PBF Energy mulls $550M conversion of idle hydrocracker to make renewable diesel in Louisiana

Louisiana Gov. John Bel Edwards and Steven Krynski, manager of the PBF Chalmette Refinery, announced June 24 that the company is studying the possible conversion of an idled refinery unit into a renewable diesel production complex. The refinery’s parent company, PBF Energy, would make a $550 million capital investment to retrofit a hydrocracker unit—out of operation since 2010—with new technology to accommodate renewable diesel production. The project also would include construction of a pretreatment unit that will allow Chalmette Refining to purify vegetable oils, fats and grease before conversion. PBF Energy and its potential partners are considering this and other facilities for the renewable diesel project, and the company expects to make a final investment decision after local taxing bodies in St. Bernard Parish consider the project.

“Louisiana continues to position itself as a leading state for environmentally friendly energy production,” Edwards said. “This innovative project at Chalmette Refining is right in line with the goals set out by the Climate Initiatives Task Force I created last year. With this major capital investment in a next-generation energy source and the creation of quality manufacturing jobs along the way, Louisiana would benefit from this project on many levels.”

With the project, Chalmette Refining would create 20 new direct jobs at an average annual salary of $70,000, plus benefits. Louisiana Economic Development estimates the project would result in 90 new indirect jobs, for a total of 110 new jobs for St. Bernard Parish and the southeast region. The project is expected to support 200 construction jobs, and it would enable Chalmette Refining—the largest private employer in St. Bernard Parish—to retain 516 existing jobs at the refinery.

“The devastating economic impact of the COVID-19 pandemic on the energy industry is undeniable—we’ve seen eight U.S. refineries shut down since the beginning of 2020, including one down the road in St. James Parish,” Krynski said. “PBF Energy is looking for projects that will create stability for our workforce, prepare the refinery for a green energy transition and help us recover from the losses of the last year and a half. Louisiana financial incentives like the Industrial Tax Exemption and Quality Jobs programs help make the numbers work, especially as our company and entire industry recover from the pandemic. With the support of our state and local leaders, I am hopeful we will be able to bring this project and its economic benefits to St. Bernard Parish.”

To secure the project, the state of Louisiana offered PBF Energy an incentive package featuring the comprehensive workforce solutions of LED FastStart, the nation’s No. 1 state workforce training and talent attraction program. The company also is expected to utilize the state’s Quality Jobs and Industrial Tax Exemption programs. The granting of ITEP incentives is subject to final approval by local officials in St. Bernard Parish, with votes expected later this summer.

“The Chalmette Refining facility has been a mainstay of our local economy for more than a century,” said Guy McInnis, St. Bernard Parish president. “This important project would position the refinery for success in the years to come as it adapts to the new demands of our energy future. Chalmette Refining is the parish’s top taxpayer and largest private employer, and support for this project will help to secure its future in St. Bernard Parish.”

Michael Hecht, president and CEO of Greater New Orleans Inc., said, “Renewable diesel comes with a number of benefits—it’s made of renewable resources, it burns clean and it works just like traditional diesel. We are proud that our team has worked with Chalmette Refining, Louisiana Economic Development and elected officials over the past year to help bring this project to fruition, to bring investment, jobs and clean energy to St. Bernard and the region.”

PBF is one of the largest independent refining companies in the U.S. In addition to its Louisiana facility, PBF operates two refineries in California and one each in Ohio, Delaware and New Jersey.