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The Role of the Refineries in the Regional Economy

This report analyzes the significant role of refineries in the regional economy, including their contribution to wages, job creation, taxes, and charitable giving. It explores the employment multipliers, environmental considerations, and potential transitions in the industry.

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The Role of the Refineries in the Regional Economy

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  1. The Role of the Refineries in the Regional Economy NW Workforce Council August 28, 2019 Hart Hodges

  2. The Role of Refineries in the Regional Economy Significant share of wages paid Very significant multiplier effects • Not as large as some have claimed… Very significant contributions to public sector (taxes) and charitable organizations Environmental Considerations • How to make them top of mind, without being so contentious ?

  3. From the Washington Research Council (2009) “The Economic Contribution of Washington State’s Petroleum Refining Industry in 2009” WRC

  4. … WRC update in 2019

  5. WWU Center for Economic and Business Research (2014) • The average wage at refineries in Whatcom County exceeded $114,000 • Compared to a county average of $41,334 • The employment multiplier is roughly 5.4 • Based on the Washington State Input-Output Tables • IMPLAN gives a slightly lower multiplier • 2.5 percent of the jobs in Whatcom County found at Cherry Point; 11 percent of the jobs in the county depend on activity at Cherry Point • Wages paid at Cherry Point account for 9 percent of total wages paid in the county; 15% of all wages depend on activity at Cherry Point • Business at Cherry Point pay over $200 million in taxes each year (including more than $15 million in property taxes) • Cherry Point businesses make more than $1 million in charitable contributions each year https://cbe.wwu.edu/files/Economics/Employment%20at%20Cherry%20Point%202014.pdf

  6. … Similar Report for Skagit County (2015) • The average wage at refineries in Skagit County roughly $104,000 • Estimate is from the refineries; publicly available data are not available for this sector in Skagit County • Refineries reported 828 FTE, plus 368 contract workers (perhaps 15-20 percent of all manufacturing jobs in the county) • Washington State I-O model shows an employment multiplier of 5.7 • IMPLAN shows an employment multiplier of 3.87 • These multipliers suggest the refineries support 10-14 percent of all jobs in the county. • The refineries account for 5-6 percent of all wages paid in the county https://cbe.wwu.edu/files/Economics/Skagit%20Refinery%20Economic%20Impact%20Study%202015.pdf

  7. Whatcom County report updated in 2019 • The average job at Cherry Point pays $110,690 • Compared to an overall average of $45,491 (in 2017) • The overall average falls to $43,024 if you remove the jobs at Cherry Point • Cherry Point jobs support 11 percent of all jobs in the county • No change to employment multiplier • Similar contributions as before in terms of taxes and charitable giving

  8. … and Fidalgo Island? (2016) • Perhaps 217 refinery workers live on Fidalgo Island • Based on estimates from the refineries; limited resources to explore home addresses of all workers at the refineries • Roughly 434 jobs on the island depend on the refinery jobs • (smaller employment multiplier due to smaller geographic area and type of economic linkages; still relatively large) • No data to talk about wages at the local level

  9. Overall • Very high paying jobs ($105,000 to $110,000 and up?) • Available to a range of workers • Very high employment multiplier • Up to 5.8 at the county level • 6.7 – 8 at the state level depending on software used (not 11 or 14) • Significant tax contributions and charitable giving • Environmental Concerns • we are all complicit, but the externalities matter • My personal view is that goals should be managing risk, minimizing impacts, and mapping transitions; I do not understand trying to choke the refineries to death at this time… • Refineries versus GP… or the Gateway Pacific Terminal (the refineries seem different) • Managing for the status quo versus longer term public good. I have a preference, but understand the challenges are complex… and its an interesting workforce discussion. • How to work with refinery managers and oil company personnel on transitions?

  10. Discussion ?

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