St. James Parish Braces for the Closing of the Shell Convent Refinery

For years, the Convent Refinery could send jet fuel from St. James Parish straight to airports in Atlanta, Washington, and New York City via the Bengal, Colonial, and Plantation pipelines. The fuel’s journey from the Gulf Coast to New Jersey took between 18 to 21 days.

But in July of last year, after two months of flight cancellations, crude oil prices plummeted to historic lows. In November, Shell Oil announced it would sell its refinery in St. James Parish. The idea that one of the largest, oldest companies in the Louisiana oil industry would shed such a facility was a shock, especially during the uncertainty of the early COVID crisis. But then, only four months later, refinery management called a town hall meeting of its employees and announced Shell would completely close the facility and lay off all of its 1,100 workers because it couldn’t find a buyer. The refinery has been a fixture of St. James Parish for over 50 years.

In the wake of its closure came the specter of a post-oil Gulf Coast that would mirror the Rust Belt, with shuttered refineries leading to high unemployment and economic stagnation. Two other refiners idled plants across Louisiana, several closed across the country, and car companies announced transitions to all electric vehicles. A major player of the Louisiana oil game was cashing in a big pile of chips.

One of the most urgent and immediate questions was how a small parish like St. James would weather such a shutdown. In the longer term, if more oil and gas producers follow suit, the closure of this refinery will be an important test of Louisiana’s ability to adapt to the growing global climate crisis. With its economy built around resource extraction, what does a future without industry look like?

Removing the Hive, Leaving the Workers

St. James is a tight-knit place, and the closure has been devastating for workers and for the parish tax base. Shell was both the biggest employer in the parish and the largest taxpayer there. About 1,100 workers (698 people working directly for Shell and 400 contract workers) will no longer have jobs at the plant once it is completely decommissioned, cleaned, and closed, which will happen by August.

Marty Poche is the United Steelworkers (USW) representative who negotiated terms of severance for union members, who made up about one third of the workforce at Convent in maintenance, lab work, and general operations. Before going to work for the union, Poche worked at Shell’s Norco refinery for over 20 years. He was born and raised in St. James and his dad also worked in the industry, including at Convent. He said that about 140 USW members have taken placements at the Norco refinery in St. Charles Parish or at other Shell complexes in Louisiana, Texas, Alabama, and offshore in the Gulf of Mexico. About 70 took severance packages and chose not to be placed.

The majority of full-time Shell workers, according to the numbers provided by the company, have not been hired at other Shell facilities. It is difficult to get a clear picture of the impact on these 300 to 400 full-time workers. Some are out of work and some have found work with other companies. According to severance package details released by Reuters, a worker who made $40 an hour (the average wage at the refinery) could expect to receive between $19,000 and $124,000 in severance pay, depending on their experience. But because of a high rate of turnover at the refinery in recent years, many workers had fewer years of experience and could therefore expect only the smaller packages.

And then there are the 400 contract workers. The increased reliance on contractors in refineries has been a point of contention between unions and owners in recent years and was a sticking point in negotiations that led to a nationwide strike in 2015—the largest refinery strike in the last 35 years. Contract workers generally earn less per hour than directly-employed workers, cross picket lines during contract negotiations, and—significantly in this case—are cheaper to lay off.

The impact on each worker and their families is profound. Even for those lucky enough to have found work at other Shell facilities, the closure has upended lives as families prepare for the shift. Poche said that about 30 workers have taken jobs offshore with Shell’s deep water operations. Some have roots in St. James and others had recently settled in the River Parishes for the work in Convent. “It’s a devastating hit to know that your 10 minute commute to work—what you thought was a job, a life—that’s no longer there,” he said. “You can continue employment, but you’re going to have to leave your family for 14 days straight.”

One laid-off Convent worker has started a GoFundMe page because he is too young for retirement but unable to find work in the meantime. (Over 11,000 manufacturing workers and 7,500 oil workers in the oil and gas sector have been laid off in Louisiana in the past year). “I have been married and working for 40 plus years paying taxes, insurance, family bills,” it says on his site. “All the resources I’ve put into keeping my job are all for nothing, I can not receive any of the money I’ve put into social security until I’m 68 and now I’m fixing to lose everything we own for lack of income in the coming months.”

For George Nassar, Convent is a fixture he can’t imagine life without. He grew up in Convent on a small farm and was a child when the refinery was being built for Texaco in the ‘60s. “When Hurricane Betsy hit, I was nine years old, and my dad was a welder, tank builder, and boilermaker. And he was working there during the time when Hurricane Betsy hit, building tanks.” When Nassar was old enough, he started working construction at a site in Donaldsonville that is today the largest nitrogen fertilizer complex in the world. He has been an electrician’s helper and a welder’s helper. He drove flatbed trucks, hauled materials between facilities, and ran a warehouse. In the ‘70s, he worked construction at the Convent refinery during one of their expansions. He retired from Occidental Chemical after 38 and a half years, and for the last 27 years he has been elected as a member of the St. James Parish School Board.

Shell’s property and sales taxes account for about 16% of the school system’s revenue. Nassar described the board’s struggle to fill the holes in the system’s budget as “overwhelming.” For the upcoming school year, he said, “We’re looking at an $8 to $10 million budget cut for the school system.” Shortly before we spoke, the board had voted to eliminate 13 high school teachers, 17 elementary school teachers, and two central office positions. “It hurts a lot, especially with us being such a small community,” he said. Class sizes will increase and athletics budgets, maintenance, and curriculum development will be reduced. Teachers’ professional development days will be eliminated as well as various courses, which endangers the system’s cosmetology, carpentry, and agricultural science classes.

Beyond the refinery’s laid-off workers and tax revenue, the ripple effect has reached the most unexpected places. There are vendors, plate lunch makers, and suppliers for whom the refinery and its workers were major customers. The closure affects even local beekeepers.

If you drive along the river you might see a set of small white boxes stacked up along the fenceline of various petrochemical complexes. These boxes are full of Bruce Scharwath’s bees. He is a St. James native who goes by the name “Schawee” (Cajun French for raccoon) and specializes in live bee removal. He sets up these bee boxes along the petrochemical corridor to attract honey bee swarms which might otherwise settle in the pipes and beams of the complexes along the river. When bees do form hives at these facilities, Schawee gets a call to capture and remove them.

He has removed up to ten established hives from a single facility in a week. This can cause the plants to surrender huge sums of money to the bees, because shutting down operations for a removal is costly. Once, at Shell’s refinery in Convent, he was on site to remove a hive from near ground level when he looked up and saw clouds of bees flying around the top of one of the refinery’s flares. “So we went up there in a lift and it was probably, I don’t know, 40 feet up,” he says. The honey bees were there in a hive in the steel cross beams, and he sucked them all up in a bee vacuum. After the bees are removed, he takes them to a 28,000-acre farm in nearby Ascension Parish where, over the last 28 years, he has collected between 200 and 300 hives. He makes “a couple hundred gallons of honey” every year and also supplies starter hives for beekeepers.

When he found out Convent would close, like many, he was in disbelief. “You would never think a petrochemical plant like that would shut down,” he said. Without the prospect of the hive removals and the fenceline hive boxes, he estimates he’ll lose out on $30,000 to $35,000 from Shell. “I’m not compared to a trucking company or something like that, you know, where they’ve got millions in it. But to me it’s like millions,” he says.

Father Vincent Dufresne, who is a pastor of three churches in St. James, could only compare the effect of the refinery’s closure to the community experience of natural disasters, specifically a 2016 tornado which ripped through an RV park in Convent and destroyed hundreds of homes. Then and now, as about 100 families in his congregation are dealing with laid-off workers, he said the community pulled together and organized short-term and long-term assistance of meals, groceries, and cash. For his part, he recognizes the psychological toll the layoffs have had on those who have worked for so many years, formed a solid identity around that specific work, and suddenly have no place to go in the morning. “Knowing that the community is praying for them, knowing that the community is providing donations for immediate needs, that gives everybody a certain sense of hope,” he says, until another job comes along.

photo by Julie Dermansky

The Rhythm of Louisiana?

Shell has framed the closure of Convent as a part of its sweeping plan “to be a net-zero emissions energy business by 2050.” The plan highlights Shell’s investments in electrical vehicle charging stations, sugarcane-based bioethanol, and the manufacturing of chemicals from recycled waste. Aside from Convent, Shell has closed a refinery in the Philippines, sold refineries in the Bay Area, and plans to sell three more, including one in Mobile where laid-off Convent workers were transferred.

There are complications with the oil company’s green narrative, though. Shell, for one, planned to mothball much of Convent and lay off workers as far back as 2017, and the refinery’s problems for the company’s bottom line were widely known before last year. In addition, Shell’s plan to curb emissions to help limit global temperature to a 1.5° C increase relies on a massive expansion in its natural gas operations. However, climate scientists have said that those two things are incompatible, and that fossil fuel production must decrease entirely, regardless of carbon offsets. The reality is, the closure of Convent was good for Shell’s bottom line and to soothe investors who are concerned about the end of fossil fuel’s long-term viability.

Marty Poche, the USW representative, when asked whether workers were anticipating any future closures across Louisiana in the name of transition, said, “I think the green movement was something that most of us thought was going to happen, but it probably would have been further in the future. But the pandemic actually maybe moved it up some years.”

Regardless of Shell’s deeper climate change motives, the closure sheds light on how a multinational corporation does business and ends business in Louisiana, and how workers fare in that process. It takes a lot for a parish like St. James to build and sustain the amount of complex industrial processes that exist in its borders, and is visible, generationally, in the people who are grappling with the layoffs. There are only 21,000 people in the parish, but there are two fertilizer complexes, a steel mill, an aluminum plant, a polymer plant, a methanol plant, two grain elevators, a chlorine plant, a galvanizing facility, a sugar refinery, multiple barge operations, and numerous global import and export terminals along the river. Below ground, there is more. In the last decade, as fracking and hydraulic drilling has unlocked massive new oil reserves, “The St. James Crude Hub” has become one of the most strategic oil hubs in the U.S., connecting pipeline networks from the tar sands of western Canada to the deep water Gulf of Mexico (including Dakota Access and Bayou Bridge) to refineries along the river and international export. Up to 33 million barrels of crude oil are stored in tanks across St. James at any given time.

Many of those properties enjoy lucrative tax breaks as a part of the state’s Industrial Tax Exemption Program (ITEP). In 2020, according to The Advocate, $2.57 billion worth of property in St. James was tax exempt for the business incentive. That’s more than three-fourths of property in the parish.

Shell currently has 14 active or pending ITEP contracts for the Convent Refinery, which, according to St. James Assessor Glenn Waguespack, amount to more than $500 million in property kept off the tax rolls. He is unsure how Louisiana Economic Development (LED), the state agency which manages ITEP, will handle Shell’s exemptions now that its workers have been laid off. But in February, three months after the refinery’s closure, several of Shell’s exemptions were renewed by the board that oversees ITEP. This exempted the company from paying taxes on more than $20 million in property for the next five years. According to the program’s rules, ITEP exemptions are given to companies to “make a commitment to jobs and payroll in the state.” If the operation shuts down, “the board may consider cancellation or restriction of the contract.”

Waguespack said, “To me, it seems like if you got exemptions, and you didn’t pay taxes on all those exemptions for a number of years, and you shut down, that seems like you should have some obligation to pay some taxes on it.” According to St. James Parish School Board’s 2020 financial report for the Legislative Auditor, that seems to be an option. It says of ITEP exemptions: “The local government may recapture abated taxes if a company fails to expand facilities or otherwise fails to fulfill its commitments under the agreement.” The same report says that the school board missed out on a total of $18,808,235 in 2020 tax revenues that were abated by ITEP and other tax exemptions across the parish. That’s equivalent to hiring an additional 369 teachers. LED has not responded to repeated inquiries about their review process of Shell’s contracts.

As Shell walks away despite taking the tax incentives, critics of ITEP say the program needs rethinking. Megan Milliken Biven says redirecting ITEP and other government subsidies from fossil fuel companies that are shedding jobs could create an “escape valve” for Louisiana’s laid-off oil, gas, and chemical workers. Biven is a public policy analyst from New Orleans who has envisioned, in detail, how to protect Louisiana oil and gas workers as the world shifts away from fossil fuels. In the case of Convent, she says, ITEP has been “a transfer of revenue from Louisiana schools, from Louisiana hospitals, and Louisiana roads to a transnational oil company that is based in the Netherlands.” She thinks those kinds of subsidies can be redirected, with an actual focus on employing these skilled workers, to deal with some of Louisiana’s most pressing challenges. “Those were public dollars supporting those 1,100 employees. We could have 1,100 workers doing something else in Louisiana,” she says, and she advocates for a revamping of the depleted Army Corps of Engineers dredge boat fleet to serve coastal restoration and flood protection needs. She has also written federal legislation for the creation of a national agency to employ laid-off workers to plug abandoned oil wells.

“Oil and gas workers discarded by the indifferent oil and gas industry or displaced because of necessary climate policy don’t have to be ‘necessary causality’ and deserve a true and just transition,” she recently wrote. She stresses the need to distinguish workers (and their skills) from the industries that have traditionally employed them. “There is this heritage and this identity that is intertwined with oil and gas,” she says, and those manufacturing skills are well-suited to the work necessary to build wind energy or innovate the plastics recycling process. These are challenges that need essential, skilled workers, she says; whereas, in the case of Convent, Shell has treated its workers as expendable.

The refinery in the meantime will stay on the market. Some say it could be sold and reopened with the right buyer. Others say its units could be disassembled and sold across the world. Many of the ones who built it will remain without jobs, and the schools in their communities will lose teachers. But as Convent’s flares go dark, there is still massive potential for the collective to build something new in its place. Despite how bleak it may seem, Biven sees the potential for movement towards industries that benefit Louisiana communities and make sense in a transitioning world. “When you don’t have any other options, your only option is to look backwards,” she says, pointing to Louisiana’s relationship to oil and gas, through booms and busts. “But I think there is an opportunity right now in Louisiana to look forward. There is a path forward, which builds upon that heritage of oil and gas and those skill sets.”

illustrations by Ursa Eyer