Kapolei Refinery Will Close In April

Tesoro Corporation announced earlier this month that it will close refining operations at its Kapolei refinery in April. The facility will be converted into a terminal that will receive, store and distribute fuel that has been imported from the Mainland and Asia.

The decision comes one year after the company announced that it was putting its Hawaii operations up for sale.

Tesoro Hawaii manager of government and public affairs Lance Tanaka explained the company found in a market analysis that the Kapolei refinery was no longer in alignment with the its strategic focus, which is centered on the Mainland.

The refinery – the larger of two in the state – will continue its operations until April, and Tesoro has stated that it will fulfill all of its existing supply contracts.

“We have developed a detailed and very specific plan for how we will continue to fulfill our supply commitments,” Tanaka explained. “We are meeting with our customers to let them know about these supply plans, and also to let them know about alternate ways of receiving supplies in the future.”

During this time, Tesoro also will be in the process of marketing its retail and distribution assets for sale, including its gas stations.

Tesoro estimates that between 180 and 200 jobs will be impacted by the closure.

Tanaka said that there likely will be an opportunity for some employees to apply for positions elsewhere in the company, possibly at the new import, storage and distribution terminal.

“We will need employees to run the terminal,” he said. “How many that will be is still to be determined. It is too early to say.”

In a statement released following Tesoro’s announcement, U.S. Sen. Mazie Hirono said that this “is terrible news for the state and the workers who will lose their jobs.” She went on to state that she “will work closely with Hawaii’s delegation, state officials and community leaders to ensure displaced workers and their families receive whatever federal assistance is available to them as they search for new jobs.”

While some concern has been expressed in the community about how the closure will impact the energy market – particularly if it will affect gas prices – energy experts are claiming that it won’t.

“This doesn’t fundamentally change the structure of energy in Hawaii,” said Kang Wu, a senior fellow at the East West Center in the Innovation, Energy and Economic Growth division.

“In terms of the energy market, there is no huge immediate impact.”

Hirono also stated that the closure of the facility is a reminder that the state should pursue ways to create a greater level of self-sufficiency when it comes to energy: “This closure underscores the importance of energy self-sufficiency for Hawaii. While Hawaii is the most energy-dependent state in the nation, we are not a dependent people. We must continue to find more ways to support research and development of renewable and alternative energy sources.”

“Hawaii needs alternative energy, which is a longterm issue,” Wu said. “We always need alternative energy, but of course we have to be realistic. When we say we need it, we also have to work out a plan to get it.

“(The closure) is kind of a wake-up call that we have to be realistic in finding workable solutions,” Wu added.