US refineries face operational, workforce risks from delayed planned maintenance - S&P Global
Delayed maintenance schedules tighten labor market, Hurricane, storm-related shutdowns impact operations
The coronavirus pandemic may be officially over, but the longer-term impacts are lingering in the US refining sector, which has seen a spate of accidents over the past nine months. Some industry players put the onus of recent refining accidents and emissions events on plant maintenance delayed by the coronavirus in 2020, compounded by a return of demand in 2021 as lockdowns ended, S&P Global reported.
As the US economy began to reopen in late 2021 from coronavirus-related lockdowns, rapidly rising demand in 2022 pushed refiners to operate at record high utilization rates to meet demand and make up for US refinery capacity closed by the pandemic, pushing out turnaround schedules into 2023 for many US refiners.
"And now you've got this real cluster of shutdowns and turnarounds," said Mike Smith, chair of the National Oil Bargaining Program for the United Steelworkers, in a May 30 interview.
"Now that we are seeing this turnaround cycle, obviously it's a dangerous time shutting down, starting up units, but it's a necessity. And I believe it's definitely needed and we need to do it safely," he said.
"Now you have refineries and plants that may not have had the maintenance necessary. And now they are running more than they normally ran for months and years at a time. So I think the plants are sending a message to us that they need maintenance," he added.
Heavy Q1 refining maintenance
Virtually every US refiner has attributed their heavier-than-normal turnaround schedule in the first half of 2023 to return-to-normalized turnaround schedules disrupted by the pandemic.
US independent refiner PBF Energy said on its first quarter results call that it conducted extensive planned turnarounds and work across its six-refinery system in Q1. And plans to conduct extensive maintenance and multiple turnarounds for the remainder of 2023, moving forward to a more a normalized turnaround schedule in 2024.
"And now that we are seeing this turnaround cycle obviously it's a dangerous time shutting down, starting up units. But it's a necessity and I believe it's definitely needed and we need to do it safely," Smith added.
Turnarounds and planned maintenance at US refineries are often scheduled years in advance and orchestrate hundreds of refinery workers with thousands of contract workers to complete the task, said Smith. The USW represents about 30,000 workers in refineries, pipelines, petrochemical plants and terminals across the United States.
And by the nature of the business, refinery incidents are bound to happen.
"Refineries are very complex, running 24 hours per day at high pressures and high temperatures. No matter how good the safety procedures are [and US refineries put a high degree of importance on safety], accidents are inevitable," said John Auers, managing director of Refined Fuels Analytics, the downstream affiliate of RBN Energy.
"Most of the time it is due to some human error, in many cases a series of errors. I don't think four fatal incidents over the past year define a pattern," he added.
