork, and the country as a whole”, adding that it of the highest national importance that it now be purchased by the Government. Photo: Phillips 66

The Evening Echo reported on October 28, 2015 that calls are now being made for the Government to step in and purchase Whitegate Refinery – or at least heavily subsidise it – in order to safeguard hundreds of jobs and an asset worth €100m to the local economy. Sinn Fein county councillor and candidate for Cork East in the forthcoming General Election, Pat Buckley, said the news that the refinery could close was “extremely concerning and a potential disaster for Whitegate, East Cork, and the country as a whole”, adding that it of the highest national importance that it now be purchased by the Government. “The refinery contributes €100 million directly into the local economy which is a huge benefit to the whole Cork Harbour area. It also contributes at least 600 spin-off jobs and accounts for half the shipping tonnage in Cork Harbour. If this refinery is not sold and as a possible result ceases to operate after July 2016, Ireland will lose another vital asset. There will be massive implications. We need fuel that is secure, sustainable and affordable for Ireland.”[452]

[edit] October 27, 2015: Phillips Reports Startup, Excess Emissions at Ponca Refinery

Phillips reported an unspecified unit startup and carbon monoxide from the fluid catalytic cracking unit regenerator at its Ponca City, Oklahoma refinery[453]

[edit] October 23, 2015: LA Times Reports that California Retirees are Taking on Phillips 66

The Los Angeles Times reported on October 23, 2015 that retirees in Nipomo are pooling their resources to fight Phillips plans to build a railroad terminal that would accommodate 260 crude oil-carrying trains a year at Phillips' Santa Maria Refinery.

I imagine these folks are kind of a nightmare for Phillips 66. Ranging in age from 61 to 73, they are highly educated professionals with backgrounds in science, engineering, economics, air pollution and hospital administration, and they are, mostly, retired. Which means they have time. Time for research. Time to make PowerPoint presentations. Time to lobby mayors and city councils and school boards all over San Luis Obispo County, and the rest of the state. Time to appear at club meetings. Time to write newsletters. Time to compile lists of oil train derailments. Time to comb through the 2012 Phillips 66 annual report that described how employing a new "crude-by-rail strategy" would bring cheaper (or "cost-advantaged") oil to its refineries, boosting profits. "We became concerned because we are within shouting distance of their proposed terminal," said Martin Akel, 67, who owns a marketing consulting firm. "We saw a problem that affected health, safety and our very way of life."

"The San Luis Obispo Planning Commission is to take up the matter early next year. After that, the proposal goes to the county Board of Supervisors," writes Robin Abcarian. "No one knows how they will vote. But I'm putting my money on the retirees."[454]

[edit] October 23, 2015: Phillips 66's Houston Ship Channel Cross-Channel Connector is the 2015 Trenchless Technology Project of the Year for New Installation

Trenchless Technology reported on October 23, 2015 that Phillips' Houston Ship Channel Cross-Channel Connector took two years to design, plan and permit, with safety being of primary importance. The project required a ton of planning before the first drill rod was in the ground, including precision, pinpoint knowledge of what was already buried in the channel, as well as a plan to keep full circulation during pullback. project is described as a record-setting HDD installation for an 18-in. steel gas pipeline for energy giant Phillips 66, reaching what was once thought to be an unachievable distance of 12,459 ft.

“This was all done in a very congested corridor. … Hitting it on the tips was pretty amazing,” says Tim McGuire, vice president at Michels Directional Crossings at Michels Corp. “There’s only a handful of HDD crossings in the world that have ever been attempted greater than 12,000 ft. There were a lot of challenges related to just that aspect alone.” “We hit them right on the ends,” says Michels Directional Crossings operations manager Jeff Mueller. “The pilot holes matched up perfectly. We really didn’t do the intersect operations because it was self-intersecting, if you want to call it that. As a company, Michels has done more than 200 intersects and [attained]tip-to-tip about a half dozen times. It’s pretty rare.”

McGuire notes that during the pilot hole drilling, Michels implored Phillips 66 to allow the crews to move to a 24/7 work schedule on its property to ensure the integrity of the hole was intact. This was due to the changing soil and drilling conditions. “The string torque was getting elevated and we needed to work 24/7 to keep [the string]moving,” McGuire says. “Had [Phillips 66] not allowed us to do that, there’s a good possibility we would have had a lot of problems and wouldn’t have been successful.” The Michels team lauded Phillips 66 for success in this project, saying it was an outstanding partner in its response to the team’s needs for additional work space and facilitating its 24-hour pilot hole operations.[455]

[edit] October 26, 2015: Construction Begins For New Hydrotreater at Lake Charles Refinery for Lower Sulfur Content in Gasoline

The Lake Charles Refinery. Construction recently began for a new hydrotreater at the Lake Charles Refinery to meet federal Tier 3 standards for lower sulfur content in gasoline for the beginning of 2017. Phillips 66 also is considering building a new hydrocracker or other potential upgrades in order to produce road-grade diesel fuels that would be more marketable in the U.S. The Lake Charles Refinery currently produces lots of diesel, but it is high-sulfur diesel that must be sold internationally or in the Northeast as home heating oil, said Refinery Manager Steve Geiger. Lake Charles Refinery Photo by: Cory O'Quinn Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic

The Midland Reporter-Telegraph reported on October 26, 2015 that construction recently began for a new hydrotreater at the Lake Charles Refinery to meet federal Tier 3 standards for lower sulfur content in gasoline for the beginning of 2017. Phillips 66 also is considering building a new hydrocracker or other potential upgrades in order to produce road-grade diesel fuels that would be more marketable in the U.S. The Lake Charles Refinery currently produces lots of diesel, but it is high-sulfur diesel that must be sold internationally or in the Northeast as home heating oil, said Refinery Manager Steve Geiger. Phillips 66 has resisted the expansion thus far because the demand from foreign markets remains strong, Geiger said. “We’re going to spend money where we get the best return,” Geiger said.[456]

+ Learn More About the Lake Charles Refinery

[edit] October 26, 2015: Construction Continues on Bayou Bridge Pipeline to Lake Charles Refinery

The Midland Reporter-Telegraph reported on October 26, 2015 that construction is ongoing on Phillips 66' Bayou Bridge pipeline to pump crude oil from terminals in southeast Texas directly to Lake Charles. The pipeline, which is scheduled to be completed in the first quarter of 2016, will essentially connect Phillips 66' expanding Beaumont Terminal storage hub with the Lake Charles Refinery. The pipeline will connect to systems from the Texas’ Permian Basin, Eagle Ford Shale, East Texas, the Texas Panhandle and southern Oklahoma. A second phase of the Bayou Bridge will connect Lake Charles to the market hub in St. James, Louisiana, which is roughly between Baton Rouge and New Orleans.[457]

[edit] October 21, 2015: Phillips Considers Hydrocracker at Lake Charles Refinery to Produce Ultra-Low sulfur Diesel

Houston Business Journal reported on October 21, 2015 that Phillips 66 is stacking the deck at their Lake Charles Refinery to take advantage of what the company sees as a strong future for diesel products. "We continue to look into opportunities to get into fuel-grade diesel," said Steve Geiger, general manager of the refinery in Lake Charles, known in the company as the Lake Charles Refinery. According to Geiger the Lake Charles Refinery is already stacked to maximize diesel production, but not the fuel-grade diesel that drivers of light-duty vehicles are most familiar with. Phillips 66's Lake Charles complex currently only produces diesel products with 2,000 ppm of sulfur, also considered "high-sulfur" diesel, which is used by only certain non-road, locomotive and marine vessels. However, diesel fuels used in light-duty vehicles are expected to grow in market share by significant strides in the coming decades and Phillips 66 is actively looking to produce fuel-grade diesel at Lake Charles.[458]

According to Geiger Phillips 66 is considering adding a hydrocracker to produce ultra-low sulfur diesel at its Lake Charles Refinery. "We can't make road grade diesel," Geiger said. "We're looking at several different options: hydrocracking, hydrotreating, a revamp." Additionally, the refinery plans to replace the four drums on the fuels Coker in 2017. Geiger declined to say when the work was scheduled and when it is due to take place on the year. The drums have reached the end of their operational life.[459]

[edit] October 21, 2015: Marland Estate Commission's Octoberfest Fund Raiser Brings In Over $40,000 This Year for Marland Mansion

The Ponca City News reported on October 21, 2015 that the annual Oktoberfest, held every year on the first weekend of October at the Marland Mansion grounds, brought in more than $40,000 . The event benefits the Marland Estate Foundation dedicated to the maintenance and improvement of the Marland Mansion and Estate. This year the Foundation has dedicated funds to the OETA documentary, "High Stakes, Life and Times of E.W. Marland," an hour long program about Marland, 10th governor of Oklahoma, founder of Marland Oil Company, and the builder of the Marland Mansion.[460]

[edit] October 20, 2015: John Baza Receives E. W. Marland Award for his Work in the Regulatory Arena

The Deseret News reported on October 20, 2015 that John Baza, director of the Utah Division of Oil, Gas and Mining, received E. W. Marland Award from the Interstate Oil and Gas Compact Commission for his work in the regulatory arena. The annual E.W. Marland Award was established in 1994 to recognize an outstanding state regulator. E.W. Marland was a U.S. congressman, the 10th governor of Oklahoma, and is considered the father of the compact commission. has been with the division for more than 25 years, with nearly 15 of those years in the oil and gas program before assuming the role of division director. As director, he leads the division's efforts in petroleum development, coal mining, and mineral mining, along with abandoned mine reclamation.[461]

[edit] October 14, 2015: New Concerns Over Earthquakes in Oklahoma Near the Cushing Hub

The NYT reported on October 14, 2015 that a magnitude 4.5 quake struck Saturday afternoon about three miles northwest of the Cushing Hub, a sprawling tank farm that is among the largest oil storage facilities in the world, holding 53 million barrels of crude. The Cushing oil hub stores oil piped from across North America until it is dispatched to refineries. The Department of Homeland Security has gauged potential earthquake dangers to the hub and concluded that a quake equivalent to the record magnitude 5.7 could significantly damage the tanks while a study by Dr. Daniel McNamara concludes that recent earthquakes have increased stresses along two stretches of fault that could lead to quakes of that size. "It’s the eye of the storm,” says Dana Murphy, vice chairman of the state’s oil and gas regulatory body, the Oklahoma Corporation Commission.

“When we see these fault systems producing multiple magnitude 4s, we start to get concerned that it could knock into higher magnitudes,” says McNamara, author of a paper published online that a large earthquake near the storage hub “could seriously damage storage tanks and pipelines.” “Given the number of magnitude 4s here, it’s a high concern.” Nevertheless, Oklahoma’s attempt to deal with the earthquakes this autumn faces continuing obstacles. The government’s chief seismologist, who came under oil industry pressure to minimize the quakes’ origins in waste disposal, left this fall, and his successor is scheduled to depart soon. The state budget for the fiscal year that began in July slashed appropriations to the Corporation Commission by nearly 45 percent.[462][463][464]

[edit] October 14, 2015: Phillips Warns of Above-Average Emissions at Borger Refinery for Next Nine Days

Phillips Warns of Above-Average Emissions at Borger Refinery for Next Nine Days. Phillips 66 has warned of above-average gas emissions during the next nine days at Borger Refinery as the plant undergoes seasonal maintenance. "A side of the Unit 40 Electrostatic Precipitator Cabinets (ESP) will be taken off line for maintenance," Phillips said in a filing posted Wednesday on the website of the Texas Commission on Environmental Quality. "During maintenance there may be offline rapping. During the work there may be periods of high opacity and high particulate emissions. The Unit 40 FCCU is not scheduled to go down." Borger Refinery Photo by: Philip Klein All Rights Reserved. Photo used with permission of the photographer Borger Refinery Photo by: Philip Klein All Rights Reserved. Photo used with permission of the photographer

Nasdaq reported on October 14, 2015 that Phillips 66 has warned of above-average gas emissions during the next nine days at Borger Refinery as the plant undergoes seasonal maintenance. "A side of the Unit 40 Electrostatic Precipitator Cabinets (ESP) will be taken off line for maintenance," Phillips said in a filing posted Wednesday on the website of the Texas Commission on Environmental Quality. "During maintenance there may be offline rapping. During the work there may be periods of high opacity and high particulate emissions. The Unit 40 FCCU is not scheduled to go down."[465]

"Some of Phillips 66's other refineries do not run as safely or trouble-free as the refinery in Ponca City" says Hugh Pickens, a private investor who closely follows Phillips' worldwide refinery operations. "For example, the Borger Refinery, operated by Phillips 66 since 1927, has a troubled history that includes two employee deaths and eleven injured by deadly fumes from a paralyzing gas in 1979 for which OSHA cited Phillips for "willful and serious" safety violations," says Pickens. More recently Phillips' Borger Refinery suffered three serious employee injuries in March, 2014, an employee fatality in 2012, a penalty for violations of the Clean Air Act in 2014, and an unscheduled shutdown in July, 2014 that closed down the refinery for 35 days for repairs. "Borger hasn't run well this year," Phillips 66 CEO Greg Garland told analysts last year.

[edit] October 14, 2015: Phillips Reports Start-Up, Emissions at Ponca City Refinery

Phillips reports a start-up at its Ponca City, Oklahoma refinery on October 14. The company also reports excess carbon monoxide emissions from an unspecified unit feed heater.[466]

[edit] October 12, 2015: East Plant Evacuated at Ponca Refinery After Hydrocarbon Release

East Plant Evacuated at Ponca City Refinery After Hydrocarbon Release. There was a hydrocarbon release at the Ponca City Refinery on October 12, 2015 at 10am while switching pumps in the East Plant. As a precaution, the East Plant was evacuated. According to Phillips spokewoman Diane Anderson, all personnel are accounted for, no injuries occurred, and there are no health risks associated wit the release. Phillips will continue to monitor the air at the refinery. Photo: Hugh Pickens

The Ponca City News reported on October 12, 2015 that there was a hydrocarbon release at the Ponca City Refinery on October 12, 2015 at 10am while switching pumps in the East Plant. As a precaution, the East Plant was evacuated. According to Phillips spokewoman Diane Anderson, all personnel are accounted for, no injuries occurred, and there are no health risks associated wit the release. Phillips will continue to monitor the air at the refinery.[467]

[edit] October 12, 2015: Phillips 66 Cuts Capital Spending by 20 percent

The Houston Business Journal reported on October 12, 2015 that Phillips 66 plans to spend $3.6 billion in 2016 (including capital for its master limited partnership and for self-funded joint ventures), down from $4.6 billion in 2015 (not including spending for the MLP — Phillips 66 Partners). About 70 percent of the $1.2 billion allotted for refining will be for reliability, safety and environmental projects, including compliance with the new Tier 3 gasoline specifications. Discretionary Refining capital of about $400 million will improve product yields and lower feedstock costs. These investments include a modernization of the FCC at Bayway, and an upgrade of the vacuum tower at Billings.

The Phillips 66 Board of Directors has also authorized an additional $2 billion for share repurchase, bringing total authorizations to $9 billion. Shares will be repurchased from time to time in the open market at the company’s discretion, subject to market conditions and other factors, and in accordance with applicable regulatory requirements.[468][469]

In December 2014, Phillips 66 announced plans to invest $1.1 billion of capital expenditures in Refining in 2015, approximately 75 percent of which will be sustaining capital. These investments were related to reliability and maintenance, safety and environmental projects, including compliance with the new EPA Tier 3 gasoline specifications. Discretionary Refining capital investments were directed toward small, high-return, quick pay-out projects, primarily to enhance use of advantaged crudes and improve product yields.[470]

[edit] October 10, 2015: It Has Taken Ten Years for Ponca City to Rebound from ConocoPhillips' Cuts in Carbon Fiber and Refining Research

Empty Office Buildings at Phillips 66's Ponca City Facility: It Has Taken Ten Years for Ponca City to Rebound from ConocoPhillips R&D Cuts in Carbon Fiber and Refining Research Between 2007 and 2009. Jeff Mordock and Scott Goss wrote in Delaware Online on October 10, 2015 that when ConocoPhillips cut research and development at its carbon fiber and refining research facilities in Ponca City between 2007 and 2009, the loss of those research units left Ponca City with empty buildings, higher unemployment and even declining student test scores as the high-performing children of scientists moved away. Photo: Hugh Pickens

Jeff Mordock and Scott Goss wrote in Delaware Online on October 10, 2015 that when ConocoPhillips cut research and development at its carbon fiber and refining research facilities in Ponca City between 2007 and 2009, the loss of those research units left Ponca City with empty buildings, higher unemployment and even declining student test scores as the high-performing children of scientists moved away.

According to Frankie Wood-Black, a principal at the environmental and scientific education company Sophic Pursuits, Inc., who also teaches at Northern Oklahoma College, those research job cuts followed executive level job losses in Ponca City, which began in 2002. "It hurt our economy and school system," said Wood-Black. "We lost a layer of infrastructure and it's taken us 10 years to rebound from all that." Mordock and Goss write that all of the ancillary jobs that were supported by well-paid ConocoPhillips researchers also evaporated and even traveling theater groups stopped touring through Ponca City because of the population reduction. "If you stayed in Ponca City, you had to make choices about how you are going to earn a living," said Wood-Black.[471]

On November 7, 2008 ConocoPhillips announced that the company was planning to downsize their operation in Ponca City and that all 700 office worker positions in Ponca City were being for relocated to Bartlesville or Houson and that all 700 office worker positions in Ponca City were being considered for consolidation or relocation. "Consolidation and relocation are options we're looking at," said company spokesman Tracy Harlow. "Any and all options are still on the board right now." Most of ConocoPhillips' nonrefinery jobs in Ponca City were focused in the credit card, information technology, facilities and other support operations, she noted. A steering committee, including ConocoPhillips managers, was looking at options. The review started November 2008 and had not narrowed into specifics so far, Harlow said. The 750 people employed in refinery operations would not be affected by the review.[472]

The Tulsa World reported on February 17, 2009 that ConocoPhillips had decided to relocate all of its 750 non-refinery positions out of Ponca City within two years and that first 250 jobs will be moved in 2009 with 180 jobs going to Houston and 70 jobs to Bartlesville. The positions moving first include jobs in technical services, research and development, engineering and support, human resources and Internet technology, among others. Management met with hundreds of Ponca City employees to tell them the news. "It’s a difficult time in general for all ConocoPhillips employees," said ConocPhillips spokesman Tracy Harlow. ConocoPhillips originally planned the Ponca City relocation study as a standalone effort in 2008 but falling energy and credit markets forced ConocoPhillips to consider layoffs and include Ponca City into its overall business efficiency study. "We made the strategic decision to consolidate locations for the most effective corporate operations,” Harlow said. “Obviously we are conserving cash right now, so cash will limit relocations in 2009.”[473]

[edit] October 9, 2015: Lankford and Lucas Among Strongest Supporters of Law to Lift Crude Oil Export Ban

The McCarville Report reported on October 9, 2015 that Congressman Frank Lucas voted for HR 702, a law to lift the ban on American exports for crude oil, which he says is sorely needed to keep U.S. energy production growing. “America is currently one of the top global energy producers in the world, and it’s time for us to recognize that. We should be looking for ways to take advantage of our domestic energy production, rather than stifling it through misguided government intervention. Lifting this outdated ban benefits several facets of our economy, from drivers paying less at the pump to the revitalization of rural communities who play a major role in American energy production,” said Lucas.

The Senate is working on a similar measure which is co-sponsored by Senator James Lankford who echoes Lucas’ sentiment concerning the President’s stance on the issue. “The House’s strong bipartisan vote to lift the ban on oil exports sends a powerful message that the American people want policies that will provide more jobs and a stronger economy. Oklahomans know that a consistent energy market means consistent energy jobs. Responsible and safe crude oil exports should not be blocked due to extreme ideology. The time is right to remove this antiquated barrier for domestic energy production.”[474]

Oklahoma Senator James Lankford held a one hour a town hall meeting at the Ponca City Civic Center on September 1, 2015 that was attended by over 110 Ponca City citizens. After discussing the Iran Nuclear Deal, the federal deficit, defense spending, and the presidential race, Lankford took questions from the audience.[475] The first question was from Hugh Pickens who asked Senator Lankford about his position on the lifting of the ban on the export of crude oil from the United States. "The Ponca City Refinery is the largest refiner in Oklahoma and the refinery here in Ponca City is the most profitable and best run of Phillip 66's fifteen worldwide refineries," said Pickens. "Where do you stand on lifting the 40-year ban on the export of crude oil from the United States?" Senator Lankford noted that there were only two countries in the world where there was a ban on the export of crude oil. One of them is Iran and the other is the United States said Lankford. Lankford said he was in favor of free markets and he thought that lifting the ban would be beneficial to the United States. Senator Lankford said he planned to vote in favor of lifting the ban on the export of crude oil.

US Congressman Frank Lucas held a town hall meeting in the Civic Center of Ponca City on August 28, 2015 to discuss issues with interested citizens. Lucas discussed the Iran Nuclear deal, the budget deficit, and the presidential race and then took questions from the audience.[476] The first question was from Hugh Pickens who asked Congressman Lucas where he stood on the question of lifting the ban on the export of crude oil from the United States. Congressman Lucas said that he was strongly in favor of lifting the ban, that he expected the bill to come before Congress later this year, and that he would vote in favor of lifting the ban.

[edit] October 6, 2015: Gas Prices Rise in Oklahoma as Ponca Refinery and Other Refineries Go Down for Maintenance

Gas Prices Rise in Oklahoma as Ponca City Refinery and Other Refineries Go Down for Maintenance. The fuel price in Oklahoma City has jumped 16 cents over the past week and is likely to continue climbing. Most of the increase has been from both regularly scheduled refinery maintenance and larger problems that have been found while the refineries are offline, AAA Oklahoma spokesman Chuck Mai said. Fifteen refineries were down for maintenance Tuesday, including the Phillips 66 refinery in Ponca City that provides much of the gasoline used throughout central Oklahoma. Flickr Creative Commons Photo by JeepersMedia Attribution 2.0 Generic (CC BY 2.0)

NewsOK reported on October 6, 2015 that the fuel price in Oklahoma City has jumped 16 cents over the past week and is likely to continue climbing. Most of the increase has been from both regularly scheduled refinery maintenance and larger problems that have been found while the refineries are offline, AAA Oklahoma spokesman Chuck Mai said. Fifteen refineries were down for maintenance Tuesday, including the Phillips 66 refinery in Ponca City that provides much of the gasoline used throughout central Oklahoma. The scheduled outages also have led gasoline to be rerouted throughout the country to make up for regional supply disruptions. Refineries typically go offline for repairs and maintenance this time of year as they switch to less expensive winter-blend fuels. But this year's maintenance season so far as been more disruptive than usual, Mai said. “It's not unlike when you take your car in for an oil change and find the alternator is about to go out or you need new brake pads,” Mai said. “Once you start doing that routine maintenance, you can find more things that are wrong. That's happening with these refineries. Sometimes when you get in there and look at the underbelly, you can find things that need more time to fix.”[477]

[edit] October 6, 2015: ConocoPhillips Lays Off 170 Employees in Bartlesville

ConocoPhillips Lays Off 170 Employees in Bartlesville. ConocoPhillips announced on October 6, 2015 that the company will lay off 170 employees in Bartlesville - approximately 10% of the company's approximately 1,700 employees in the community. No Phillips 66 employees in Bartlesville are affected by the layoffs. On November 11, 2011 ConocoPhillips announced that Phillips 66 would be the name of a new independent oil and gasoline refining and marketing firm, created as ConocoPhillips split into two companies. ConocoPhillips kept the current name of the company and concentrated on oil exploration and production side while Phillips 66 included refining, marketing, midstream, and chemical portions of the company.

The Bartlesville Examiner-Enterprise reported on October 6 2015 that ConocoPhillips will lay off 170 employees in Bartlesville - approximately 10% of the company's approximately 1,700 employees in the community. “We initially announced reductions internally on August 31 and externally on September 1,” said a ConocoPhillips spokesperson. “At the time, we announced that 10 percent of our global workforce would be affected. That 10 percent workforce reduction that you’re seeing globally, that (percentage) is what you’ll see in Bartlesville as well.” The layoffs come after what the spokesperson previously called a “dramatic downturn,” which has forced the company to look at its future workforce needs. While the company has taken significant steps to strengthen its position in the industry, workforce reductions are necessary, the spokesperson said.

“ConocoPhillips and its predecessor, Phillips Petroleum Company, have been lifelong, excellent corporate citizens to the City of Bartlesville,” said Bartlesville Mayor Tom Gorman. “I fully expect this relationship to continue well into the future. Through the years, ConocoPhillips — and Bartlesville along with it — has weathered many cycles in the petroleum industry. Although this is a difficult time in the petroleum industry, ConocoPhillips seems to be well positioned to emerge from this cycle as a leader in its segment of the petroleum industry. As a community, Bartlesville has compassion for those who are experiencing career changes.”[478]

No Phillips 66 employees in Bartlesville are affected by the layoffs. On November 11, 2011 ConocoPhillips announced that Phillips 66 would be the name of a new independent oil and gasoline refining and marketing firm, created as ConocoPhillips split into two companies. ConocoPhillips kept the current name of the company and concentrated on oil exploration and production side while Phillips 66 included refining, marketing, midstream, and chemical portions of the company.

[edit] October 6, 2015: Ponca City Not Directly Affected by ConocoPhillips Layoffs

According to Hugh Pickens, an independent analyst who closely monitors Phillips 66's worldwide operations, Ponca City is not expected to be impacted by the layoffs announced at ConocoPhillips including 170 layoffs in Bartlesville announced on October 6, 2015.[479] "In 2012 ConocoPhillips split into two companies - an upstream company focused on oil exploration, and a downstream company, called Phillips 66, that is focused on refineries, chemical plants, and midstream. The Ponca City refinery went with Phillips 66 which has not announced layoffs," says Pickens. "The Ponca City Refinery, which employs about 700 Phillips 66 employees and contractors, is running at almost 100% capacity and is considered to be one of the best run and most profitable of Phillips 66's fifteen worldwide refineries."

However there are some Ponca City residents who work for ConocoPhillips and commute to Bartlesville who could be impacted by the ConocoPhillips layoffs. In April, 2015 a previous ConocoPhillips' reduction in force affected some employees commuting from Ponca City to Bartlesville for a number of years. A Ponca City woman employee, who did not want to be identified told The Ponca City News, she was terminated from ConocoPhillips and sent home with others from the Bartlesville operations by cab. The 28-year employee, who had car-pooled, was terminated April 1, 2015 and transported back to Ponca City in a cab paid for by the company. A spokesman for ConocoPhillips said, “Within Bartlesville, less than 4 percent of our employees will be impacted by these workforce reductions. Anytime you have to do these kinds of reductions, it’s always very difficult.”[480]

In 2008 ConocoPhillips downsized their operation in Ponca City as about 700 office worker positions in Ponca City were relocated to Bartlesville or Houston. "Consolidation and relocation are options we're looking at," said company spokesman Tracy Harlow. "Any and all options are still on the board right now." Most of ConocoPhillips' nonrefinery jobs in Ponca City were focused in the credit card, information technology, facilities and other support operations, Harlow said. A steering committee, including ConocoPhillips managers, was looking at options. The review started November 2008 and had not narrowed into specifics so far, Harlow said. The 750 people employed in refinery operations would not be affected by the review.[481]

[edit] September 21, 2015: Phillips Prepares for Turn Around at Ponca Refinery

The Ponca City News reported on September 21, 2015 that Phillips 66 is preparing the Ponca City Refinery for turn around and that citizens may have noticed a cinnamon-like smell coming from a vessel cleaner at the refinery. According to Phillips the odor is harmless and biodegradable.[482]

[edit] September 19, 2015: Archie Dunham Makes $15 Million Donation to Houston Baptist University

Archie Dunham Paid $25 Million Bonus for Merging Conoco with Phillips 66. Former ConocoPhillips CEO Archie Dunham, the man who earned over 25 million dollars in bonuses for engineering the merger of Conoco and Phillips Petroleum in 2002, made a donation of $15 million to Houston Baptist University in September, 2015. Dunbar received a $26.6 million special payment in 2003 triggered by the merger of Conoco and Phillips 66 as a "change of control" payment and a corresponding "tax gross-up payment" that allowed Dunham to pull in more than $31 million in 2002. Dunham's bonus was made "in connection with the merger" of Houston's Conoco and Bartlesville, Okla.-based Phillips, according to Securities and Exchange documents filed by Houston-based ConocoPhillips. The combined change of control payments for former Conoco Executives amounted to approximately $64.8 million. "Those guys are getting rich," said one energy stock analyst. Photo: Wikipedia

The San Antonio Express-News reported on September 19, 2015 that former ConocoPhillips CEO Archie Dunham, the man who earned over 25 million dollars in bonuses for engineering the merger of Conoco and Phillips Petroleum in 2002, made a donation of $15 million to Houston Baptist University. Dunbar received a $26.6 million special payment in 2003 triggered by the merger of Conoco and Phillips 66 as a "change of control" payment and a corresponding "tax gross-up payment" that allowed Dunham to pull in more than $31 million in 2002. Dunham's bonus was made "in connection with the merger" of Houston's Conoco and Bartlesville, Okla.-based Phillips, according to Securities and Exchange documents filed by Houston-based ConocoPhillips. The combined change of control payments for former Conoco Executives amounted to approximately $64.8 million. "Those guys are getting rich," said one energy stock analyst.[483][484][485]

HBU President Robert B. Sloan, Jr., announced on May 19, 2015 the naming of the Archie W. Dunham College of Business. "We have long been blessed at HBU to be able to point our students to Archie and Linda Dunham as examples of the transforming power of Christian faith and Christian influence in the world," said President Sloan. "It is now an added privilege to be able to point to the Archie W. Dunham College of Business as a further tangible expression of our gratitude to the Dunham family." The Dunhams have supported a number of major on-campus projects that hold their name, including the Dunham Bible Museum, Dunham Theater, and Dunham Field for the University's newly constructed football stadium.[486]

Dunbar prides himself on being a man of integrity. “Integrity and ethics are among the responsibilities of all our corporate leadership, especially myself,” said Dunham in 2012. “Integrity and ethics must be evident in not only our personal lives, but also in our professional conduct before they can be instilled in our employees.”[487]

Jim Mulva, Phillips CEO and president, missed out on a change of control payment, but still managed to earn more than $18 million in 2002. A majority of Mulva's money in 2002 came via a "long-term incentive payout" of more than $14.9 million. Mulva was chairman and CEO of Phillips before the merger with Conoco in 2002 and became CEO of ConocoPhillips after Dunham's retirement in 2004.[488] Jim Mulva received the biggest package of any CEO in 2012 when he stepped down as CEO of ConocoPhillips. Mulva's total severance package was about $156 million and his exit sum was on top of salary, bonus and other compensation received while working for the company.[489]

[edit] September 18, 2015: ConocoPhillips CEO Ryan Lance Says Bartlesville Still Important Even As Company Look at 10 Percent Global Reduction in Force

The Bartlesville Examiner-Enterprise reported on September 18, 2015 that ConocoPhillips CEO Ryan Lance spoke to the Bartlesville Chamber of Commerce on September 17, 2015 and told them that Bartlesville is still an important piece of the exploration and production industry and that as ConocoPhillips looks at spending cuts, Bartlesville will continue to be a key element to the company. “Bartlesville is a big, important part of the company. It’s going to stay a big, important part of the company,” said Lance. “We are having to make some corrections — this is an industry that has lost a lot of revenue. You have to react to that, and you have to react to the short-term, but it’s really, really important to keep the mid-term and long-term in mind as we go through those cycles. That’s what we’re doing. We’re going to make it through the short-term, we’re going to come out when the cycle recovers and we’re going to be in one of the best positions to thrive as an E&P company.”

ConocoPhillips recently announced a 10 percent reduction of its global workforce, with the largest percentage occurring in North America. “The billion dollar challenge that I put out to the company is one that we’re stepping back for a minute and taking a look at how we run the company,” said Lance. “It is, in fact, in the whole world, so it’s not just here in Bartlesville. It’s really something that we’re doing around the world. I think it’s going to be more sustainable for our company in terms of sustainable costs.”

Lance told members of the chamber that while the local community will be impacted, it will be minimal. “There will be some impact in Bartlesville. There will be some people that will move onto other things, but it’s not going to be significant," said Lance adding that ConocoPhillips is going to take this opportunity to take a look at how the company handles its back office operations. “Bartlesville’s not going anywhere. Bartlesville’s going to be a significant part of the company today, tomorrow, next month, next year. We have 1,700 employees here, and we have a pretty efficient operation. But, we are taking the time out to take a look at it and say, ‘let’s look at how we do it.’ We have the right systems and processes of an independent E&P company … I think that’s just a healthy thing to do every now and then.”[490]

[edit] September 16, 2015: Documentary of the Life of E. W. Marland Is Moving Forward

High Stakes: The Life and Times of E. W, Marland. An OETA/PBS documentary called "High Stakes: the Life and Times of E. W. Marland" is now being filmed around Ponca City by filmakers Scott Swearingen and Steve Herrin Products and funded by a grant of $100,000 from the Marland Estate Foundation. Graphic: Hugh Pickens.

The Ponca City News reported on September 16, 2015 in a report on the Marland Estate Commission that an OETA/PBS documentary called "High Stakes: the Life and Times of E. W. Marland" is now being filmed around Ponca City. The documentary is being filmed by Scott Swearingen and Steve Herrin Products funded by a grant of $100,000 from the Marland Estate Foundation. David Keathly, Director of the Marland Estate said many days of interviews, staging and filming have already taken place and more scenes will be filmed this weekend, including spectacular ballroom scenes. Once the film airs on OETA, it will be shown on surrounding state’s PBS and draw more visitors to the Marland attractions in Ponca City said Keathley. Oklahoma author Michael Wallis is the narrator for the film.[491]

E. W. Marland's life ran to legendary proportions. The Pennsylvania native won and lost an oil fortune in West Virginia, a much larger one in Oklahoma, was a high-stakes gambler, lived lavishly, spent great amounts on his community and his workers, was a businessman with a strong social conscience, an enthusiastic conservationist and gardener. He had boom-and-bust times in politics as well as oil. After losing his independent Marland Oil Co. to financial sharks led by the younger J.P. Morgan, Marland a Democratic convert and ardent New Dealer won a term in Congress and one as Oklahoma's governor. Two bids for the U.S. Senate were unsuccessful. After his first wife died in 1926, he created controversy by having the legal status of their adopted daughter, Lydie, changed so he could marry her. He drilled for and found oil from the Appalachians to California, over much of the West and into Mexico. He pioneered in drilling the rich Three Sands and Burbank fields of Oklahoma this by a man trained as a lawyer, an early-day coal prospector self-taught in geology.[492]

E. W. Marland loved playing poker. A first rate player, Marland learned poker as a fraternity member at the Sigma Chi fraternity house at the University of Michigan in 1891. Marland loved gambling intensely and was a fair loser and a modest winner. At Ann Arbor Marland never gave the impression of excitability while playing but was alart though silent. John Joseph Mathews recounts in his book "Life and Death of an Oilman: The Career of E.W. Marland" that one time a sharpshooter from another part of town came to the Sigma Chi house to play. Very soon he had chips piled before him on the table. Then suddenly he stood up, beamed on the others and said, "I guess I'll check out." As he raked in the money from the banker in exchange for his chips, he said with a smug smile, "The fact is, boys, I need the money." Marland showed shocked surprise on his usually unreadable face. The expression of incredulity impressed the others when the sharpshooter had gone with all the money and they bantered Marland. At each game thereafter someone at some time usually after winning a large pot would say, "The fact is, boys, I need the money."[493]

After Marland sturck oil in Ponca City and had begun to build his oil empire, it is said E. W. and his lieutenants and friends would spend many a night playing poker. EW, Lew Wentz, George Miller, and Bill McFadden would play poker at the Arcade Hotel until daybreak, trading gossip and oil patch rumors. After EW struck it rich, there were hundreds of private poker parties in Ponca City every year. Sometimes these were lavish affairs at the Arcade Hotel or at some private home. Marland continued to love playing poker and played with deep concentration, except that now he could afford to lose or to win as much as seventy-five thousand dollars. When Marland built his "Palace on the Praiarie" he made sure to include a secret "Poker Room" in the first floor of the Marland Mansion, in a room next to the safe and the bootleg liquor vault.[494]

[edit] September 15, 2015: Vote Planned on Bill to Lift Crude Oil Export Ban

Barron's reported on September 15, 2015 that House Republicans plan to vote on a bill in the coming weeks to lift the nation’s 40-year-old ban on crude oil exports. More than a dozen oil companies— a list that includes Continental Resources (CLR), ConocoPhillips (COP). and Marathon Oil (MRO) .—have pushed Congress to lift the ban, arguing that unrestrained domestic oil exports would eliminate market distortions, streamline U.S. production and kindle the U.S. economy. House Majority Leader Kevin McCarthy (R., Calif.) is expected to announce the vote, being scheduled for the last week of September, at a Tuesday speech in Houston. While the legislation is likely to pass the GOP-controlled House, its prospects in the Senate are less clear. The White House hasn’t taken a position on the issue.[495]

Oklahoma Senator James Lankford held a one hour a town hall meeting at the Ponca City Civic Center on September 1, 2015 that was attended by over 110 Ponca City citizens. After discussing the Iran Nuclear Deal, the federal deficit, defense spending, and the presidential race, Lankford took questions from the audience.[496] The first question was from Hugh Pickens who asked Senator Lankford about his position on the lifting of the ban on the export of crude oil from the United States. "The Ponca City Refinery is the largest refiner in Oklahoma and the refinery here in Ponca City is the most profitable and best run of Phillip 66's fifteen worldwide refineries," said Pickens. "Where do you stand on lifting the 40-year ban on the export of crude oil from the United States?" Senator Lankford noted that there were only two countries in the world where there was a ban on the export of crude oil. One of them is Iran and the other is the United States said Lankford. Lankford said he was in favor of free markets and he thought that lifting the ban would be beneficial to the United States. Senator Lankford said he planned to vote in favor of lifting the ban on the export of crude oil.

US Congressman Frank Lucas held a town hall meeting in the Civic Center of Ponca City on August 28, 2015 to discuss issues with interested citizens. Lucas discussed the Iran Nuclear deal, the budget deficit, and the presidential race and then took questions from the audience.[497] The first question was from Hugh Pickens who asked Congressman Lucas where he stood on the question of lifting the ban on the export of crude oil from the United States. Congressman Lucas said that he was strongly in favor of lifting the ban, that he expected the bill to come before Congress later this year, and that he would vote in favor of lifting the ban.

[edit] September 10, 2015: Phillips 66 Donates Mural to City of St. Louis

"66 Reasons to Love St. Louis" Phillips 66 donated a 1,200-square-foot mural to the city of St. Louis as part of KDHX 88.1 FM "66 Reasons to Love St. Louis" ad campaign. "It is not likely we would have taken on a mural without some kind of sponsor," says Kelly Wells, the station's interim co-executive director. She said the company paid for all the materials and compensated the father-daughter artist duo, Robert and Liza Fishbone, who created it. Photo: Nicholas Phillips

The River Front Times reported on September 10, 2015 that Phillips 66 has donated a 1,200-square-foot mural to the city of St. Louis as part of KDHX 88.1 FM "66 Reasons to Love St. Louis" ad campaign. "It is not likely we would have taken on a mural without some kind of sponsor," says Kelly Wells, the station's interim co-executive director. She said the company paid for all the materials and compensated the father-daughter artist duo, Robert and Liza Fishbone, who created it. The Fishbones were selected by a committee consisting of representatives from Phillips 66, KDHX, the Grand Center and the locally-based marketing firm Switch after a request for proposals. According to the River Front Times, the mural also contains some subtle — though probably unintended — PR imagery. The left side of it depicts someone canoeing on a clean blue river — ironic, given that as recently as last April, the Phillips 66 refinery in Wood River, Illinois (which is just across the river from St. Charles) spilled 25,000 gallons of diesel fuel into a waterway that feeds into the Mississippi. The mural will be dedicated on September 11, by Mayor Francis G. Slay.[498]

[edit] September 9, 2015: Phillips 66 Storage and Pipeline Infrastructure Projects are an ‘Option on Exports’

The American Journal of Transportation reported on September 9, 2015 that Phillips 66’s investments in storage and pipeline infrastructure in southeastern Texas give the company an “option on exports” should the decades-old domestic crude export ban be lifted, Chief Executive Officer Greg Garland told analysts. “I do think people will make investments to support export infrastructure and we want to do that too,” Garland said during a webcast presentation at the Barclays CEO Energy-Power conference in New York. In 2014 Phillips 66 acquired a 7.1 million barrel crude and refined products terminal in Beaumont, Texas, that Garland said was “really an option on crude exports.” The terminal has two Aframax-capable docks and a barge dock. It also has rail and truck offloading facilities. Phillips is a 25 percent partner in two Energy Transfer Partners pipeline projects that aim to move North Dakota Bakken and Canadian heavy crude to Sunoco Logistics Partners’ storage terminal in nearby Nederland by late 2016.[499]

[edit] September 8, 2015: Judge Upholds Phillips 66 As Sole Owner of Sweeny Refinery

Retuers reported on September 8, 2015 that a federal court in New York has upheld a ruling granting U.S. oil and gas company ConocoPhillips sole ownership of a unit at the Sweeny, Texas refinery, ending a long-running dispute over the asset with Venezuela's PDVSA. U.S. District Judge Alison Nathan, in a decision signed last week, wrote that PDVSA's appeal was baseless and confirmed Conoco was the sole owner of the unit, which processes heavy crude oil. A spokesman for Conoco said litigation regarding refining assets was most likely transferred to Phillips 66, which was spun off from Conoco.

Conoco and PDVSA formed a joint venture in the late 1990s to run the refining unit. But they went to arbitration before the ICC in 2010 after crude supply interruptions that triggered a contract provision dissolving the pact. Under the terms of the contract, Conoco paid nothing for PDVSA's stake. The breakup clause in the contract said Conoco would gain the stake free of charge if PDVSA's dividends exceeded its capital contributions. Its dividends were $1.1 billion, while its capital contribution was about $270 million, the decision says. Conoco was also obligated to assume PDVSA's debt, which was about $195 million.[500]

[edit] September 3, 2015: Phillips Reports FCC Regenerator Malfunction at Ponca City Refinery

Reuters reported on September 3, 2015 that Phillips had reported an FCC Regenerator Malfunction at the Ponca City Refinery on August 28, 2015 according to a filing with the Oklahoma Department of Environmental Quality.[501]

What is the regenerator? The reactor and regenerator are considered to be the heart of the fluid catalytic cracking unit. The preheated high-boiling petroleum feedstock (at about 315 to 430 °C) consisting of long-chain hydrocarbon molecules is combined with recycle slurry oil from the bottom of the distillation column and injected into the catalyst riser where it is vaporized and cracked into smaller molecules of vapor by contact and mixing with the very hot powdered catalyst from the regenerator. Since the cracking reactions produce some carbonaceous material (referred to as catalyst coke) that deposits on the catalyst and very quickly reduces the catalyst reactivity, the catalyst is regenerated by burning off the deposited coke with air blown into the regenerator.[502]

[edit] September 3, 2015: Phillips Completing Temporary Replacement for Collapsed Cooling Tower at Wood River Refinery

The Wood River Refinery. A cooling tower at Phillips 66's Wood River Refinery collapsed on August 25, 2015 forcing one of the FCCs to be shut down and the other to be run at reduced rates. Phillips plans to have a temporary coolng tower in place by September 3, 2015 which will allow them to run its Fluid Catalytic Crackers (FCC) at normal rates, according to a source ramiliar with operations at the refinery.Creative Commons Attribution 2.0 Generic (CC BY 2.0)

Reuters reported on September 3, 2015 that Phillips plan to have a temporary coolng tower in place by September 3, 2015 which will allow them to run its Fluid Catalytic Crackers (FCC) at normal rates, according to a source ramiliar with operations at the refinery. A cooling tower collapsed on August 25 forcing one of the FCCs to be shut down and the other to be run at reduced rates.[503]

[edit] September 1, 2015: Hugh Pickens Asks Oklahoma Senator Lankford His Position on Lifting the Ban on Crude Oil Exports

Oklahoma Senator James Lankford held a one hour a town hall meeting at the Ponca City Civic Center on September 1, 2015 that was attended by over 110 Ponca City citizens. After discussing the Iran Nuclear Deal, the federal deficit, defense spending, and the presidential race, Lankford took questions from the audience.[504]

Hugh Pickens asked Senator Lankford about his position on the lifting of the ban on the export of crude oil products. "The Ponca City Refinery is the largest refiner in Oklahoma and the refinery here in Ponca City is the most profitable and best run of Phillip 66's fifteen worldwide refineries," said Pickens. "Where do you stand on lifting the 40-year ban on the export of crude oil from the United States?" Senator Lankford noted that there were only two countries in the world where there was a ban on the export of crude oil. One of them is Iran and the other is the United States said Lankford. Lankford said he was in favor of free markets and he thought that lifting the ban would be beneficial to the United States. Senator Lankford said he planned to vote in favor of lifting the ban on the export of crude oil.

Fuelfix reported on May 7, 2014 that Phillips 66 CEO Greg Garland said Phillips doesn’t oppose exporting U.S. oil, putting the company at odds with other independent refiners who have lobbied aggressively against lifting the nation’s crude exports ban. In the past, Garland has expressed outright support for lifting the ban, garnering him attention for reportedly being the first major refining head to take that position. According to Fuelfix, Garland is now taking a slightly softer position. “We’ve never said we’re for — we’ve said we don’t oppose,” Garland said. “In our view, it’s time to have an honest, open dialogue about energy policy in the U.S., and we need to be holistic in that,” Garland continued. Garland said he isn’t very confident U.S. policy on crude exports will change any time soon. “In an election year, I think it’s going to be difficult for Congress to move on this issue simply because they have too many other things on their plate,” Garland said. “Politically, it’s a very difficult thing right now.”[505]

[edit] September 1, 2015: ConocoPhillips to Slash Workforce with Massive Layoffs, Bartlesville to be Impacted

CNBC reported on September 1, 2015 that ConocoPhillips will cut about 10 percent of its global workforce, with the largest percentage occurring in North America. "As we have assessed the implications of lower prices on our business, we've made the difficult decision that workforce reductions will be necessary," wrote Daren Beaudo, director of communications, in an email to CNBC. Beaudo said that more information will be available in the coming weeks. The company currently employs 3,753 workers in its Houston headquarters where the reductions are expected to impact about 500 workers.[506]

In Bartlesville, 1,700 people work for ConocoPhillips, but the company has not said how many employees, if any, could be let go. ConocoPhillips released a statement saying, in part, "While Bartlesville will be impacted [by the layoffs] we do not have any specifics beyond that." Bartlesville Chamber of Commerce President Sherri Wilt said she hasn't heard anything, but said, while losing jobs at ConocoPhillips would be a big blow, Bartlesville is diversifying its economy.[507] “We’ll know more in the next several weeks as we work through our formal process. Our industry is undergoing a dramatic downturn, which has caused us to look at our future workforce needs,” a ConocoPhillips spokesperson told the Bartlesville Examiner-Enterprise. “As we have assessed the implications of lower prices on our business, we’ve made the difficult decision that workforce reductions will be necessary.”[508]

[edit] September 1, 2015: Ponca City Not Expected to Be Impacted by ConocoPhillips Layoffs

According to Hugh Pickens, an independent analyst who closely monitors Phillips 66's worldwide operations, Ponca City is not expected to be impacted by the layoffs announced at ConocoPhillips. "In 2012 ConocoPhillips split into two companies - an upstream company focused on oil exploration, and a downstream company, called Phillips 66, that is focused on refineries, chemical plants, and midstream. The Ponca City refinery went with Phillips 66 which has not announced layoffs," says Pickens. "The Ponca City Refinery, which employs about 700 Phillips 66 employees and contractors, is running at almost 100% capacity and is considered to be one of the best run and most profitable of Phillips 66's fifteen worldwide refineries."

However there are some Ponca City residents who work for ConocoPhillips and commute to Bartlesville who could be impacted by the ConocoPhillips layoffs. In April, 2015 a previous ConocoPhillips' reduction in force affected some employees commuting from Ponca City to Bartlesville for a number of years. A Ponca City woman employee, who did not want to be identified told The Ponca City News, she was terminated from ConocoPhillips and sent home with others from the Bartlesville operations by cab. The 28-year employee, who had car-pooled, was terminated April 1, 2015 and transported back to Ponca City in a cab paid for by the company. A spokesman for ConocoPhillips said, “Within Bartlesville, less than 4 percent of our employees will be impacted by these workforce reductions. Anytime you have to do these kinds of reductions, it’s always very difficult.”[509]

In 2008 ConocoPhillips downsized their operation in Ponca City as about 700 office worker positions in Ponca City were relocated to Bartlesville or Houston. "Consolidation and relocation are options we're looking at," said company spokesman Tracy Harlow. "Any and all options are still on the board right now." Most of ConocoPhillips' nonrefinery jobs in Ponca City were focused in the credit card, information technology, facilities and other support operations, Harlow said. A steering committee, including ConocoPhillips managers, was looking at options. The review started November 2008 and had not narrowed into specifics so far, Harlow said. The 750 people employed in refinery operations would not be affected by the review.[510]

[edit] September 1, 2015: Greg Garland Says Phillips 66 Has Cut Oil-By-Rail Shipments

Greg Garland Says Phillips 66 Has Cut Oil-By-Rail Shipments. Reuters reported on September 1, 2015 that oil tank cars - a year ago sought-after to haul crude from North Dakota to New Jersey - now stand idle as a result of two converging trends: the reversal in U.S. shale oil production and the completion of new pipelines. Phillips 66 has cut oil-by-rail shipments. "We actually set cars on the siding. We brought imported crudes in the system," CEO Greg Garland told investors on July 31, 2015. On September 3, 2014, Greg Garland told analysts at the Barclays CEO Energy-Power Conference that Phillips had ordered another 500 railcars to increase its fleet to 3,700 railcars. which would allow it to eventually move up to 185,000 barrels per day (bpd) of North Dakota Bakken crude oil to its refineries on the East and West coasts. Photo: Railroad Tank Cars by San Diego Model Railroad Museum Flickr Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)

Reuters reported on September 1, 2015 that oil tank cars - a year ago sought-after to haul crude from North Dakota to New Jersey - now stand idle as a result of two converging trends: the reversal in U.S. shale oil production and the completion of new pipelines. Big rail lines, such as Berkshire Hathaway-owned BNSF Railways or Union Pacific are losing what used to be their fastest-growing source of new traffic; refiners such as PBF Energy are left with millions of dollars worth of unused rolling stock; and leasing firms such as Trinity Industries and Greenbrier Companies Inc have seen monthly rates fall to a third of peaks above $2000 per car.

Phillips 66 has cut oil-by-rail shipments. "We actually set cars on the siding. We brought imported crudes in the system," CEO Greg Garland recently told investors.[511][512]

On September 3, 2014, Greg Garland told analysts at the Barclays CEO Energy-Power Conference that Phillips had ordered another 500 railcars to increase its fleet to 3,700 railcars. which would allow it to eventually move up to 185,000 barrels per day (bpd) of North Dakota Bakken crude oil to its refineries on the East and West coasts.[513]

[edit] August 31, 2015: Community Meets to Discuss Complaints Over Lack of Community Notification After August 2 Fire at Phillips 66's Rodeo Refinery

The Contra Costa Times reported on August 31, 2015 that there will be a public meeting on September 8, 2015 in Crockett, California to discuss complaints over a lack of community notification after the fire at Rodeo Refinery on August 2, 2015. Margaret Faria of the Crockett Improvement Association, which is organizing the community meeting, said she is not aware of any communication from the refinery during the incident or that its warning siren ever sounded. "I haven't found a single person who got a phone call or heard the siren go off," Faria added. Tony Semenza of the Community Awareness Emergency Response group will attend the meeting, the improvement association said in a news release,? and representatives of Phillips 66 have been invited as well.[514]

[edit] August 31, 2015: FCC Units Running at Reduced Rates at Phillips 66's Wood River Refinery Until Collapsed Cooling Tower Replaced

Reuters reported on Augusut 31, 2015 that Phillips 66 is running both its gaoline-making FCC units at reduced rates at the Wood River Refinery following collapse of a colling tower on August 25, 2015, according to sources familiar with operations at the refinery. The FCC units will continue to run at reduced rates until Phillips finds a temporary replacement for the collapsed water tower.[515]

[edit] August 31, 2015: Phillips Says Talks With United Steelworkers Union at Alliance Refinery Are Ongoing

Reuters reported on August 31, 2015 that Phillips 66 said on August 31, 2015 that its talks with the United Steelworkers (USW) for a contract covering the unions hourly workes at Alliance Refinery were continuing. "We have a signed agreement with the union to extend the existing contract at the Alliance Refinery through September 11, said Phillips 66 spokeswoman Lara Burhenn. "In the meantime negotiations will continue in good faith."[516]

[edit] August 28, 2015: Hugh Pickens Asks Congressman Frank Lucas His Position on Lifting the Ban on the Export of Crude Oil from the United States

US Congressman Frank Lucas held a town hall meeting in the Civic Center of Ponca City on August 28, 2015 to discuss issues with interested citizens. Lucas discussed the Iran Nuclear deal, the budget deficit, and the presidential race and then took questions from the audience.[517] The first question was from Hugh Pickens who asked Congressman Lucas where he stood on the question of lifing the ban on the export of crude oil from the United States. Congressman Lucas said that he was strongly in favor of lifting the ban, that he expected the bill to come before Congress later this year, and that he would vote in favor of lifting the ban.

[edit] August 28, 2015: Phillips Reports FCCU Regenerator Malfunction at Ponca City Refinery

Phillips Reports FCCU Regenerator Malfunction at Ponca City Refinery [518]

[edit] August 28, 2015: Workers at Alliance Refinery Reject Phillips Contract Offer

Workers at Alliance Refinery Reject Phillips Contract Offer. Union workers at Phillips 66's Alliance Refinery rejected a contract offer from Phillips on August 28, 2015, according to an official at the United Steelworkers (USW) which represents the refinery's hourly employees. The workers have continued working on an extension to a previous contract and contract talks continue, said John Link, assistant to the USW Distrcit 13 director.Photo by eustatic Flicker Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

Reuters reported on August 28, 2015 that union workers at Phillips 66's Alliance Refinery rejected a contract offer from Phillips on August 28, 2015, according to an official at the United Steelworkers (USW) which represents the refinery's hourly employees. The workers have continued working on an extension to a previous contract and contract talks continue, said John Link, assistant to the USW Distrcit 13 director. The USW reached a national four-year agrrement with the USW in March, 2015 but the national agreement has to be paired with an agreement with employees at Alliance Refinery over local issues to make the contract for hourly workers at the refinery.[519]

[edit] August 28, 2015: Warren Buffett Reports $4.5 Billion Stake in Phillips 66

Bloomberg reported on August 28, 2015 that Warren Buffett’s Berkshire Hathaway Inc. disclosed a $4.5 billion stake in Phillips 66 contradicting an earlier story on august 17, 2015 that Buffett had sold all his shares in Phillips. Earlier this month, Berkshire didn’t disclose an investment in Phillips 66 at the end of the second quarter. At the time, Buffett’s firm also said it had omitted some data that was reported confidentially to regulators. The Securities and Exchange Commission sometimes allows companies to withhold information from the public to limit copycat investing while a firm is building or cutting a position. Berkshire held almost 58 million shares after purchases, or more than 10 percent of the total outstanding, according to a regulatory filing issued Friday by Buffett’s Omaha, Nebraska-based company. Phillips 66 closed at $77.23 on Friday in New York. Buffett’s company formerly held more stock in the refiner. It used most of those shares to buy a business from Phillips 66 last year.[520]

[edit] August 28, 2015: Gasoline Unit Restarted after Cooling Tower Collapse at Phillips 66's Wood River Refinery

The St. Louis Post-Dispatch reported on August 28, 2015 that a 42,000 bpd fluid catalytic cracking unit was restarted on August 28, 2015 after the collapse of a cooling tower at Phillips 66’s Wood River refinery put the unit our of service on August 24, 2015. The restart of a gasoline-making unit was underway on the morning of August 28, 2015 after previous attempts to bring the unit online were unsuccessful because of technical glitches said a source familiar with plant operations. The other FCCU unit remained at reduced rates, the source added.[521]

[edit] August 26, 2015: Cooling Tower Collapses at Phillips 66's Wood River Refinery Shutting Down 42,000 bpd FCCU

The St. Louis Post-Dispatch reported on August 25, 2015 that a cooling tower at Phillips 66’s Wood River refinery collapsed on August 24, 2015, forcing the plant to shut a 42,000 bpd fluid catalytic cracking unit, or FCCU and run a second one at reduced rates, said a source familiar with plant operations. Workers at the refinery may try to restart the FCCU, within the next 48 hours, the source said. The refinery has two such units with capacity of 42,000 and 48,000 bpd, according to IIR Energy data on Eikon. It was not clear which unit was affected. “The Wood River Refinery had an operational upset resulting from a loss of cooling from an upset cooling water tower,” said Phillips 66 spokeswoman Melissa Erker in an emailed statement. “There were no injuries to employees or offsite impacts," adding that the company was “working to resupply cooling water to the impacted units using redundant cooling water supply from other towers.”[522]

[edit] August 17, 2015: Ponca City Refinery Begins Two Month Overhaul

Reuters reported on August 17, 2015 that contractors at the Ponca City Refinery have begun preliminary work ahead of a planned two-month-long overhaul set to begin Sepember 1. According to trade sources a 33,000 bpd crude topping unit will be overhauled from September 1 to September 30 and a 76,000 bpd crude distillation unit will be shut for work from October 1 and the first week of November. A 26,000 bpd gasoline producing fluidic catalytic cracking unit, a 20,000 bpd catalytic reformer, and a 35,000 bpd hydrotreater will also be overhauled beginning on October 1.[523]

[edit] August 17, 2015: Warren Buffett Sells All His Shares in Phillips 66

The Houston Business Journal reported on August 17, 2015 that Warren Buffett’s Berkshire Hathaway Inc. sold off all of its shares in Phillips 66 during the second quarter. Berkshire Hathaway had held nearly 7.5 million shares of Phillips 66.[524]

[edit] August 13, 2015: Garland Says Phillips 66's Commitment to Bartlesville Remains Strong

Greg Garland Speaks to Bartlesville Chamber of Commerce. Phillips 66 Chief Executive Officer, Greg Garland told attendees at a forum sponsored by the Bartlesville Chamber of Commerce on August 13, 2015 that Phillip 66's commitment to Bartlesville remains strong. After the forum Garland discussed Phillips 66 and Ponca City with Ponca City resident Hugh Pickens. Pickens asked Garland what it would take for Ponca City to qualify for a grant from Phillips 66 to promote science in the Ponca City School System, like the grant of $1.7 million that Phillips 66 gave to Bartlesville Public Schools in 2014 to create new innovative laboratories on three school campuses in Bartlesville to support science, technology, engineering and math. Garland responded that he would look into the matter. Photo: Dr. S. J. Pickens

Bartlesville Radio reported on August 13, 2015 that Phillips 66 Chief Executive Officer, Greg Garland told attendees at a forum sponsored by the Bartlesville Chamber of Commerce on August 13, 2015 that the company's commitment to Bartlesville remains strong. Garland showed a video highlighting the company's involvement in Bartlesville from the Phillips 66 museum and all of its facilities in Bartlesville to the large number of local employees and its support of some 90 non-profit organizations in the area.[525] “We wouldn’t be who we are without the amazing employees of this company,” said Garland. “Bartlesville is a very important part of the legacy, the culture of our company… It is a vital part of the operations of Phillips 66 today… Bartlesville, as much as any place I go, exemplifies our values of safety, honor and commitment… Our commitment runs deep here.”[526]

According to Garland, Phillips 66 is committed to the betterment of the local economy and education systems. Last year, Garland announced a $1.7 million grant to Bartlesville Public Schools to build Phillips 66 Innovation Labs at Bartlesville High School, Madison Middle School and Central Middle School. The labs are intended to enhance local education in science, technology, engineering and math (STEM). Garland said that the donation is just one way Phillips 66 can demonstrate its commitment to Bartlesville and the employee base here. “Bartlesville is so unique. You have such a cadre of highly-educated people here in this town that are willing to go back (to the schools), and I think the STEM labs will create opportunities for people to go in there and encourage people in science, technology, engineering and math,” Garland told the Bartlesville Examiner-Enterprise. “I think that education is one of the keys. We have to have exemplary schools in our communities so that our employees choose to live in those communities. We want to make sure they have good options. We are particularly interested in encouraging students. We want them to finish school, get their high school degree and go on to college, if that is what they want to do. We want them to be interested in science, technology, engineering and math.”[527]

[edit] August 10, 2015: Shippers Will Have Access To Ponca City Refinery Through Double H Pipeline System

Kinder Morgan Transports Powder River Basin Barrels to Guernsey, Wyoming on Its Double H Pipeline System Kinder Morgan, Inc. today announced it has begun to receive Powder River Basin volumes into its Double H pipeline system via a newly constructed connection near Douglas, Wyoming for crude oil deliveries to Guernsey, Wyoming, increasing its system capacity to approximately 99,000 b/d. The Powder River Basin project is the result of the successful open season held earlier this year on the local Double H pipeline and the joint Hiland/Pony Express systems which resulted in additional commitments to the Double H pipeline from sources in North Dakota and Wyoming. Kinder Morgan’s Double H pipeline is supplied by the Market Center Gathering system in the Bakken and terminates near Guernsey. The 485-mile pipeline transports crude oil from the Dore Terminal in North Dakota and the Albin Terminal in Montana to Guernsey. At Guernsey, Double H anticipates placing delivery connections to the Plains All American Pipeline Guernsey Station and Sinclair Guernsey Terminal into service in the third quarter of 2015 to provide increased connectivity to local and regional markets. Shippers also have access via an interconnect with the Pony Express Pipeline for transportation to the Phillips Refinery in Ponca City, Oklahoma or the Deeprock Terminal in Cushing, Oklahoma. Double H was placed in service in February 2015 according to a report from Reuters on August 10, 2015.[528]

[edit] August 2, 2015: Fire Extinguished at Rodeo Refinery

A small fire on August 2, 2015 at Phillips Rodeo Refinery spurred the county health department to issue a public health advisory for the towns of Rodeo and Crockett. Photo: Contra Costa Times. Courtesy of Jason Sutton

The Contra Costa Times reported on August 2, 2015 that a small fire on August 2, 2015 at Phillips Rodeo Refinery spurred the county health department to issue a public health advisory for the towns of Rodeo and Crockett. The Contra Costa County incident warning system issued an alert just before 3:15 p.m. that staff concerned with hazardous materials were responding to a report of a fire at the refinery. County officials advise people with respiratory sensitivities to avoid the area or stay inside and rinse any irritated area with water but added that most people should not be affected. No injuries were reported, and the fire's cause is under investigation.[529]

[edit] July 31, 2015: Ponca Refinery Earns $71 million, Continues as Phillips 66's Most Profitable Refinery

Phillips 66 reported their second quarter earnings for 2015 on July 31, 2015 and the results of analysis of earnings for Phillips' Refining Business Segment show the Ponca City Refinery continues as the most profitable of Phillips' fifteen worldwide refineries. The Ponca City Refinery earned $71 million for Phillips in the second quarter of 2015 for an annualized profit of $284 million. Phillips' Wilmington Refinery in Wilmington, CA was the second most profitable with $69 million in earnings for Phillips in the secondquarter of 2015 with an annualized profit of $276 million.[530]

The annualized profit of Phillips 66's five most profitable refineries for the second quarter of 2015 are:[531]

See Appendix 4 for detailed calculations:

[edit] July 25, 2015: Oil is Down but Garland's Pay is Up

The Houston Chronicle reported on July 25, 2015 that despite domestic oil's long and lingering swoon that began last summer, Phillips CEO Greg Garland's pay is up for 2014. Garland ranked No 2 in pay for CEO's of publicaly traded companies just behind Ryan Lance of ConocoPhillips.[532] Photo: Houston Chronicle

The Houston Chronicle reported on July 25, 2015 that despite domestic oil's long and lingering swoon that began last summer, Phillips CEO Greg Garland's pay is up for 2014. Garland ranked No 2 in pay for CEO's of publicly traded companies just behind Ryan Lance of ConocoPhillips.[533] Phillips 66's Board of Directors cut Chief Executive Greg Garland's bonus pay by 35 percent in 2014, citing market conditions and stock performance. While the company performed well against financial and operational targets, the filing states, "market conditions and stock performance at the end of 2014 did not, in the Compensation Committee's view, justify a full payout" of the incentive pay that Garland and other top executives were eligible to receive.[534]

[edit] July 17, 2015: Ponca City Refinery Reports Automatic Shutdown of Gasoline Processing Unit

The Ponca City News reported on July 17, 2015 that an automatic shutdown of one of the gasoline processing units occurred on the morning of July 17, 2015. “A small transformer fell but the safety system worked correctly," said refinery manager Tim Seidel. “The people involved with that work were moved to a different part of the refinery so operations could focus on safely shutting down the unit. We have several tiers of evacuations. Whenever we have an unplanned shutdown of any process unit we sound an alarm in that area that shuts down any non-critical maintenance work and also lets everyone know that those operators are busy with the shutdown and to not bother them. We did that as part of our protocol." No injuries or damage to equipment were reported.[535]

[edit] July 17, 2015: Phillips Reports Upset at Ponca City Refinery

Phillips reported an upset at Ponca City Refinery on July 17, 2015 according to a report from Reuters on July 22, 2015.[536]

[edit] July 15, 2015: Ponca Playhouse Presents the Story of EW Marland

Ponca Playhouse is presenting "The Broken Statue," a partially fictionalized version of the story of EW Marland, Lydie Marland, and the story of birth of the oil industry in North-Central Oklahoma by Oklahoma playright Bob Perry. This is the third time that Ponca Playhouse has presented the play. Ponca Playhouse previously produced the play in 2012 and 2013 to sold-out audiences. "We are presenting the play for a third time in Ponca City due to public demand," says Hugh Pickens, co-producer of the play along with his wife, Dr. S. J. Pickens.[537]

The Ponca City News reported on July 15, 2015 that Ponca Playhouse is presenting "The Broken Statue," a partially fictionalized version of the story of EW Marland, Lydie Marland, and the story of birth of the oil industry in North-Central Oklahoma by Oklahoma playright Bob Perry. This is the third time that Ponca Playhouse has presented the play. Ponca Playhouse previously produced the play in 2012 and 2013 to sold-out audiences. "We are presenting the play for a third time in Ponca City due to public demand," says Hugh Pickens, co-producer of the play along with his wife, Dr. S. J. Pickens. Only 960 seats are available for the 2015 presentation. Tickets are available by calling The Ponca Playhouse. The performances will be July 23, 24, 26, 26, 30, 31 and Aug. 1 and 2. “Although partially fiction, ‘The Broken Statue’ helps provide the public with an insight that feeds their curiosity of the life and times of E.W., Virginia, George and Lydie Marland and their contemporaries. The play gives a glimpse of the extravagant glory days of the 1910s and 1920s as they existed in Oklahoma,” said David Keathly, executive director of the Marland Mansion.[538]

[edit] July 3, 2015: Phillips Reports Startup, FCCU Emissions at Ponca City Refinery

Phillips reported the startup and FCCU emissions at Ponca City refinery according to reports from Reuters on July 8, 2015.[539]

[edit] June 29, 2015: Greg Garland is No 1 Houstonian to Know in 2015 Despite Phillips Decrease in Revenue and Stock Price

B. Candace Beeke wrote in Houston Business Journal on June 29, 2015 that Greg Garland, CEO and chairman of Phillips 66 — is still holding tight to the No. 1 spot of the "Top 100 Public Companies" based in Houston. Phillips 66 "saw one of the largest decreases in revenue, stock price and assets on The List, year over year," writes Beeke. "Despite that, it’s still No. 1 in revenue and high on the list of total assets in fiscal year 2014."[540]

[edit] June 17, 2015: Governor Fallin Appoints Tim Seidel to University Center Board of Directors

The Tulsa World reported on June 16, 2015 that Oklahoma Governor Mary Fallin has appointed Ponca City Refinery Manager Tim Seidel to the Board of Directors of the Ponca City University Center. Seidel will fill out the unexpired term of former refinery manager Pete Stynes who transferred to Phillips' troubled refinery in Borger, Texas in April, 2014. Seidel's term will expire in June 2019. Siedel currently serves on the board of directors at RCB Bank, the board of the Oklahoma Oil and Gas Association, the board of Jupiter Sulfur and the board of Standing Bear Native American Foundation. Seidel also serves as vice president for the Conoco and Phillips 66 Heritage Museums. Seidel came to Ponca City in 2012 after serving as site manager at Phillips' Santa Maria Refinery.[541]

[edit] June 15, 2015: Planned Work at Ponca City Refinery Complete

Reuters reported on June 15, 2015 that according to Phillips, planned maintenance at the Ponca City Refinery has been completed.[542]

[edit] June 14, 2015: Phillips 66 Science, Technology, Engineering and Mathematics Lab at Bartlesville High School Will Be Delayed

The Bartlesville Examiner-Enterprise reported on June 13, 2015 that completion of the Phillips 66 Science, Technology, Engineering and Mathematics Lab at Bartlesville High School will be delayed. According to Scott Ambler, architect of the construction projects at the expanded BHS campus, sub-contractor Estruct LLC — which laid the concrete slab in the new science wing and laid the slab on both floors of the ninth-grade center, commons area and 10th-grade classrooms — did not level the concrete appropriately. Because extra crews and resources are going to be used to correct the problem, Nabholz Construction said completion of the Phillips 66 Science, Technology, Engineering and Mathematics Lab will be delayed. The STEM Lab is being built in the basement of the main building at BHS, where the former cafeteria was located. Officials say the STEM Lab will most likely not be ready at the very start of the school year, but will be completed shortly afterward.[543]

[edit] June 8, 2015: Planned Maintenance Underway at Ponca City Refinery

Nasdq reported on June 8, 2015 that planned maintenance is underway at the Ponca City Refinery. Phillips has planned maintenance underway at five of its worldwide refineries: Humber Refinery, Wilmington Refinery, Ponca City Refinery, Wood River Refinery, and Whitegate Refinery. Phillips did not indicate whether fuel output may be impacted, and representatives from Phillips 66 weren't immediately available to comment.[544]

[edit] May 29, 2015: Phillips Explains Leak and Flare at Ponca City Refinery

The Ponca City News reported on May 29, 2015 that residents in the south part of Ponca City were startled by two large bangs from the Ponca City refinery caused by a small leak around a pipe flange that allowed about 3 barrels of gas to escape. Refinery Manager Tim Seidel the gas was clean and did not contain sulphur or any other componenets that need to be recovered. The refinery lost some production while repairs are being made but there was no danger to the refinery or the surrounding area.[545]

[edit] May 19, 2015: Phillips is Committed to Bartlesville and We're Here to Stay Says Phillips Vice President of Technology

The Bartlesville Examiner-Enterprise reported on May 19, 2015 that Merl Lindstrom, vice president of technology for Phillips 66, told members of the Bartlesville Noon Rotary Club that Bartlesville is "a great place, we really like Bartlesville, and suffice to say, we’re here to stay." Lindstrom noted that other peer companies have to contract their research to third parties because they have nothing comparable to the state-of-the art research center, which was first established by Phillips Petroleum Company in 1950. Around 1,000 researchers and technicians, including Phillips 66 employees and those from ConocoPhillips and Chevron Phillips Chemical Company, work at the 440-acre research campus, located just west of the city. “We have a very unique portfolio relative to our peers. We’re very diverse, very broad, and if you compare us to our peers and some of the other refiners, we’re the only one that has a research and development organization,” said Lindstrom on Monday afternoon. “That’s something I’m certainly proud of and something that we use to our advantage.”

Lindstrom said a premier testing site for polyethylene research is being built on the campus that has been a hub of research and development for decades. The facility will be dedicated to further improving products, processes and technologies that can be applied to the company’s worldwide operations. “It’s another anchor for the research center to be there for a very long time,” Lindstrom said about the new plant, which is scheduled to start operating in 2017.

Lindstrom added that Phillips 66 is committed to investing in the Bartlesville community. In 2014, the company contributed nearly $2 million toward education, Bartlesville Regional United Way and the Sooner Park Play Tower, among other community causes.[546]

[edit] April 30, 2015: Garland Says Turnaround at Ponca City Lowered Profit

Greg Garland announced during the 2015 first quarter earnings conference call that profits in the Central Corridor were flat compared to last quarter as improvements in secondary products were mostly offset by lower volumes due to plant turnarounds at the Ponca City and Borger refineries.[547]

[edit] April 30, 2015: Ponca Refinery Earns $57 million, Continues in Top Slot as Phillips' Most Profitable Refinery

Phillips 66 reported their first quarter earnings for 2015 on April 30, 2015 and the results of analysis of earnings for Phillips' Refining Business Segment show the Ponca City Refinery is still the most profitable of Phillips' fifteen worldwide refineries. The Ponca City Refinery earned $57 million for Phillips in the first quarter of 2015 for an annualized profit of $230 million.[548]

The annualized profit of Phillips 66's five most profitable refineries for the first quarter of 2015 are:[549]

See Appendix 3 for detailed calculations:

[edit] April 24, 2015: Maintenance Continues on 90,000 b/d Hydrotreater at Ponca City Refinery

Platts reported on April 24, 2015 that maintenance continues on a 90,000 b/d hydrotreater at Phillips 66's Ponca City, Oklahoma, refinery. A hydrotreater reduces sulfur and nitrogen to produce high specification distillates.[550]

[edit] April 17, 2015: Phillips 66 says 25,000 Gallons of Diesel Leaked near Wood River Refinery

25,000 Gallons of Diesel Leaked near Phillips 66's Wood River Refinery. Phillips 66 estimates about 25,000 gallons of diesel fuel leaked on April 17, 2015 into the Cahokia Canal, a waterway that drains into the Mississippi River prompting the Coast Guard to close a 35-mile section of the river. Photo: Crews boom an area affected by a diesel fuel leak in Hartford, IL. Fox News.

The St. Louis Post-Dispatch reported on April 17, 2015 that Phillips 66 estimates about 25,000 gallons of diesel fuel leaked on April 17, 2015 into the Cahokia Canal, a waterway that drains into the Mississippi River prompting the Coast Guard to close a 35-mile section of the river. Phillips 66 discovered a leak in a pipeline that runs from its storage terminal to a barge loading dock at about 8:45 a.m.. The pipeline was shut off immediately and by 10 a.m. the company confirmed the leak had stopped. The barge loading dock is offline while the company continues to investigate the cause of the leak. Illinois Environmental Protection Agency spokeswoman Kim Biggs in an email her agency, the U.S. EPA and the U.S. Coast Guard were all on site responding to the spill.[551]

The spill has forced the closing of the river to boat and barge traffic from Hartford, Illinois, to beyond the Jefferson Barracks Bridge. Officials don't want the boats to transport any of the spilled fuel farther downstream. The Coast Guard has not yet discovered any birds or fish that have been harmed.[552]

[edit] April 13, 2015: Oppenheimer Says Phillips May Divest Refining Assets in the Future

Anthony Sanfilippo wrote at Benzinga on April 13, 2015 that Oppenheimer issued a company update on Phillips 66 after analysts met with company management and that Oppenheimer believes that Phillips 66 may divest refining assets in the future while increasing their leverage to fund future growth. Oppenheimer Analysts Fadel Gheit and Luis Amadeo wrote, “PSX has a more favorable view on midstream, which is relatively stable compared to refining and generates returns on capital in the 10-12 percent range vs. 8-10 percent for refining. In the long term, PSX believes that refining margins will be flat and challenged. In the near term, DCP is facing several headwinds from the decline in commodity prices, the downgrade of its credit rating, and a capital-constrained partner. PSX would like to inject capital into DCP but doesn't want to have to consolidate the debt.”[553]

[edit] April 2, 2015: Ponca City Employees In Bartlesville Affected By ConocoPhillips Cut

The Ponca City News reported on April 2, 2015 the ConocoPhillips' reduction in force has affected some employees commuting from Ponca City to Bartlesville for a number of years. A Ponca City woman employee, who did not want to be identified told The News, she was terminated from ConocoPhillips and sent home with others from the Bartlesville operations by cab. The 28-year employee, who had car-pooled, was terminated April 1, 2015 and transported back to Ponca City in a cab paid for by the company. A spokesman for ConocoPhillips said, “Within Bartlesville, less than 4 percent of our employees will be impacted by these workforce reductions. Anytime you have to do these kinds of reductions, it’s always very difficult.”[554]

[edit] March 23, 2015: Phillips Reports FCCU Regenerator Upset at Ponca City Refinery

Phillips 66 reported an FCCU regenerator Upset at Ponca City Refinery on March 23, 2015.[555]

[edit] March 23, 2015: Operations at Ponca City Refinery Have Improved with Crude from Nearby Mississippian Lime Shale

Reuters reported on March 23, 2015 that Phillips 66 has added trucks and offloading equipment at several of its refineries including the Ponca City refinery to help reduce its reliance on oil coming from Cushing, Oklahoma, the nation's biggest crude oil crossroads and storage hub. At Cushing, a growing volume of Canadian oil sands is often mixed with lighter domestic shale crude, resulting in blends that can be less profitable than similar oil fresh from the field. While the blends of these crudes may technically meet the API gravity ceiling of 42 at Cushing, industry players say the mixes can be inconsistent in makeup and generate less income because the most desirable stuff is often missing. The blends tend to produce a higher proportion of fuel at two ends of the spectrum: light ends like gasoline, demand for which has dimmed in recent years, and lower-value heavy products like fuel oil and asphalt. What's missing are middle distillates like diesel, where growing demand and profitability lies. "You end up with a dumbbell-like material rich in front and back ends, neither of which refineries find most profitable," said Dennis Sutton, a former chemist and retired crude quality expert with Marathon Petroleum Corp who now heads the Crude Oil Quality Association.

Phillips 66 executives say operations at its 200,000-barrel-per-day refinery in Ponca City, Oklahoma, only 62 miles (100 km) from Cushing, have improved since it began getting more of its crude directly from wells in the Mississippian Lime shale patch nearby. "That's really the key," Phillips 66 President Tim Taylor told Reuters. "With Cushing, you can get a blended barrel that hits the spec, but it's not as consistent as you'd like."[556]

[edit] March 12, 2015: Union Says Tentative Agreement Reached to End US Refinery Strike

Reuters reported on March 12, 2015 that the United Steelworkers union and oil companies have reached a tentative deal to end the largest U.S. refinery strike in 35 years, say people familiar with the negotiations. The tentative contract contains language that addresses worker fatigue, which is tied to accidents, and the use of contractors versus unionized labor. It also safeguards gains made in previous contracts, the union and sources said. They added that annual wage increases would be 2.5 percent in the first year, 3 percent each in years two and three, and 3.5 percent in the fourth year. The deal, which still needs to be ratified, may not end strikes right away at all refineries that have suffered walkouts as local union chapters could still need to work out pending issues. "We salute the solidarity exhibited by our membership," said USW International President Leo Gerard. "There was no way we would have won vast improvements in safety and staffing without it."[557]

[edit] March 11, 2015: Phillips Reports FCCU Regenerator Start-Up at Ponca City Refinery

Phillips 66 reported an FCCU Regenerator start-up at Ponca City Refinery on March 11, 2015.[558]

[edit] March 11, 2015: Union Signals Possible Proposal Coming That Will End US Refinery Strike

Reuters reported on March 11, 2015 that the United Steelworkers union (USW) signaled that lead refinery owner representative Shell Oil Co may offer a possible settlement in the coming days that could end the largest refinery strike in 35 years. In a message issued on Wednesday night, the union said it was assembling its policy committee, which represents the rank and file, to review proposals from industry during contract talks. The national agreement being negotiated by the USW and Shell Oil will set the floor on pay and benefits as well as set standards on some safety issues. That agreement must be combined with agreements on local issues at each refinery and chemical plant and then voted on by the membership of the local union for the contract to take effect at each site. At the striking plants, it would likely take about two weeks for approval of a contract and the return of workers to their jobs.[559]

[edit] March 9, 2015: Board of Directors Cuts CEO Greg Garland's Bonus By 35 percent after Phillips' Poor Stock Performance in 2014

Phillips 66's Board of Directors cut Chief Executive Greg Garland's bonus pay by 35 percent in 2014, citing market conditions and stock performance. While the company performed well against financial and operational targets, the filing states, "market conditions and stock performance at the end of 2014 did not, in the Compensation Committee's view, justify a full payout" of the incentive pay that Garland and other top executives were eligible to receive. Photo: ConocoPhillips

Reuters reported on March 9, 2015 that Phillips 66's Board of Directors cut Chief Executive Greg Garland's bonus pay by 35 percent in 2014, citing market conditions and stock performance. While the company performed well against financial and operational targets, the filing states, "market conditions and stock performance at the end of 2014 did not, in the Compensation Committee's view, justify a full payout" of the incentive pay that Garland and other top executives were eligible to receive.

Garland received a total of $24.5 million for the year, up from $19.8 million in 2013, driven largely by a higher value calculated for future pension payments. Garland's base salary rose to $1.51 million in 2014 from $1.44 million in 2013. But the value of incentive payments to Garland fell to $2.66 million in 2014 from $4.11 million in 2013. [560]

[edit] February 23, 2015: USW Workers on Strike at Twelve Refineries Nationwide

Reuters reported on February 23, 2015 that as of February 23, 2015 USW workers are on strike at the following twelve refineries and petrochemical facilities involving 6,000 workers. Motiva issued a statement saying that its labor contract with the union at the Port Arthur facility expired at midnight on Friday and that contracts for its facilities in Norco and Convent, Louisiana expired on Saturday. Strike organizers said that workers remained in place at the two other Motiva refineries in Louisiana as of Monday morning. The refineries affected nationwide include[561]

[edit] February 21, 2015: Phillips Plans to Restart FCCU at Ponca City Refinery After Unit Overheated

Phillips shut the fluid catalytic cracking unit (FCCU) at its Ponca City, Oklahoma refinery this week after the unit overheated, according to a person familiar with the plant’s operations. The refinery plans to restart the unit Saturday, the person said. Phillips previously said planned maintenance was underway at the plant.[562]

[edit] February 21, 2015: Strike Expands to Additional Refineries Including the Nations Largest Refinery at Port Arthur, Texas

Reuters reported on February 21, 2015 that US refinery strike widened as workers walked off their jobs at the nation's largest refinery, Motiva's 600,250 barrel per day (bpd) refinery in Port Arthur, Texas. The strike may complicate operations at the Port Arthur refinery, which failed to restore its second largest crude distillation unit (CDU) to full production after restarting on Friday following a three-day shutdown to fix leaking piping, sources told Reuters. The refinery's largest CDU, which has a rated capacity of 325,000 bpd is running at about 200,000 bpd, the sources said, because a 60,000 bpd hydrocracking unit is shut due to a malfunction. The hydrocracker produces motor fuel, primarily diesel, which has become a lucrative export for U.S. refiners. Motiva is also overhauling the 92,000 bpd gasoline-producing fluidic catalytic cracking unit at the refinery. It is scheduled to restart in the first half of March. It was shut in early January.

The USW also gave notices on Friday of strikes to begin in 24 hours at Motiva's 235,000 bpd Convent, Louisiana and 238,000 bpd Norco, Louisiana refineries and the Shell Oil Co chemical plant in Norco, the union said. "The industry’s refusal to meaningfully address safety issues through good faith bargaining gave us no other option but to expand our work stoppage," USW International President Leo Gerard said in a statement. A Shell spokesman said the company was disappointed by the Port Arthur walkout and strike notices to the Louisiana plants. "We believe this move sets the wrong tone for both parties to move forward and reach an agreement," said Shell spokesman Ray Fisher. "We remain committed to continued safe operations and productive negotiations."[563]

[edit] February 16, 2015: US Refinery Strike Could Spread Over Safe Staffing

Reuters reported on February 16, 2015 that with bout 5,200 workers from nine refineries walking picket lines, a strike by US refinery workers that entered its 16th day could spread if there is no progress in talks this week with plant owners on safe staffing levels, said the lead negotiator for the United Steelworkers union (USW). "The longer that this strike rolls on, the more people that will be affected," said Gary Beevers, USW international vice president. For the union, the use of non-union contractors and lack of an industry-wide policy on preventing worker fatigue are key obstacles to safe staffing. "We're going to talk about safe staffing one way or the other," Beevers said.[564]

[edit] February 15, 2015: Managers Bunk Down at US Refineries Amid Safety Concerns as Strike Enters Third Week

Reuters reported on February 15, 2015 that US oil refinery managers are going to the mats, sleeping on recently purchased mattresses inside rental trailers inside the refineries, during the biggest fight with union workers in 35 years, as the strike enters its third week and experts and some employees say raises concerns over safety and operations. John Ostberg, a non-union control engineer who works in the main computerized control center at Toledo, quit his job on Monday weeks before he was scheduled to retire. For months, Ostberg has been warning his bosses in emails about their plans to rely on replacement workers and supervisors if a strike occurred. He feared they were not properly trained, or too far removed from the frontlines, to respond to unit upsets and other problems that can escalate quickly without experienced intervention. “Management says it’s safe. I disagree,” said Ostberg a 56-year-old engineer who worked at Toledo since 1980 and helped run the refinery operating center, known locally as the ROC, the heart of the plant. Behind a blast-proof wall, Ostberg and others monitor the dozens of units that populate the refinery to ensure things are running properly and alert USW workers manning the units when they are not. “I sit behind a blast-proof wall, so I’m not worried about my safety," says Ostberg. "But I fear for everyone else.”

In dozens of interviews with local USW workers, craftsman and experts, a portrait of the day-to-day role they play emerges: monitoring large electronic boards that detect problems, turning valves, checking the quality of refined products and overseeing work permits. But their biggest contribution, the people say, is serving as the refinery’s frontline defense when things go wrong. At least three of the nine U.S. oil refineri