But Delta chief executive Richard Anderson says the move will help the firm control fluctuations that canoccur in the so-called "crack spread" the gap betweenthe price of crude oil and the cost of refined products such as jetfuel. "What we're tackling here today is the jet crack spread, whichyou cannot hedge in the marketplace effectively," Mr. Andersontold reporters Monday, according to the Associated Press . He called it Delta's fastest growing cost. Some energy analysts say it may take a while before it's clearwhether Delta's strategy will reap the intended benefits. Therefining business can see sharp swings in costs and revenues, andthe Trainer refinery complex requires substantial new investment byDelta. But they also say the company has its eye on an important costproblem. "There's a real scarcity of jet fuel in the Atlantic basinmarket," says Andrew Reed, an industry analyst at theconsulting firm Energy Security Analysis in Wakefield, Mass. He says Delta may have found a solid strategic move "if itworks out." The airline is "moving from one difficultsector into another." If successful, the step could become a model for other airlines. Although the facility will now focus on boosting jet fuel output,that won't be a bad thing for car drivers in the region. ConocoPhillips had already shut down the facility, and it might never havereopened without the Delta deal. Now the facility will continue tomake a variety of oil-based products including gasoline. "It's just that much less gasoline that we're going to need toimport," Mr. Reed says. The future of two other East Coast refineries, including a largerone owned by Sunoco , is also in doubt. They have come under financial pressure becauseof weakened demand and imports from places like Europe . Reed says he will be surprised if both survive. Delta's Monroe Energy subsidiary will pay $150 for Trainer, plusmake a $100 million investment to convert the facility to maximizeits jet-fuel output. Preserving the Trainer refinery means more than 5,000 jobs thereand in related industries, Pennsylvania Gov. Tom Corbett said in a statement. Because those jobs were at stake, the stateis kicking in $30 million to help the deal happen. The jet fuel will flow by pipeline to the region's major airports,including those in New York City , where many Delta planes fill up. Delta's Monroe unit will enter multiyear partnerships with BP and Phillips 66 to buy the needed crude oil and to exchange therefinery's nonairline products for jet fuel elsewhere in thecountry. Delta said it hopes the refinery deal will thus meet 80percent of its US fuel demand. The Trainer facility can refine 185,000 barrels per day, Deltasaid. Fuel has become the largest and most volatile expense for mostairlines. Delta planes burned 3.9 billion gallons of fuel lastyear, about 36 percent of the firm's operating expenses, accordingto the Associated Press. Against that huge $11.8 billion cost, thesavings from the refinery deal appear to be modest. But in the highly competitive airline business, something like thehoped-for "crack spread" edge can be important. We are high quality suppliers, our products such as China Electronic Reading Pen , Quran Pen Scanner Manufacturer for oversee buyer. To know more, please visits Holy Quran Read Pen.
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