The suggestion surfaces almost every time Suncor Energy is in the news in Colorado.
Close the refinery.
It comes up during permit hearings or when the company is tagged with another air pollution violation or, most recently, with the extended shutdown of its Commerce City operations.
Suncor is one of the largest single-source polluters in Colorado, and for decades the refinery has released toxic chemicals into the air and water, sometimes exceeding the amounts allowed under its federal permits. Those substances include hydrogen cyanide, hydrogen sulfide and benzene — all chemicals that can make people sick with asthma and other respiratory diseases as well as cancer. In large amounts, exposure can even be fatal.
The plant also emits nitrogen oxide and volatile organic compounds, which create ground-level ozone pollution on hot summer days and contribute to the brown haze across Denver’s skies.
And the Commerce City refinery comes under criticism because the neighborhoods surrounding it are home to many Latino and Native American families, whose complaints about Suncor’s pollution often go unheard.
If the plant were to close, the air and water across the Front Range — as well as the people who live here — would benefit.
But what would be the price of losing Colorado’s only oil refinery?
Since the refinery temporarily shuttered operations following cold-weather malfunctions and a fire on Dec. 24, gas prices in Colorado have jumped more than $1 a gallon. Tax revenue, jobs and corporate donations to public causes would be lost.
And Commerce City would be left with a massive parcel of land that most surely would be contaminated from nearly 100 years of petroleum production.
To be clear, there are no indications that Suncor Energy plans to pull out of its Colorado operations or that state officials would force its closure. Rather, industry analysts have said the refinery is among the most profitable in the United States because of its position as the sole gasoline producer in fast-growing Colorado, and executives’ decision to shutter operations for three months to make repairs and perform maintenance show their commitment to it.
Suncor says its refinery contributes nearly $2.5 billion annually to the state’s economy and there would be economic consequences to its closure. But the long-term outlook for Suncor could change as America’s reliance on fossil fuels, and the pollution they cause, wanes.
The heart of the conflict
The conflict over Suncor’s existence is nowhere more intense than in Commerce City, especially during City Council meetings where regular reports on the refinery’s environmental impact are given.
At its Feb. 6 meeting, the city’s environmental planner, Rosemarie Russo, gave a rundown of permit violations and associated investigations at the plant since her last presentation nearly eight weeks earlier:
- 37 air permit exceedances, which means the refinery released a level of pollution above the amount its permit allows
- One water permit exceedance
- Two Emergency Planning Community Right to Know Act violations
- Two fires
- Ongoing investigations by the federal Occupational Safety and Health Administration, the Environmental Protection Agency, the Colorado Air Pollution Control Division and the state’s Water Pollution Control Division.
After the update, City Council member Susan Noble said, “The infrastructure is either too old or it’s the wrong operator. Either way, we need something done about this. We can’t keep saying these exceedances are OK. They’re not OK. It’s not OK to have fires. There’s a possibility that we could have an explosion.”
During the December malfunction, Suncor released toxins including sulfur dioxide, hydrogen sulfide and benzene into the air and water. All of those chemicals can make people sick if they are exposed to them.
The council went on to unanimously approve a motion by Mayor Pro Tem Jennifer Allen-Thomas to write a letter signed by the mayor and the entire council to urge federal and state authorities to do more to enforce air and water pollution regulations.
Allen-Thomas, 52, represents the district where Suncor sits. She still lives in the house that belonged to her parents and remembers the family home’s windows shattering after an explosion at the plant when she was a child.
That explosion happened on Oct. 3, 1978, at what the refinery then owned by the Continental Oil Company, also known as Conoco, after a pressure leak.
As a family nurse practitioner, she’s witnessed too many patients suffering from asthma, headaches and cancer. While no one can prove those illnesses are directly related to the refinery, Allen-Thomas is convinced there’s a connection. It’s a big reason she ran for City Council four years ago.
“I’ve been in Commerce City my entire life and I’ve seen the health disparities,” she said in an interview with The Denver Post. “I’ve seen the continuous pollution and nothing is ever done.”
Allen-Thomas also called the plant with its miles of gray metal pipes, smokestacks, storage tanks, railroad tracks and bumpy roads an eyesore for the entire city.
But she also recognizes that some of her constituents’ livelihoods depend on Suncor, as does her city’s tax base. And she noted that Suncor contributes to the community, building a Boys and Girls Club in the neighborhood and awarding thousands of dollars annually in college scholarships.
“I don’t want to put them out of business, but it’s gone on for too many years,” Allen-Thomas said of the pollution. “Things seem to be getting worse instead of better. After so many years, we should see a change.”
“No middle ground”
Suncor Energy, which is based in Canada, arrived in Commerce City in 2003 when it bought a refinery from Conoco along with 43 Phillips 66 gas stations for $150 million. In 2005, Suncor bought a second, neighboring refinery from Valero Energy for $45 million. The refineries are adjacent and now the whole operation is under the Suncor umbrella.
On Suncor’s 229,469 acres, three plants refine 98,000 barrels of oil per day into gasoline, diesel, jet fuel and asphalt. The company supplies 30% of the gasoline sold at Colorado pumps and almost all of the asphalt used to pave roads in the state.
Over the years, neighborhoods and businesses were developed around the plant.
But while the first refinery was built along the banks of Sand Creek in 1931, the Environmental Protection Agency wouldn’t come along for another four decades. And Americans’ understanding of air and water pollution would not take off until the 1970s — and even then, information about what toxins were coming from Suncor’s smokestacks would come slowly.
Demands for better regulation intensified in 2016 after a yellow plume of smoke spilled across the skies north of Denver. Voices grew even louder in 2019 after ash spewed from one plant, blanketing cars and homes in the surrounding neighborhood.
Now those voices are amplified as the environmental justice movement picks up steam and Suncor’s pollution violations pile up.
Shaina Oliver, Colorado state coordinator for Moms Clean Air Force and a mother raising children in the shadow of the plant, said it’s impossible to calculate the value of a healthy family.
Suncor must follow rules set by the EPA and the Colorado Department of Health and Environment or lose its “social license to operate,” she said.
“No middle ground that involves an increased risk of cancer due to exposure to chemicals emitted from Suncor is acceptable,” she wrote in an email to The Post.
Higher gas prices
But others warn there is much at stake should Suncor shutter its refinery.
The shutdown already has given Coloradans a feel for what its absence would do to gas prices.
Suncor provides 30% of gasoline and 50% of diesel fuel used in the state.
In addition, the company supplies fuel to more than 220 Shell, Exxon and Mobil sites in Colorado and Wyoming. Suncor owns or leases 44 of those gas stations in Colorado. Suncor estimates that 15 million people buy their gas from these stations in a single year, said Loa Esquilin Garcia, a Suncor spokeswoman.
Gas prices in Colorado have risen about $1 a gallon since Dec. 26, and the rise comes during a period of the year when prices normally drop. The U.S. Energy Information Administration attributed the higher prices to Suncor’s temporary closure.
“The impact on prices — it’s terrible. It’s taking money out of family’s budgets,” said Grier Bailey, executive director of the Colorado Wyoming Petroleum Marketers Association.
Colorado drivers are fortunate the Suncor malfunction happened in the winter when fuel demand is lower, he said. If the refinery was forced to close during the summer, Bailey estimated gas prices would jump an average of $2 per gallon.
Families potentially would need to add an extra $50 or $60 per month to their household budgets to pay for gasoline.
“I understand people want to cut down on emissions and eliminate flaring,” Bailey said. “But we can’t lose it.”
Suncor provides about 30% of the jet fuel used by airlines flying in and out of Denver International Airport, Garcia said.
“One of my first questions, when Suncor went down, was, ‘How is DIA?’” said Ian Lange, director of the mineral and energy economics program at Colorado School of Mines. “Is DIA in trouble?”
If airlines had to pump fuel from other locations, ticket prices would increase as they recovered the extra expenses they incurred from flying out of Denver. The airport does not purchase fuel, but each airline buys what they need from providers.
“It would be a lot more expensive to fly or we’d have to build more pipeline to make sure DIA got its jet fuel,” Lange said.
Suncor also is a major supplier of an ingredient in asphalt used by the Colorado Department of Transportation as well as cities and counties across the state.
Matt Inzeo, CDOT’s communications director, said the shutdown has not impacted highway construction or maintenance since it’s wintertime.
“It certainly would be a different conversation if this happened in the summer,” he said.
A reliable tax base
It’s difficult to figure out exactly how much Suncor pays each year in property taxes, sales taxes and other government levies because state law prevents those specific numbers from being disclosed.
But Garcia told The Post that the company’s operations and fuel sales generated more than $200 million in state, county and city taxes over a five-year period.
Among those taxes were $11 million a year in Adams County property taxes and $4 million annually in Commerce City use taxes, she said.
Suncor’s property tax contribution to Adams County is about 5% of the county’s total annual property tax collections, according to 2023 budget documents.
Commerce City is expected to collect nearly $94 million in sales and use taxes in its 2023 budget, making Suncor’s use tax contribution about 4.25% of that line item in the budget, the city’s 2023 budget report said.
As for jobs, Suncor employs 500 workers, including 250 who are members of the United Steelworkers union. The refinery also uses about 350 contract workers each day to support plant repair work, Garcia said.
Garcia did not answer The Post’s question about its direct payroll for employees and contractors. On its website, the company claims that it is responsible for 5,000 direct and indirect jobs that have a combined payroll that exceeds $250 million. The website claim does not provide details as to what Suncor considers an “indirect job.”
Contaminated land
Finally, if the refinery were to permanently close, the huge question of what to do with the land it sits on would loom over Commerce City and north Denver.
Lange, the economist from Colorado School of Mines, warned, “It’s definitely not going to become a kid’s playground.”
“That’s definitely a non-trivial thing to think about,” Lange said.”It is an industrial site. Could we turn it into a different type of industrial site?”
Colorado would need the major pipelines that run underground to remain operating because it would need the fuel supply. Suncor also could opt to use the site as a storage facility to keep fuel before it is distributed to its gas stations across Colorado.
“You would want to keep pipelines running underground because that would be your lifeline to other refineries,” Lange said. “You’d probably want to expand them to keep more product coming in.”
It’s not impossible to clean up property where an old refinery once operated.
In Philadelphia, a refinery closed in 2019 after its owners filed for bankruptcy in the wake of an explosion.
The Philadelphia Energy Solutions refinery turned 330,000 barrels of crude oil per day into usable petroleum products. The 1,300-acre site included more than 100 buildings, 3,000 tanks and 950 miles of dirty pipeline, according to a Bloomberg news story about the cleanup.
Hilco Global, a company that transforms old fossil-fuel sites into usable land, bought the property out of bankruptcy and is redeveloping it into a logistics hub. But first, the company has to recycle old metal and clean up asbestos, dilute hardened petroleum stuck to equipment, stop benzene flow into the Schuylkill River and remove contaminated soil.
In some cases, petroleum companies choose to keep their old refinery properties and retain a skeleton crew to oversee the sites, said Emily Moore, director of climate and energy at Sightline, a nonprofit, non-partisan organization that focuses on the environment in the Pacific Northwest.
For example, Marathon Petroleum Corp. idled a refinery in Gallup, New Mexico, in 2020 after demand dropped during the pandemic. Marathon eliminated more than 200 jobs, according to news reports. The company has not restarted operations, nor has it sold the property.
That’s what happens in many cases, said Moore, who researched refinery closures for a report on the high costs of unplanned refinery closures. Her research looked into the tax and job losses and the ways oil companies delay or avoid cleanups.
She studied seven closures that took place between 2019 and 2022, and Philadelphia is the only site that is being totally redeveloped.
“With most of these refineries, it was a lose-lose where they stay open with very few employees and very little cleanup responsibilities,” Moore said.
As America cuts its reliance on fossil fuels, more refineries will close in the future, Moore said. In Colorado, Gov. Jared Polis is pushing electric vehicles as part of a wider plan to reduce harmful air emissions that dirty Colorado’s skies and make people sick.
Moore’s advice is for Suncor’s neighbors to start planning for a potential closure so they can have input on what they want to see happen in their communities.
“A lot of transition planning would be to make sure industry is held accountable for what would be a big cleanup and make sure the community and taxpayers were not held responsible for that,” she said.
Communities also need to plan for the loss of well-paying jobs and how those workers would transition into other professions, and they need to think about diversifying their tax base to account for lost revenue, she said.
“I don’t think the question is, ‘Should it close or should it not close?’ But it’s more, ‘How can communities start planning now to support workers, protect the environment and hold industry accountable?’” Moore said. “I’m talking about looking out a decade and thinking about, ‘What do we want?’”
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