(OilPrice) For this latest meandering down the path of energy we are going to take a look at a couple of interesting tales intertwined, with the first anecdote beginning with the incongruous line ‘an airline walks into a refinery’. This is because airlines and railroads are contributing to the domestic energy boom in a fascinating fashion, and this post takes a look why.
In a move from somewhere out in left field, Delta Air Lines decided in late April to tackle energy risk management head-on by taking a rather unorthodox step of managing their fuel cost exposure by…purchasing a refinery. $150 million later (after a $30 million subsidy from the Commonwealth of Pennsylvania), Delta bought the Trainer refinery just south of Philadelphia, which produces 185,000 barrels a day. In addition to the purchase, they are now retrofitting the refinery (to the tune of $100 million) to maximize its jet fuel output.