As many of y'all know, I work here in the aviation field here in Atlanta.
The cost of fuel is the most volatile item on any
transportation/aviation related field. Companies try to plan expenses
for the long term, it makes it easier to see how things are doing. Well
recently the local airline here in Atlanta
purchased a refinery to better control the cost of fuel. The projected
savings will basically cover the cost of the purchase in 1 year. That
is a big savings in fuel cost. the Atlanta Journal/Constitution(local
fishwrapper) did a writeup on it recently. Companies like Ford and
American Standard among other conglomerates in the early part of the
20th century tried to control the cost of supplies from beginning to end
to better control cost and quality. later outsourcing became the
vogue. They say business works in cycles..this example bears it out.
It will be interesting if other airlines will try this also.
Monroe Energy officially acquires Trainer refinery, starts turnaround
June 22, 2012
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Photo: The Trainer Refinery Complex in Pennsylvania.
Delta’s
wholly-owned subsidiary Monroe Energy LLC has completed its transaction
with Phillips 66 to acquire the Trainer Refinery Complex south of Philadelphia, taking the next step in Delta’s fuel management strategy.
Phillips 66 handed over keys to the facility to Monroe officials on Friday. Monroe
will start turnaround activities after the July 4 holiday to get the
idled refinery producing fuel later this fall. Trainer aims to capture
refining costs for Delta in an effort to lower fuel spending that was
nearly $12 billion in 2011.
“We
have a team of refining experts and proven leaders effectively
implementing our refining strategy at the Trainer refinery,” said
Jeffrey Warmann, CEO and president of Monroe Energy, in a statement
Friday.
Once
reconfigured, Trainer will produce 52,000 barrels of jet fuel for Delta
every day. The gasoline and diesel fuels created in the refining
process will be swapped for more jet fuel around the country with
partners BP and Phillips 66, and the combination of Trainer’s production
and the product swap will give Delta 80% of its domestic fuel needs.
The
project employs roughly 400 workers at Trainer, which had been idled
since last fall. Those jobs indirectly support thousands of additional
jobs in the region.
Delta and Monroe paid $150 million for Trainer after a $30 million grant from the Commonwealth of Pennsylvania
and will invest more than $100 million to maximize Trainer’s jet fuel
production. The annual savings in refining costs are estimated to be
$300 million
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