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Motiva ramping up to hire thousands of workers at Port Arthur refinery?

10/12/2009 7:35:00 PM
Predicted: 7,000 jobs
Local plant projects moving forward

Jerry Jordan
News Editor

Despite bleak news painting a picture of canceled projects and continued job losses across Southeast Texas, the opposite appears to be true, according to information from Motiva Enterprises, Eastman Chemical Company and TOTAL.

Over the past week, The Examiner has investigated reports of canceled expansions at the area’s petrochemical companies and found that thousands of workers will soon be needed to keep things moving forward.

First and foremost is Motiva Enterprises, which is adamant that its project never shut down and the company is ramping up to hire thousands of workers.

“Construction continues on the 325,000 barrel-per-day capacity expansion project at Motiva’s Port Arthur refinery, though on a new timetable given current market conditions,” said Nick Smallwood, Motiva Crude Expansion Project director. “The new production capacity is expected to be online in the first quarter of 2012.”

Following an extensive cost review earlier this year, Motiva officials announced in mid-March 2009 that the project would move forward. While economic conditions throughout the country impacted our industry, as well, Motiva completed its own due diligence on our expansion project and reaffirmed our plans, with some adjustments in timing, to invest in the energy sector of our country with this statement of continued support for the expansion project here in Port Arthur.

“A project of this magnitude required extensive work to be done as a result of the changes in the plan, and we are currently ramping up the efforts since making those adjustments. A new contracting strategy was recently finalized, and bid packages are in the hands of general contractors that should have the capacity to handle a project of this magnitude. In keeping with our commitment and interest to positively impact the local community, the general contractors are being provided information regarding our expectations that they engage local companies that have the capacity, safety records and other qualifications necessary to work on the project. During this process, we will also be ramping up with employment, and further information about that will be made public in the very near future.”

Smallwood said the project is subject to changes based on market conditions but at no point was it off the table.

“The pace of construction remains subject to change and is dependent on market conditions as well as safe, efficient and cost effective construction activity,” Smallwood said. “The refinery will be a world-class, state-of-the art facility. The expansion is designed to lower most types of emissions from refinery operations on a per barrel basis by utilizing advanced technology in all new system installations and replacing existing systems. Expansion plans call for decreasing emissions from present day levels for ozone precursors, specifically nitrogen oxides and volatile organic compounds.”

Smallwood’s comments were echoed by those of Pat Avery, manager of human resources and communications at TOTAL. Avery said their project has always been “full steam ahead” and rumors that it was shutting down were simply not true.

“Our project was never canceled and never slowed down,” Avery said. “We are on budget and on time and running it safely. We never slowed down at all. We are right on time.

“It is very frustrating and it feeds on itself when people assume that things are not progressing. And all it does is get people more and more upset, and it is just not true.

Avery said there isn’t much that she could do about the rumors and reports that all of the areas expansions projects had been put on hold. She said TOTAL has 2,800 construction workers and she has hired 88 full-time employees in the past six months.

“There is very little that you can do except depend on people like you to tell the real story,” Avery said. “I think some people get confused because they don’t understand the refining industry. They hear about one and think we are all shut down. I am not sure how the hysteria goes. But we were never shut down. It is going great out here.”

And the story is the same with Eastman Chemical Company, which is moving forward with a multi-billion dollar new construction project on Highway 69. Again, despite reports to the contrary, the project is moving forward, albeit at a slower pace than what the company had originally planned. They will miss a 2013 deadline they had hoped to hit that would have made the facility eligible for a federal tax credit, according to officials, but the project is important to Eastman.

“This is an important project for the company,” said Tracy Broadwater, Eastman spokesperson. “I think what you are referring to is comments that someone took from a presentation by our CFO, but at no time did we ever cancel this project. We are moving forward.”

Broadwater said surveyors were on-site last week and although the project will miss its original completion date, work is still ongoing.

Jim Rich, Beaumont Chamber of Commerce president, said he is frustrated by rumors that the economy is dying in Southeast Texas. He said he is aware there has been a slowdown, but the projects remain active.

“With Motiva, they kind of regrouped and they are back up and running,” Rich said. “You know they presented those numbers at the Rotary Club a week ago, and I think they may be up to 7,000 workers by next summer. Motiva is building something very unique that may never be built again. I never lost the optimism that we are the energy driver to the American economy. Although the national recession impacts us and tightening credit impacts us, we still provide something that the American economy very much needs and their projects take a long time to develop, a long time to build and you just don’t stop them. You might slow them down but you don’t stop them, and that bodes well for our economy. There is big thirst for energy, and we provide it.”

Rich said another thing that not only frustrates him but causes negativity in the community is the over-estimation of unemployed workers.

“I think there is a whole story just about the numbers of unemployment that are reported,” Rich said. “If you add all the layoffs that we know about and that were reported to the Texas Workforce Development Board, it is only 609. If you look at how many people are on unemployment today versus last year, there are 7,300 people more on unemployment. How is that, when the announced layoffs are 609 employees? I don’t know the answer. Except maybe a lot of people who filed for unemployment were working here but lived somewhere else. To go around and tell people that your unemployment rate is 13 percent to 15 percent – I am seriously questioning those numbers. What is so tragic about this data is that a lot of decisions get made by public officials and training providers, school counselors, etc., all based on what they think is reality, when it fact it is all false. I would say we don’t know what reality is.”

Even Marilyn Smith, executive director of the Southeast Texas Workforce Development Board, said she didn’t have all the answers to the unemployment question. She said it is likely that a number of those listed on unemployment rolls were working here but left the area to go back to their home communities when the work at these projects slowed down. If that is the case, then it presents a bleaker picture of the local economy.

“To be honest, the unemployment rate, which I was in a meeting about this morning, is very complex and I couldn’t even try to explain it to you. It is published out of Austin and there are so many factors that come into play. I think some of this comes from people who come to our area for a few months and file a claim here in Port Arthur, then even though that person may leave the area it is still counted in our rate. Those people may have already moved on but if they filed here, they would be counted here. The only way to get a true count is to go through on a case-by-case basis, and that would take forever. It is a moving target, and it is constantly changing.”

Smith said despite what may be happening in other parts of the country, the recession was slow to get here. But to Southeast Texas’ credit, it has traditionally been quicker to recover.

“We were just not immune to what was happening on the national level, and it just got to us a little slower,” Smith said. “We are hearing that the work is going to pick back up. There are still jobs out there. There may not be as many en masse, but there are still one-sie and two-sie jobs out there. That is something that we are going to be focusing on at our upcoming hiring seminar on Nov. 5 at the Beaumont Civic Center.”

Smith said the Hiring Fair and Seminar is designed strictly for employers looking to hire workers right now. She said there are incentives available in the form of tax credits and other perks for training and the like, but the idea is to get more people on the employment rolls.

“We have a large number of skilled people who have lost jobs recently and we want to connect those job seekers with employers looking to hire people. Maybe if we provide some incentives to the employers, they will move in opening up these jobs and getting people back to work.

“But you asked about the outlook for this area and I can tell you that I was in a meeting last week with a company in Houston and one gentleman there said, ‘You are from Beaumont. You guys are about to be bursting at the seams with jobs.’ So the word is out there. And this is not just about construction jobs but other ancillary jobs that are out there and coming back – hotels, retail, commercial. They are all benefiting from these expansions. My board had a study done two years ago in preparation for the expansions that were going to happen – Motiva, TOTAL, Eastman and the others and we were gearing up for 13,000 construction workers, and probably even more. The work is going to pick back up. These companies have been here for years and the jobs will come back.”

Jerry Jordan can be reached at (409) 832-1400, ext. 225, or at [email protected]

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