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Shutting Down : Golden West Refinery Closure Will Cost 280 Their Jobs

December 22, 1991|RICK HOLGUIN and GERALD FARIS | TIMES STAFF WRITERS

The workers at Golden West Refinery know their days are numbered, but they are trying to be philosophical.

They were notified recently that the refinery on the eastern border of Santa Fe Springs will shut down production on Feb. 1, and they will lose their jobs.

"I'm a little saddened, but the economic demand is that the plant closes," said Dave Drinkwine, a maintenance supervisor and 34-year employee. "It has to be. I'll be looking for a job."

Some residents in a La Mirada neighborhood next to the plant are ecstatic, however. No longer will they have to endure days when what smells like oil and rotten eggs force them to keep windows and doors shut tight.

In addition, the refinery uses toxic chemicals, including hydrogen fluoride, and residents have worried that an accident would unleash a toxic cloud.

"It should have been done a long time ago," said Vicki Jewell, who has lived on Duffield Avenue in La Mirada just east of the refinery for nine years.

An official of the Golden West Refining Co. said last week that tough economic conditions and the high cost of meeting environmental regulations are forcing the refinery out of business at least temporarily, and maybe for good. About 280 employees will lose their jobs.

"We're shutting down because (profit) margins are inadequate," said Roger Kemple, senior vice president.

Kemple, who declined to reveal the company's losses, said the refinery may resume operations in April if economic conditions improve. But to improve its efficiency the refinery would have to undergo two months of repairs and maintenance before starting up again, he said.

Golden West is a subsidiary of Thrifty Oil Co. of Downey. Thrifty Oil will buy gasoline from other refineries to supply its chain of service stations, Kemple said.

Poor market conditions and heavy competition at the gasoline pumps have been especially hard on smaller, independent refineries such as Golden West. Another refinery, Fletcher Oil & Refining Co. in Carson shut down on Dec. 4, putting 140 employees out of work. Fletcher officials hope to resume operations once the market rebounds.

Golden West officials had been discussing the refinery's economic pinch for months. Profit margins were squeezed after the Persian Gulf War, when the price of gasoline and other refinery products dropped faster than the price of crude oil, Kemple said.

The refinery processes 45,000 barrels a day of crude oil into gasoline, fuel oil, diesel fuel, liquid petroleum gas and asphalt. It has operated under one owner or another since 1938.

New air pollution regulations added to the refinery's economic problems, Kemple said.

The South Coast Air Quality Management District is requiring Golden West and other refineries to dramatically reduce their emissions of nitrogen oxides, a component of smog, by the end of 1995.

Golden West already has spent about $2 million on equipment to enable the refinery to meet the new pollution control rules, said David J. Dragt, the refinery's manager of environmental affairs.

It would have to spend another $9.5 million by 1995 and $20 million more by 1998. And that does not include the cost of retooling to produce the new, cleaner gasoline being mandated by the state.

The mere mention of the AQMD is enough to anger some Golden West employees.

"The agency is putting us out of business," said Bill Ott, a machinist and 10-year employee. "I'll weather it. I have lots of friends and I'll try to find employment."

An official of the Oil, Chemical and Atomic Workers International Union, which represents 184 of the refinery workers, said he is negotiating with Golden West to extend the salaries of the workers well beyond the closure date.

"You're talking about a lot of people being put out of work," said Bill McGoveran, a union representative. "Whether or not the local refineries will be able to accommodate all these people is not known. I doubt that will be the case."

Santa Fe Springs officials hope the refinery will rebound. Financial problems forced the city's other refinery, run by Powerine Oil Co., to close in the mid-1980s, but it later reopened under new ownership.

"I don't think you can write the epitaph quite yet for Golden West," City Manager Don Powell said.

Golden West produces about $200,000 a year in tax revenue for the city's general fund and about $1 million a year for the city Redevelopment Agency. But Powell said the city would absorb the losses without cuts in services.

But in neighboring La Mirada, officials said they would prefer to see another type of industry take the place of Golden West.

"What would make residents in La Mirada really happy is if Golden West Refinery closed down and the land use changed," said City Manager Gary Sloan. "They have extremely toxic chemicals over there. It only takes one major accident."

Facts About Golden West Refining Co. * Products: Gasoline, diesel fuel, fuel oils, liquid petroleum gas, asphalt. * Employees: 280, one of Santa Fe Springs' top 20 employers. * Tax revenue generated for Santa Fe Springs: $1.2 million.

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