CHEYENNE, Wyo.—Frontier Oil Corp. laid off 28 people at its Cheyenne refinery Thursday as the company wrestles with weak demand for transportation fuels.
The Houston-based corporation said it’s cutting 14 salaried employees and 14 hourly workers from the refinery’s staff of 334.
“This is done really to maintain the viability of the facility,” said Gerald Faudel, Frontier’s vice president of government relations and environmental affairs.
The plant refines heavy crude oil into gasoline, diesel fuel and other petroleum products that are marketed in eastern Wyoming and Colorado, and western Nebraska.
Faudel said the refinery’s costs have exceeded its revenues for the past year. The layoffs are part of the company’s effort to trim $14 million in operating costs annually. He said the company wants to reduce its production costs from about $5-$6 per barrel to about $3 per barrel.
“As we surveyed the industry to try to stay competitive, we did find that we had more employees than other facilities of our size, and you really can’t do that in tough economic times,” he said.
The Cheyenne plant refines an average of about 40,000 barrels of crude oil per day, Faudel said. He said there are no plans to curtail production.
The laid-off employees will receive severance benefits including outplacement assistance.
The U.S. Environmental Protection Agency announced last month that it was seeking a nearly $7 million fine against the Cheyenne refinery. Officials alleged the company dumped hazardous waste into a pond designed to hold only storm water.
“All costs add up, but there’s not a direct relationship” to the layoffs, Faudel said.
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