A new Washington State Refinery Economic Impact Study (PDF) analyzes how the state’s five refineries affect the economy and how that could change in the future. The study helps readers understand how changes in the oil market might impact refineries, refinery workers, nearby communities and tribes. It also examines how competitive Washington’s refineries are when it comes to converting their facilities to make alternative fuels.
The study was developed with the Western Washington University Center for Economic and Business Research and looks at the economic impact of oil refining in Washington. The Legislature required this report as part of the 2023-25 state operating budget (Chapter 475, Sec. 132 [19]).
Key findings from the report
- Washington’s refineries are major local employers that offer higher wages than most other industries in the areas where they operate. Refineries employ a large number of workers – approximately 2,200 permanent employees and 2,000 contract workers. Many of these workers are represented by unions.
- Washington’s refineries contribute more than $292 million each year in state and local taxes. This funding supports public services, pollution prevention, environmental cleanup and more.
- Tribes with and without treaty rights, along with tribal citizens, have vital perspectives on the impacts of oil refining in Washington. Their input must be central to any conversations and decisions about current and future refinery operations. Many refineries are located on or near tribal lands, including usual and accustomed territories. These operations have affected tribal treaty rights — such as the right to harvest, use the land, and carry out cultural practices — and have harmed environmental health by polluting traditional food sources and causing hazardous spills and flares.
- Limits on greenhouse gas emission limits and other climate and clean energy policies in Washington and the surrounding regions are expected to bring changes to the state’s refinery industry. The Climate Commitment Act, statutory greenhouse gas limits, the state Clean Fuel Standard, and other policies will impact refinery operations as emissions caps decrease and demand for zero-emission vehicles increases.
- As demand for petroleum decreases, refinery operations will change. The economic impact will depend on how much and how quickly demand declines. Most petroleum products made in Washington are sold in markets with greenhouse gas limits, which helps reduce demand for petroleum-based fuels. As production and jobs decrease, there will also be drops in worker income, overall economic output, and tax revenue. However, using less petroleum is expected to lower health care and environmental costs.
- All five of Washington’s refineries are likely to change their product mix or function as part of achieving net-zero emission limits by 2050. Refineries in Washington may adjust the types of products they make, possibly in stages over time. While they may continue operating in the future, they are likely to shift their main products or overall purpose. Some refineries may eventually close, but that is more likely to happen in the long term.
- Washington’s refineries are reasonably well-positioned to produce alternative fuels, but likely at lower levels than their current petroleum-based production.
- Pierce, Skagit, and Whatcom counties have some alternative job options, but not enough to replace refinery jobs if there’s a major decline in employment. Some nearby counties also have industries that could be a good match for former refinery workers, but there aren’t currently enough openings. Workers who change careers are also likely to earn less than they did in refinery jobs.
- Refinery sites could be used for other purposes in the future, with industrial uses generally being more practical than non-industrial ones. However, cleanup could be costly and time-consuming, depending on the type and level of contamination, and may require multiple methods. Potential future uses vary in terms of economic, health, and environmental benefits and challenges. The feasibility of each option depends on contamination levels and other site-specific factors.
- Refinery operations contribute to human health and environmental harms, with associated economic costs, impacting their local economies, environments, neighboring tribal nations, and surrounding communities. Many overburdened populations are located near refineries and face disproportionate exposure to pollution. The Environmental Health Disparities Map highlights the increased risk to vulnerable communities in these areas.
This study is not a policy report and does not make policy recommendations. But the data provided in this study can be used to understand potential changes and may be used to inform additional planning and policy processes in the future.
Commerce and WWU jointly hosted a webinar after the report was released on Thursday, April 3, where members of the project team discussed the background and approach of the study, key findings, and next steps, followed by participant Q&A.