Equality State News

The HollyFrontier petroleum refinery in Cheyenne announced that it will transition to production of renewable diesel fuel and will lay off approximately 200 employees over the next 18 months.

The transition plan comes in response to decreasing cash flow as a result of the COVID-19 pandemic and the company's expected loss of the the EPA's small refinery exemption. 

"Demand for renewable diesel, as well as other lower carbon fuels, is growing and taking market share based on both consumer preferences and support from substantial federal and state government incentive programs," Mike Jennings, HollyFrontier president and CEO, said in a statement. "This represents an exciting opportunity to enhance both the profitability and environmental footprint of HollyFrontier through organic investment."

The company expects to spend between $125 million and $175 million to repurpose the refinery. The project is expected to be completed in the first quarter of 2022.

The HollyFrontier refinery has operated in Cheyenne since World War II, employing community members for decades. 

In a statement on the transition plan, Sen. John Barasso (R-WY) called the layoffs "heartbreaking."

"The COVID-19 pandemic has hurt businesses all across our state, including oil refineries," Barasso said. "At the same time, EPA has failed to protect small refineries from unreasonable compliance costs under the Renewable Fuel Standard. As I have told EPA countless times, relief from the RFS is critical to small refineries. EPA must provide that relief before any more jobs are lost."

This is the first time that HollyFrontier has converted one of its refineries from petroleum to diesel. The company anticipates that the site will produce 90 million gallons of renewable diesel fuel annually once the conversion is complete and the plant is operational.