Sunoco paints a brighter future

For a region that faced the threat of having the heart ripped out of its oil industry with the closure of two Delaware River refineries, it was good to hear that Sunoco Inc.'s Philadelphia refinery will keep pumping.

Beyond saving 850 jobs at the refinery, the new operator — the Washington-based private-equity firm Carlyle Group — hopes to add another 200 jobs as it modernizes and expands the sprawling facility in South Philadelphia.

At the same time, workers continued returning to the former ConocoPhillips refinery in Delaware County, where they will retool the refinery to produce jet fuel for a subsidiary of Delta Air Lines. Monroe Energy L.L.C. plans to begin production in the fall, enabling Delta to trim its annual fuel bill by about $300 million.

Only Sunoco's smaller refinery in Marcus Hook remains idle, shuttered by the company as Sunoco moves away from refining as part of its merger with a Texas pipeline company, Energy Transfer Partners L.P. of Dallas. But Delaware County officials are clinging to some hope, in the form of a study that suggests the site could be reborn as a multipurpose energy processing facility linked to natural-gas production from the state's booming Marcellus Shale drilling fields.

Despite uncertainty in Marcus Hook, the announcement Monday that Sunoco's city refinery would remain in operation means the region's oil-industry prospects are the equivalent of a barrel that's more half full.

It's a success story that casts a private-equity firm in what may be viewed as the unlikely role of saving jobs, rather than slashing them for quick profits. But Carlyle has proven to stand apart from the pack with its industrial investments, in keeping with what spokesman David Marchick characterizes as the company's confidence in U.S. manufacturing.

Carlyle's move, though, was aided by an important course change at Sunoco that was in part prompted by a White House appeal. Recently elevated CEO Brian P. MacDonald made the key decision to retain a one-third nonoperating interest in the refinery, rather than a complete sell-off. That, along with $25 million in state grants from an enthusiastic Gov. Corbett for Carlyle's planned upgrades, made the deal work.

In the cheering section were United Steelworkers members, who rallied local elected officials. As in so many situations with union jobs at stake, U.S. Rep. Bob Brady (D., Pa.) also took a central role in bringing players to the table, with Mayor Nutter adding his clout.

It's often questionable whether state aid and other incentives worth millions should be handed out to lure jobs that ultimately fall short of giving taxpayers a good return on their investment.

But the Corbett administration — which has offered a multiyear tax break to Shell Chemical L.P. in hopes of bringing a multibillion-dollar petrochemical plant to Western Pennsylvania — figures that the Sunoco facility will support 10,000 jobs indirectly.

Even if the governor's calculation falls short, with warnings from federal energy officials that closing the refinery could have prompted fuel shortages and price spikes across the Northeast, consumers have reason to celebrate the Sunoco deal.