TINA MARKOE/Courier-Post The tanker Courier heads for the ocean after unloading crude oil at Valero Refining Co. in Gibbstown.

For Darryl Harris, plant manager of Valero Refining Company in Gibbstown, the dredging of the Delaware River's navigational channel from 40 to 45 feet is a no-brainer. More water means the ability to move more crude oil up river for processing for less money.

Environmentally, it means fewer ships on the 102-mile stretch of the river between Camden and the sea, and less lightering, a costly and somewhat risky process in which oil is transferred at sea from a larger ship to a smaller one that draws less water.

And doing a little something for the oil industry, Harris says, is not out of line. In the Northeast...with its aging infrastructure and limited space...oil is the 800-pound gorilla on the river.

It no longer is a secret oil companies on the Delaware are contributing nothing to the cost of the U.S. Army Corps of Engineers' dredging project, though they are expected to save $40 million a year with a deeper channel by moving more product per ship.

The Delaware's six refineries, owned by five companies, make it the largest refining cluster in the United States. The one million barrels of crude oil a day they produce puts the Delaware second only to the Gulf Coast in volume.

Oil tankers accounted for nearly 30 percent of the 3,150 ships that sailed the Delaware last year. In contrast, ships bringing fruit from the tropics represented 10 percent. The river's refineries alone generate $300 million in payroll a year, according to the N.J. Petroleum Council. The value of the products--heating and lubrication oils, gasoline, propane, asphalt, petrocoke, diesel and jet fuels--is estimated at $7 billion.

Sunoco, Inc.--formerly Sun Oil Company--is the oldest and largest company, producing 500,000 barrels a day at its two refineries. Founded in Philadelphia in 1886, Sunoco employs 11,000 people, 3,600 in Pennsylvania.

While it supports the channel dredging, from which it stands to benefit the most by virtue of its size, Sunoco is noncommittal on deepening its private berths.

"We're still evaluating what it means to us," says Sunoco spokesman Jerry Davis, when asked if the company will invest its own money to deepen private berths to 45 feet.

The corps estimates Sunoco could deepen its berths at Hog Island and Fort Mifflin in Philadelphia for $1.7 million, but recover those costs by increasing volumes in two months.

On the other hand, Coastal Eagle Point Refinery in Westville will increase revenues by $4 million a year without spending anything because it is situated in naturally deep water.

Insiders say some companies are reluctant to support the project openly because the public loves to hate the oil business. But Valero, formerly Mobil, is eager to get the job done.

"If the river is deepened, we're prepared to spend between $6 (million) and $10 million to dredge our berths and increase our storage capacity," says Harris. "We estimate five feet more water would allow us to double our import capacity and save us about $6 million a year."
Read on  >>