Delta Air Lines Buys Its Own Oil Refinery

Friday, May 4, 2012

Soaring fuel costs coupled with no relief from the Obama administration forced Delta Airlines to take the unusual step of buying its own oil refinery near Philadelphia, PA.

Delta Air Lines will buy the Trainer Oil refinery in Trainer, PA, about 10 miles south of Philadelphia, from Conoco Phillips for about $150 million, the airline said in a statement. Trainer can process 185,000 barrels of oil daily.

The refinery will fulfill 80% of the airline’s fuel requirements while saving them $300 million a year. The largest U.S. airline, Delta spent $11.7 billion on fuel in 2011, making up 36% of its operating costs, up from 30% in 2010. Fuel is Delta’s biggest expense, as it is with every airline.

Best of all, according to PA Gov. Tom Corbett, the move will save 5,000 local jobs.

This entry was posted in Airlines, Business, Energy Costs, News, Oil and tagged , , , , . Bookmark the permalink.

12 Responses to Delta Air Lines Buys Its Own Oil Refinery

  1. Seabec says:

    Talk about U.S. innovation? I wonder if Southwest and American Airlines will follow Delta?

  2. TOM339 says:

    This is truly brilliant on Delta’s part.

    Airlines are the unspoken casualty in the doubling of energy costs in the last four years. The costs are passed onto passengers in the form of higher ticket prices. No wonder US carriers are reducing the number of flights. Fewer people are flying.

    Meanwhile, President Obama keeps pushing wind and solar as his green solutions to high oil prices in the US. I haven’t seen a 747 able to fly on wind or solar, have you?

  3. Joe in Colorado says:

    I can envision a future where large city school districts like Los Angeles, Chicago, New York and Atlanta, burned by rising fuel prices, purchase a small refinery in order to keep the school buses operating. Already, many U.S. school districts have slashed and eliminated bus pick ups forcing students to take public transportation to school or rely on their already hurried parents to get to the classroom each day.

  4. Why or how is the cost of fuel the Presidents fault? But good thinking DELTA, Smart move “Don’t how the game is being played, get your own ball and bat and start your own game” smart smart smart..

  5. Rachel says:

    What a great idea. My grandfather says small, locally owned oil refineries once dotted Los Angeles for use in everything from bus companies to food distribution companies. But over time, the were bought out by the big oil companies rendering companies (and consumers) dependent on retail gas prices. High five to Delta Air Lines.

  6. Stephen Iversonn says:

    Dimitri Walker,

    Obviously, your love for Obama blinds you to logic. I’m more than happy to try and help you.

    Americans are using less oil than at anytime in the past 30 years. Cars are getting more MPGs and Americans are driving less. The gas guzzling Iraq War is over and our involvement in the Afghanistan war will draw down in 2014. So why is the retail price of gas so high? Simple.

    Oil is now firmly controlled by Wall Street speculators. Oil is driven up on the Big Board and profits pulled out by investors. We’re completely at their mercy.

    What President Obama can easily do to stop this is go after speculator profits. It isn’t enough to give a pretty speech — he must threaten and act. He has at his authority, the ability to issue an Executive Order stating oil speculator profits will be taxed at 90%. Of course, such action would require nerve and fortitude and this being an election year, it is unlikely the president would dare act.

  7. Brigadoon says:

    Buh Bye OPEC. Buh Bye. 🙂

  8. Fran says:

    All the airlines pass the cost on to clients… you & I take the $ hit. Plane fares are up about 60% & much more. Meanwhile Spirit Airlines will begin charging up to $100 for bulky carry ons that barely fit in the overhead bins- that’s going to be popular– NOT!

    I hate getting hit up coming & going for 1 piece of checked in baggage, per person.
    Tack on $100 bucks for flights – 2 people w 1 checked in bag each, round trip.
    The husband paid his obligatory fees & the airlines lost his baggage for 3 full days.

    The lost luggage dept was in India & I was assured “His baggage would be delivered by 6 pm today” (day 3) she said– when it was already 10 pm.

    Of course they do not refund the fee when they screw it up & lose your baggage, which is why your carry on is a lifeline.

    Lots of carriers, including cruise ships buy fuel in bilk & lock into a rate… but they can still adjust pricing to reflect higher fuel costs, and widen their profit margin.

    In the end the consumer loses.

  9. Rendaculous says:

    Gas prices have doubled since Obama was elected president. This is a fact. Listen, I voted for him and plan to do again in November (can you imagine a climate change denialist like Romney in the White House?) but, Obama’s apologists can’t blame George W. Bush for Obama’s lack of an energy policy to reduce consumer prices. He’s got the keys to the Big House so it’s time to lead.

  10. Scott Dancer says:

    Airline ticket prices are staggering.

    Here’s American Airlines LAX to HNL on Tuesday, June 12, 2012. One Way is: $384.00 for a 2,556 mile flight across the Pacific Ocean. Return on Saturday, June 16, 2012. One Way is: $447.00 back to LA. Round trip is: 831.00. Note I gleaned travel days off-peak, Tuesday and Saturday.

    In 2002, I flew to Honolulu for a Round Trip fare of: $398.00. Little wonder hotels are empty today and our friends in Europe and Asia say they miss visiting American travelers. Travel was once a major supplier of jobs not just in the USA but abroad. All of this changed when fuel prices doubled.

    I salute Delta Air Lines innovative approach to kicking high fuels down. Thanks for blogging this.

  11. Estacada says:

    Obama just signed a compact with Karzai pledging an additional decade of troop involvement after the “official” 2014 date for troop withdrawal.

    Rest assured, this means the Pentagon will have first dibs on whatever petroleum we get our hands on. You see, being a warrior nation comes with a huge price tag.

  12. ChiTOM says:

    What a novel idea! Rock on, Delta Airlines.

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