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Shell GM gives status report on plant
  
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By ROY N. KENT
Listen up, the sage of Deer Park has spoken.
Aamir Farid wears many hats in the area, none bigger than his role as general manager of Shell-Deer Park. He is also the chairman of the East Harris County Manufacturer’s Association, executive board member of the Economic Alliance and a Deer Park Education Foundation board member.
Last year, he told the assembled members of the Rotary Club of Deer Park that oil prices – at that time hovering around $120 a barrel – could not be sustained.
“I am not surprised that it came down,” he said in a return visit to the club on Wednesday. “I am surprised at how quickly it came down.”
Shell, as a company, did its planning as though oil would cost $60 per barrel.
“It’s been such an unbelievable impact on the industry as a whole,” Farid said. “We are basically break even. We are not making any money on gasoline.”
It is about the same with jet fuel, he said, adding in a semi-joking manner that consumers might want to ask the airline industry why its prices have not gone down in the last year.
“Last year was a pretty significant year for the Shell-Deer Park site,” Farid said. “We talked last year about the unification of the site.”
The Shell refinery and chemical plant operations were unified under the direction of Farid last March. The operations had been run as separate entities since 1995.
Also in the last year, the site opened its office building, consolidating the numerous office buildings dotting the Shell-Deer Park site.
“We moved into our building and that has worked out for us really well,” he said. “It’s a great facility.”
Now, about 700 employees – all associated with Shell-Deer Park and not with other Shell offices – inhabit the building at any given time. It has made the process of gathering for meetings and presentations a much easier prospect.
“Literally, it would take 10 to 15 minutes to get from one site to another to have meetings,” he said. “Now we’re all at the same place.”
The first test for the new building came with Hurricane Ike last September.
“It was designed for level 3 (hurricanes),” he said. “I can tell you from my personal experience because I lived there for about five days that it did very well.”
As with the rest of the national economy, things at Shell-Deer Park are in a state of flux.
“Really the most significant thing overall is that the economy has completely changed,” he said. “We are fortunate here with this refinery that we make … ultra-low sulfur diesel which has just four or five parts per million sulfur. And we make a lot of it.”
He said the Shell refinery makes between 100,000 and 110,000 barrels of the diesel fuel every day.
He added that Exxon and other companies recently announced they were going to invest in making more diesel fuel but that Shell had the foresight to invest in the 1990s.
“The refinery side of our facility is still a profitable enterprise,” he said. “Not nearly as profitable as it was the last few years but we are still doing reasonably well.”
The chemical side of the facility is “in the tank.”
Most of the chemical industries in the area make consumer products which, for instance, are used in the housing industry. As the housing market struggles in the current economy, so do the chemical companies which provide the materials.
“Shell has not announced any layoffs at this point in time,” he said. “I will not tell you that that’s not going to happen. I don’t know that it will; I don’t know that it won’t.”
As many national businesses have shut down, in particular the auto industry taking extended vacations from building new cars, units at Shell have shut down. It is not known when they will be restarted.
Also on the horizon is the issue of labor.
Operators and crafts are represented by the United Steel Workers. The current three-year union contract is set to expire on Jan. 31 and negotiations are currently under way.
“This is the first time the industry has negotiated with USW,” he said. “So this is new for us.”
This is also the first time in more than a decade that there have been serious contract negotiations.
“The last several cycles all parties basically said ‘let’s agree to extend, we’ll make some modifications and just move forward,’” he said. “That is not happening this time.”
USW has issues it feels it needs to deal with, Farid said, and “very honestly Shell feels there are some issues it needs to deal with.”
Among the national issues are wages, benefits and health care. Once the national contract is worked out, local issues need to be dealt with, Farid said.
“Could there be a work stoppage?” he asked. “There could be a work stoppage. Do I anticipate one? No. Do I want one? No.
“But, in complete transparency, could there be one? Yes. But no one wants to have a work stoppage, especially in this economy.”
On a less serious note, Farid pointed out that Shell currently has a tank along State Highway 225 with epic art on it and another one is being covered now as part of Project Stars. The artwork depicts historic moments in Texas history pertaining to something in the area.
“We have at least one tank with the artwork on it,” he said. “We figured ‘we’re Shell, so we’ll do two.’”
Jan Lawler of the Economic Alliance is spearheading the project deemed an “urban revitalization plan.” Essentially, it is hoped the project boosts tourism in east Harris County.
Lyondell and Vopak currently each have a tank with the artwork on it.
In closing, Farid answered questions. While admitting that it’s not the side of the industry he is on nor that he has anything more than an opinion, he fielded a question about oil prices and its relation to gasoline prices.
“My sense is it’s going to slowly trend up,” he said.
Further, he added, at $70 or $80 a barrel for oil, gasoline prices should be $2.20 or $2.30 per gallon.
Aamir Farid wears many hats in the area, none bigger than his role as general manager of Shell-Deer Park. He is also the chairman of the East Harris County Manufacturer’s Association, executive board member of the Economic Alliance and a Deer Park Education Foundation board member.
Last year, he told the assembled members of the Rotary Club of Deer Park that oil prices – at that time hovering around $120 a barrel – could not be sustained.
“I am not surprised that it came down,” he said in a return visit to the club on Wednesday. “I am surprised at how quickly it came down.”
Shell, as a company, did its planning as though oil would cost $60 per barrel.
“It’s been such an unbelievable impact on the industry as a whole,” Farid said. “We are basically break even. We are not making any money on gasoline.”
It is about the same with jet fuel, he said, adding in a semi-joking manner that consumers might want to ask the airline industry why its prices have not gone down in the last year.
“Last year was a pretty significant year for the Shell-Deer Park site,” Farid said. “We talked last year about the unification of the site.”
The Shell refinery and chemical plant operations were unified under the direction of Farid last March. The operations had been run as separate entities since 1995.
Also in the last year, the site opened its office building, consolidating the numerous office buildings dotting the Shell-Deer Park site.
“We moved into our building and that has worked out for us really well,” he said. “It’s a great facility.”
Now, about 700 employees – all associated with Shell-Deer Park and not with other Shell offices – inhabit the building at any given time. It has made the process of gathering for meetings and presentations a much easier prospect.
“Literally, it would take 10 to 15 minutes to get from one site to another to have meetings,” he said. “Now we’re all at the same place.”
The first test for the new building came with Hurricane Ike last September.
“It was designed for level 3 (hurricanes),” he said. “I can tell you from my personal experience because I lived there for about five days that it did very well.”
As with the rest of the national economy, things at Shell-Deer Park are in a state of flux.
“Really the most significant thing overall is that the economy has completely changed,” he said. “We are fortunate here with this refinery that we make … ultra-low sulfur diesel which has just four or five parts per million sulfur. And we make a lot of it.”
He said the Shell refinery makes between 100,000 and 110,000 barrels of the diesel fuel every day.
He added that Exxon and other companies recently announced they were going to invest in making more diesel fuel but that Shell had the foresight to invest in the 1990s.
“The refinery side of our facility is still a profitable enterprise,” he said. “Not nearly as profitable as it was the last few years but we are still doing reasonably well.”
The chemical side of the facility is “in the tank.”
Most of the chemical industries in the area make consumer products which, for instance, are used in the housing industry. As the housing market struggles in the current economy, so do the chemical companies which provide the materials.
“Shell has not announced any layoffs at this point in time,” he said. “I will not tell you that that’s not going to happen. I don’t know that it will; I don’t know that it won’t.”
As many national businesses have shut down, in particular the auto industry taking extended vacations from building new cars, units at Shell have shut down. It is not known when they will be restarted.
Also on the horizon is the issue of labor.
Operators and crafts are represented by the United Steel Workers. The current three-year union contract is set to expire on Jan. 31 and negotiations are currently under way.
“This is the first time the industry has negotiated with USW,” he said. “So this is new for us.”
This is also the first time in more than a decade that there have been serious contract negotiations.
“The last several cycles all parties basically said ‘let’s agree to extend, we’ll make some modifications and just move forward,’” he said. “That is not happening this time.”
USW has issues it feels it needs to deal with, Farid said, and “very honestly Shell feels there are some issues it needs to deal with.”
Among the national issues are wages, benefits and health care. Once the national contract is worked out, local issues need to be dealt with, Farid said.
“Could there be a work stoppage?” he asked. “There could be a work stoppage. Do I anticipate one? No. Do I want one? No.
“But, in complete transparency, could there be one? Yes. But no one wants to have a work stoppage, especially in this economy.”
On a less serious note, Farid pointed out that Shell currently has a tank along State Highway 225 with epic art on it and another one is being covered now as part of Project Stars. The artwork depicts historic moments in Texas history pertaining to something in the area.
“We have at least one tank with the artwork on it,” he said. “We figured ‘we’re Shell, so we’ll do two.’”
Jan Lawler of the Economic Alliance is spearheading the project deemed an “urban revitalization plan.” Essentially, it is hoped the project boosts tourism in east Harris County.
Lyondell and Vopak currently each have a tank with the artwork on it.
In closing, Farid answered questions. While admitting that it’s not the side of the industry he is on nor that he has anything more than an opinion, he fielded a question about oil prices and its relation to gasoline prices.
“My sense is it’s going to slowly trend up,” he said.
Further, he added, at $70 or $80 a barrel for oil, gasoline prices should be $2.20 or $2.30 per gallon.
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