The tax reform proposed by Donald actually did not cause shock to the entire American business community. Most companies tend not to discuss how much they can benefit from tax reform, because the terms of tax reform have been changing. Companies need to understand the meaning of the policy and carefully consider the differences in subtle adjustments. Almost every leader will make a fuss about tax reform plans, which is commonplace.

But this time, it is energy and airlines' turn to benefit, so why not mention banks? Because Wall Street will always be the beneficiary, no matter who comes to power, it is inseparable from Wall Street's support, and naturally their benefits are indispensable.

The most likely adjustment is corporate tax, and of course, there are corresponding tax cuts after multinational companies remitted overseas cash back to the United States.

In this regard, Yang Cheng is most concerned about tax changes in the energy field, because the actual tax rates of oil and gas companies rank second among all industries. If corporate taxes can be met, the profits of the energy industry will be greatly increased.

In addition, the transportation industry. After tax cuts, the transportation industry can have more funds to improve equipment and services. The aviation industry will undoubtedly benefit the most. The large amount of money saved will be used to purchase more aircraft to achieve the renewal of old equipment.

This is undoubtedly the top priority for Delta. In order to save its life, Delta purchased a large number of second-hand aircraft, which was only due to advanced renovation technology, which made the aircraft not that bad. However, the aging of parts is an indisputable fact. Replacing a new aircraft has long been put on the agenda, which coincides with tax reform. If this expenditure can be deducted from the reduced taxes, the financial pressure of the group will be greatly reduced, which is undoubtedly a good thing.

Not only that, the refinery will also benefit. If the tax reform is successfully promoted, investing in the refinery is not a bad thing now. At least in the past few years of Donald's reign, he would not overturn his proposal or slap himself in the face. But who knows, this guy is moody and can do anything, and it will not be once or twice.

However, there is no problem with intention, but the goal is difficult to find. After entering the 1980s, with technological progress, market competition intensified, environmental protection requirements continued to increase, the refining industry entered the era of small profits, and the industry began to undergo continuous structural adjustments.

In recent decades, the United States' refining capacity has no longer expanded on a large scale, and mergers and reorganizations have been frequent. To date, there are only more than 130 refining companies in the United States, which can provide less than one-quarter of the potential targets for Delta to choose to acquire.

"Do you have a good acquisition target?" Yang Cheng asked.

Bastian was also ready, "Our first choice must be on the East Coast and not too far from Pennsylvania."

"Why is it the East Coast, the Central one not?"

"It's not impossible, but overall, the number of refineries on the East Coast is small, mostly concentrated near Washington and New York, and the scale is relatively small.

There are currently 9 refineries with a production capacity of 62 million tons/year, accounting for only 7% of the total production capacity of the United States. Among them, there are only 3 refineries above the tens of millions of tons, with an average size of 7 million tons/year.

More than half of the refineries have only simple refining processes, and the East Coast is a crude oil-deficient area and lacks large oil fields. The total output is only 1% of that in the United States. The oil used by refineries mainly relies on imported resources and imports from Europe, North Africa and the Middle East through waterways, with poor logistics conditions.

Moreover, due to the longitudinal partitions of the Appalachian Mountains, it is difficult for refineries on the entire east coast to obtain crude oil and oil pipelines from the oil-producing areas in the central and western regions. The export of refined oil is mainly transported through railways and ships.

But it has to be said that the East Coast market capacity is the largest in the United States and is the region with the largest oil consumption in the United States. Last year, the consumption of oil reached 250 million tons, accounting for more than 30% of the total U.S. consumption.

When investing in the East Coast refinery, the refined oil produced can be used in our own use, and we can also supply large areas of cities. Moreover, we have North Sea oil to supply crude oil, so we don’t have to worry about the occurrence of no oil to refine.”

Yang Cheng crossed his legs and asked, "I remember that the refineries in the East Coast are priced on Brent crude oil? Compared with refineries priced on WTI crude oil, the gross profit is too small."

“Yes, when the vast East Coast market is going to fill the gap.”

"Okay, then do you have specific goals?"

“Yes, also in Pennsylvania, the oldest and largest oil refinery on the East Coast of the United States—the Philadelphia Energy Solutions Philadelphia Refinery.

I received news that Philadelphia refineries are on the verge of bankruptcy and they are unable to pay the $800 million spent to meet the EPA renewable fuel standards.

Under the requirements of the U.S. Environmental Protection Agency, refineries must mix crude oil with renewable fuels or purchase quotas, which will significantly increase the production and operation costs of refineries.”

Yang Cheng was very surprised, "Wait? Is this environmental protection standard unified? Or is it only targeted at certain enterprises with excessive pollution?"

"It is a unified boss. Over the past decade, the refining industry in the United States has invested approximately $47 billion in environmental protection projects, mainly to produce low-sulfur and unleaded gasoline that is more conducive to environmental protection.

In order to avoid companies from emitting pollutants at will, the Environmental Protection Agency has also formulated very strict and harsh environmental laws, clean air laws, and relevant regulations on air quality, water quality, waste and automobile exhaust emissions are updated every year. In addition, refineries also need to produce gasoline and diesel with different standards in accordance with federal standards, state ZF standards and local ZF standards. Under such internal and external environment, many petroleum refining companies have high investment and low output, while some refineries are forced to close because they cannot adapt to the increasingly fierce industry competition.

The Philadelphia refinery is the victim." Bastian's face was calm, and he seemed to have expected Yang Cheng's problem.

After a brief pause, he explained, "Boss, what we need is high-quality aviation fuel. The requirements for refineries are already very high. In order to meet the requirements of the EPA, the Philadelphia refineries have undergone equipment updates several times, but as profits continue to decline, the funds invested in the renewal equipment are difficult to recover, which is an important reason for their bankruptcy. The EPA requested $800 million is the last straw that broke the camel's back.

However, after our acquisition, the refinery will change to produce high-quality aviation fuel, and many airlines such as us and our partners will pay for it."

Yang Cheng nodded to show his understanding ~

Bastian took a sip of coffee to moisten his throat and continued, "The Philadelphia refinery is headquartered in Philadelphia, which is conducive to jointly managing the small refinery we acquired before.

Currently, the Philadelphia refinery is mainly engaged in petroleum refining and refined oil sales, with 1,300 acres of land and currently has a crude oil processing capacity of 335,000 barrels per day, about 15 million tons per year.

The Philadelphia Refinery is the largest petroleum refining company in Pennsylvania and the 10th largest refining company in the United States. It employs more than 1,100 full-time employees. They provide more than a quarter of the refining capacity on the East Coast of the United States and are also the largest refinery serving the gasoline and diesel market in the Port of New York~”

Yang Cheng interrupted and asked, "Who is the controlling party?"

"It's Carlyle Group and its joint consortium. Don't worry, boss, they have made it clear that they will sell it~"

Yang Cheng's fingers were beating rhythmically on the handrail of the leather sofa, "It sounds like the situation is not too complicated, and the geographical location and scale are pretty good."

Bastian immediately echoed, "Indeed, the Philadelphia refinery is located in the developed eastern United States, with convenient transportation, and the crude oil suppliers we have previously cooperated with have many, including crude oil from Canada and imported crude oil from Latin America, the Middle East and Africa, which can prevent us from relying on North Sea oil."

Yang Cheng said, "Recently, due to the plummeting oil and gas field of Bakenshale oil and gas fields, the oil supply has been much lower than in previous years. If you think about it carefully, it may be more expensive to transport oil from Baken than imports."

"That's right, and the Philadelphia refinery invested in the construction of a new crude oil railway unloading terminal last year. Currently, due to funding issues, we can temporarily suspend work. If we can take over, make up the operating funds, and wait for the project to be completed and put into use, four units of train crude oil can be loaded and unloaded per day, which is about 280,000 barrels of daily throughput, which is enough to ensure the company's production of the raw materials needed.

To be honest, we are lucky. If the EPA hadn't suddenly made such a move, it would have been difficult for us to acquire the Philadelphia refinery."
Chapter completed!