100 employees at the Bloomfield refinery will be laid off by mid-December after Western Refining, Inc. announced plans Monday to cut costs by transferring all Bloomfield operations to its Gallup facility.
The El Paso, Texas-based company said the consolidation of its Four Corners refineries will save Western Refining at least $25 million each year.
"The decision to idle the Bloomfield refinery does not come easily. Actions that negatively impact employees are always difficult," Western Refining CEO Paul Foster said. "Western appreciates the dedication of our employees and is committed to treating them fairly and with respect as we work through this transition."
More than 120 people are employed at the Bloomfield refinery.
Due to a shortage in affordable crude supplies in the region, Western Refining had cut collective production at the Bloomfield and Gallup refineries from 40,000 barrels daily to 25,000 barrels, according to the company.
Transferring the Bloomfield refining operations to Gallup allows Western Refining to continue producing an average 25,000 barrels of oil per day while only paying operation costs at one refinery, the CEO said.
"Gallup has the capacity to run all the crude that we're buying. We'll be able to run Gallup fully and it will be a much more efficient operation for us," Foster said.
The Bloomfield site will remain open through mid-December while the company completes refining of in-stock resources
Western Refining is considering alternate uses for the 285-acre facility, including possible biofuel production. No timetable for potential biofuel use was set.
"It's real, real early in the process," Hanson said. "We want to evaluate and see what options are available. There's an increased interest in biofuels and there may be some possibility we can utilize it for that kind of thing."
However, the company will continue to operate its Bloomfield products terminal, which provides gasoline supplies throughout the Four Corners region.
"We will continue to supply all of our customers in that area," the CEO said during an investor conference call. "From a customer standpoint, they're not impacted at all."
San Juan County Commission Chairman Jim Henderson said it's unclear how the plant closure will affect the county tax base because a majority of the tax revenue and royalties paid by the Bloomfield refinery, which is outside the city of Bloomfield, goes directly to the state.
The company was a positive contributor to the Bloomfield community, City Manager Keith Johnson said.
"Those were good paying jobs, good benefits. That will be hard to duplicate with the current state of our economy," Johnson said. "... The sad thing is they've been such a good partner in our community."
Western Refining's struggle to maintain locally available and affordable crude oil supplies at the Bloomfield refinery is not a new concern.
The facility, formerly owned by Giant, threatened to close in 2005 due to low crude supplies, but agreed to keep the site open after the $9 million purchase of a pipeline designed to deliver crude oil supplies from southern New Mexico.
Western Refining officials on Monday said that pipeline was shut down more than a year ago because the long-distance transfer was not profitable.
James Monteleone:
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