 I'm Jay Fiedel. It's a two o'clock block today. We're talking about the military in Hawaii more specifically. We're talking about the Pearl Harbor Naval Shipyard, and we're talking about Par-Hawaii, Par-Pacific. And we're joined by Captain Greg Burton of the Pearl Harbor Naval Shipyard. He's a commander there. And Mark DeWilliger, he's with Par-Hawaii, and he sells oil. Am I right, you guys? I get it right. Yeah, good afternoon, Jay. Thanks for having us. Yeah, good afternoon, Jay. Captain, why don't you tell us what it's like to be the commander of the Pearl Harbor Naval Shipyard? It is a big undertaking enterprise, isn't it? Hey, it is a big enterprise. And, you know, it's referred to as the Crown Jewel in the Pacific between the West Coast of America and the Far East. But that Crown Jewel really goes to, not the facilities in the dry docks, but it goes to the talented folks that work here. And there's over, if you include contractors, over 7,100 folks that work here. Those are the Crown Jewel that I would refer to, surrounded by the shipyard. There's all kinds of things going on. Usually our dry docks are full. We're the busiest fast attack home port in the Navy with approximately 16 home ported ships here. And we have responsibility for four home ported ships in Guam as well. So a lot of stuff going on on the submarine front. And we also have 10 surface ships home ported here that we contract out maintenance to do maintenance on those. So, you know, our mission is to deliver ships that are fit to fight back to the fleet. And we do that with a skilled, talented workforce on a daily basis. Concerned about the workforce, concerned about safety. It's an industrial environment. We're the largest industrial employer in Hawaii. And it's quite a journey every day. I love coming to work. I love everything about the shipyard. I like the dry docks. You have a thing with dry docks. Can you talk about why? I mean, if you've ever been to a shipyard and you've looked into a dry dock and seen a ship, you know, a large ship, submarine ship out of the water on tiny blocks, it's really an engineering marvel. And it gives us an opportunity to get in there and do maintenance where we wouldn't otherwise be able to do, you know, pier side, you know, painting and preservation and working on hull and backup valves and all those kind of things. It's just a great opportunity. You see some highly skilled technicians doing just amazing work with big, huge pieces of equipment and machinery. So it's just a great place to come. So just a question that comes to mind, can you put a carrier in one of those dry docks? Yes, we can. We can fit a Nimitz class carrier in our largest dry dock, dry dock four, though the Navy has no plans to do any carrier work here in Hawaii. By dimensions, we can fit the carrier. We don't have the right utilities lineup to serve us a carrier. But by dimensions, we could dry dry dock a carrier here in Pearl Harbor. It must be, are you an engineer? You told me before that you were a submarineer and for a while you were in the Army, but are you an engineer? I do have engineering degrees. And I've worked in the naval nuclear power program in the Navy for almost 34 years now. So I have mechanical and electrical engineering degrees and I work nuclear power in the Navy for 34 years. So I'm a naval officer. So being a leader comes first, but I do have much engineering experience. You have to be a leader if you're commanding 7100 people. Yes, sir. So are you academy? I am not. I enlisted as a machinist mate in the Navy and then applied for an officer program, got one and went right back in the nuclear program after graduating from the University of New Mexico and then spent my time as an officer operating submarines and then wedged my way into the engineering duty officer community, which that community is responsible for building ships, maintaining ships, modernizing ships and then decommissioning those ships at the end, cradle to grave. And I found my niche in the shipyard part of that enterprise. Yeah, that's great. Well, I love asking, you know, military officers about their careers and histories and how they have gone through the system, so to speak. And I really enjoy this conversation. So, Mark, you have some, aside from being an executive with PAR, you have some military experience, too. Can you talk about it? I did, yeah, Jay. So I was an Army logistics officer for 12 years here. My last duty station was out here in Hawaii, ended up at Fort Shafter up at the U.S. Army Pacific. So background was, you know, 12 years as a logistics officer should doing anything from beams to bullets to, you know, fuel, pipelines, you know, other operations like that. Did you have a good time? Oh, I loved it. It was great. You know, just after 12 years decided it was time to start a family. And, you know, my wife and I decided it was time to transition out and then join the civilian sector. And that took us back to the mainland for about four years and then had the opportunity to come back out here to Hawaii and join the PAR team. And that's where it brought me here today. So don't regret any of it. Honestly now, Mark, are there mornings where you wake up and you look out the window and say, gee, I would be retired by now. I could have stayed in if I have those reminiscent thoughts. Every once in a while, you have that. But, you know, at the end of the day, I'm back here in Hawaii enjoying life. So it's a tough, it's hard to look back in the rear-view mirror, right? Yeah, well, yeah, but sometimes it happens, you know, involuntarily. I continue what happens to me. That's why I ask you. So anyway, so tell us about PAR. What is PAR? What are you doing for PAR? So, you know, PAR Pacific is our parent company and we have essentially four oil refineries, one out in Newcastle, Wyoming, one up in Tacoma, Washington. And then we have two out here on the west side of Oahu, both out in the Campbell Industrial Park. On top of the oil refineries, we also have a fairly large logistics hub. We have a pipeline here on Oahu. And we have several terminals, one in Kauai, two on the Big Island, and one in Maui. You know, and through that, we support a retail organization here in Hawaii, as well as out in Spokane, Washington. And, you know, glad that I could be part of the show today and partnered with the military because they are one of our biggest clients. And, you know, we service and support them with different grades of fuel that we produce right here on Oahu. That includes aviation fuel? Right here in Oahu, I should say. It does, yeah. So we provide the military with what we refer to as JAA or their jet fuel, as well as F-76, which I believe is the Navy's kind of equivalent to diesel. Okay. Is that those bunkers? That's what they call a bunker. Yeah, the different bunker fuel, sure. And then at one point, we did support them with JP-5 as well, which is kind of a little different grade of jet fuel that they use for the aviation on the Navy ships. You're doing a refining anymore? We do, yeah, absolutely. So we have two refineries out here on the west side. One of them is currently reduced in capacity, basically, because of COVID and the lesson in the demand for product right now. But the other one, which we refer to as Par East, even though it's out here on the west side of the island, it's still up in full operation and we still refine fuel on a daily basis. Interesting because it's a metric for how well the economy is doing. If you're selling a lot of fuel, the economy is humming right along. If you're not, it means people are staying home and not doing much. Certainly. And COVID has definitely put an impact, I mean, obviously, on the entire economy of Hawaii. And we certainly see that in the fuel market. With the lower demand, people not commuting as much. You see that the gas pump, and certainly with airlines not flying nearly as frequently as they were in the past, we saw a significant decrease in the jet fuel demand. Captain, you really need to know, Mark, do you know, Mark, do you deal with them? Do you pick up the phone and say, hi, do you have Zoom meetings? I don't. He sounds like a great guy, though. Well, what is it? What is it with fuel for you at the Pearl Harbor Naval Shipyard? I mean, I can imagine a lot of people working on ships there, but you don't have a lot of vehicles, do you? Or do you? No, I would say, you know, the base, really joint-based Pearl Harbor Hickam coordinates all of the fuel for the surface ships. And then the submarines, except for some back-up diesel generator power, really run on nuclear fuel. So I don't have that much interaction with, you know, the kind of fuel that marks in the business of selling. Okay. So, you know, the bottom line of our program today, in fact, the title of it is how your respective organizations demonstrate how the effect, the economic effect of the military on the economics of Hawaii. So, Captain, can you address that? How do you feel the shipyard, particularly? And I suppose we can talk about the base, too, in general. How does it affect the... And I think we should also talk about the history of it. We're talking before the show about how many, you know, it's, well, gosh, it's 170 years ago, the Navy was at Pearl Harbor. That's a long time. And so you are integrated, but how? How do we find indicia of that today? Yeah, this whole area of the joint-based Pearl Harbor Hickam really are sacred lands, Puhu Loa of Pearl Harbor. The shipyard was authorized by Congress back in 1908, where we started construction of our first dry dock, which finished in 1919. And if last year, in 2019, we had the 100-year anniversary of dry dock one. We worked with the Hawaiian delegation, and we gave dry dock one a name, Keau Namano, which means the realm of the sharks. And so we felt a great connection there, and that history continues to grow. We've done, you know, great things in the shipyard over the years. Many folks remember the USS York town after the bombing in Pearl Harbor with initial estimates of three months from the shipyard. We had just broken the Japanese code in the bottom of building one here, right on shipyard property. That's where the code breakers were. So another piece of history that is tied directly to the shipyard. Admiral Nimitz came down and said, you have three days to turn that ship around, and the shipyard went to work on it, actually caused brownouts on the island, so we could supply enough power to all the welding that was going on. And that ship turned around in three days, got out of dock, and was pivotal in the Battle of Midway and the turning of the tide of World War II in the Pacific. And that history continues now. We've been working on Los Angeles class submarines, destroyers, cruisers, and now the new Virginia class submarines that have been coming in to replace the Los Angeles class submarines that are being inactivated at the end of their service life. And we've been learning how to do maintenance on those new submarines, and we've been doing really well. Where the Virginia class center of excellence is designated by our parent command. So a lot of really great things going on in the shipyard, and not just today, but through that history from 1908 to today. But when you talk about economic impact, you know, if I could pull back a little bit and just talk about some of the numbers, you know, that are beyond the shipyard. But I think I can share some recent numbers with you for defense spending on the island. Well, in Hawaii, defense spending has been, you know, recently, in recent years, about 7.2 billion per year to the Hawaii state economy. 4.9 billion of that goes directly to payroll. So, you know, local island paychecks, about 2.3 billion of that in contracts. And so, you know, 49,000 local jobs with the payroll and about 30,000 jobs through federal contracts. So really a huge influx from defense spending. When you bring that down to the Navy, about 57.8% of that 2.3 billion in contract spending stays local in Hawaii. And then when you bring it down to the shipyard, you know, I mentioned earlier that we take in about a billion dollars every year. And of that billion dollars, about 731 million goes directly to paychecks. We also have a big impact with the local contractor base that works on our surface ships. And we let anywhere from 150 to 250 million dollars a year that goes to local contracts, local contractors to work on surface ships. So, you know, that's a very significant impact. During COVID, a lot of that work has continued. We're up around 91, 92% of full capacity even during COVID. We're designated mission essential and we have a critical national security mission to carry out in the shipyard. And that has largely been able to continue. So, you know, you talk to folks that are working in the shipyard and multi-generational folks, they understand the critical nature of this work and they understand why it's important to come to work and do the welding and do the pipe fitting and the ship fitting and everything else that has to go on to deliver these ships back to the fleet, even amidst this battle against the unseen enemy COVID-19. But that's some of the impact that Pearl Harbor brings to the local economy. How do you cope with COVID? I mean, what special arrangements have you made? I assume masks and distancing, but have you put partitions in? Have you changed work schedules? What have you done to minimize the risk to, you know, the people who work at the shipyard? Good question. We've done a little bit of all of what you just talked about. You know, I encourage people to do what I call take five. And it starts with a personal screening, you know, at home before you come to work. You know, what's my temperature? Do I have any flu-like symptoms? You know, so that's where it starts. You know, if you feel any flu-like symptoms, don't even come into the shipyard, right? And then once you come into the shipyard, I ask them to wear their mask. I'm not wearing a mask right now, but I'm isolated in my office and the door shut. I do have my mask right here. But wearing masks are important. That physical distancing is important. We also do frequent hand washing. We clean our high-touch areas and high-traffic areas three times a shift. And these are all, you know, in our policies and protocols. We've got, you know, documentation to show that we're doing that. So there's a lot of things that we've done in the shipyard. We've also learned, you know, when supplies were limited, we also made almost 30,000 face masks so that every employee here could have five masks. We developed, using the Center for Disease Control formula, we made our own, you know, hand sanitizer solution. And we distributed that hand sanitizer solution to other activities so they could have someone when we were on kind of a short supply here on the island. So we have done that. We have tried to spread our day shift across our second and third shift so that we could minimize the footprint on any given shift so that we could increase that physical distance and minimize the risk to our employees. We've also encouraged our employees to telework when they can and teleworking that contributes to the mission and is in accordance with their, you know, position description, you know, those things that they're getting paid to do. It's not just, you know, go home and telework. We actually have a critical mission to accomplish here and when we can support that teleworking, we're encouraging our folks to telework. So, I mean, that kind of paints the picture of how we're dealing with COVID. We actually have a very robust program. You know, we do also have temperature screening for folks coming in at random locations just to continue to remind folks that, you know, hey, we've got to wear the mask, physical distance, consider others so that we can continue this critical mission here in the shipyard. Wow. That's a lot of things. Have you been successful? I mean, have there been cases? Have you had issues where people didn't follow the rules or even did follow the rules and wound up getting sick on the outside? We've, I mean, we've certainly had our cases in the shipyard for operational security reasons and for privacy reasons. I can't give you any numbers. The numbers in the shipyard have remained low. We had a few cases early on as did the island and then we had that long, you know, not much was happening on the island and then we had this second phase, you know, where we had a spike in the island and then we did have increased numbers in the shipyard, but we've been able to maintain, like I said, about 91, 92 percent full capacity here in the shipyard. We've taken some impacts with COVID, but we're still able to continue the mission and deliver back to the fleet. To the extent you can discuss it, I'd be interested in knowing, you know, the trends. Do you have substantially more people under your command now or less than you did, you know, a few years ago? Do you have substantially more funding than you did? I mean, how is that moving up or down or sideways? In the shipyard, we've been consistently moving up. So our workload has moved up. The number of employees that we've hired have moved up. Five, six years ago, we were right around 4,000 and now we're right around 6,500, 6,600 total. So we are moving up. We're going to be at this level for the next foreseeable future. We do see our workload continue to increase. And so, you know, the way that we're going to get there is with innovation and, you know, increasing our productive capacity to do more with the number of employees that we have now. And you're going to stay here. You mentioned, for example, that you cover ships out of Guam and I suppose other areas, all areas in, you know, western Pacific, Indo-Pacific, if you will. But I assume that this is going, at least as we know today, this is going to remain the home base shipyard for the whole area. And there's no competitive shipyard elsewhere within the American fleet. Well, we have, I mean, we have four public shipyards and, you know, two west coast shipyards, the Pearl Harbor Naval Shipyard being one of those west coast shipyards, the other shipyard being Pearl Puget Sound Naval Shipyard in Bremerton, Washington. All of us really every year look at our workload, you know, down the fiscal or the future year's defense plan, you know, for the government lineup. And we level load our shipyards accordingly. So there's a lot of puts and takes with the shipyards to make sure we've got a pretty level-loaded workload through, you know, through the out years. So, but I mean, if you're talking about, I mean, we are the, you know, we are the shipyard between the west coast and the far east. And there's really no competition there. We've, we've, we see a continued increasing workload just based on, you know, the new Virginia class submarines coming in with the components of surface ship maintenance that we take care of as well. Well, that's good for Pearl Harbor and it's good for Hawaii. It absolutely is. Mark, you know, I was asking the captain all these questions because I wanted to sort of interest you in another career. Possibly, you could join the Navy now. He wouldn't be too late. I can put you guys together. Maybe you can have a conversation about it now. Yeah, that's great. Hey, you know, captain, I'll guess your number after this. We'll see if you can go through. Hey, we, we, uh, we have over a thousand engineers employed at the shipyard. I mean, it's quite a think tank. You have some of our graduates from Think Tech Hawaii over there too. I appreciate it. Yeah, we, I think we have two of yours. So thank you. So, Mark, you know, tell me how, you know, PAR Pacific and, you know, your operations affect the state in general. And, and I suppose the question is, there's a triangular thing happening here. It's PAR. It's the Navy. In fact, the whole military and it's the, you know, the civilian community. Can you try to tell me, you know, how you affect both of those other, other areas? Yeah, certainly, Jay. I mean, so, you know, PAR, we are the, the only refining assets out here on the island. So when you look at, you know, the refined product, the gas stations or the jet fuel at the airport, the military, you know, we're, we are the ones producing it here on the island. And so with that being said, you know, it's certainly tied to the economy when it goes up, you know, things are great when the demand goes down, things tend to trend downward. And, you know, our relationship with the military is key in that as well. You know, I spoke earlier, we provide them with jet fuel as well as some Navy diesel. But, you know, there's other programs that we have been partnering and working with the military and particularly the Navy, doing different proof, proofs of concept. You know, as the captain mentioned, you know, Hawaii is certainly a strategic location out here in the Pacific, where that last stop between the West Coast and the Far East, right? So with that, fuel reserves are certainly kind of, they're critical, not just for, you know, the economy of the islands and, you know, the civilian population, but certainly from a strategic defense standpoint. And so in that, you know, we've been partnering with the military to come up with different alternatives and options for them to provide fuel. So one of those, you know, we support them and provide fuel up to Red Hill, which is, you know, fuel storage facility. And in that, you know, they utilize our pipeline and we push them product. One of those proofs of concept we did was a few years back in 2017, where we did the reverse to see if we could actually receive fuel from them, if for some, you know, unforeseeable reason we couldn't get fuel out to the island, they could provide us fuel and then we could help distribute from there. Yeah. A couple other proofs. We have a single point mooring where the crew is actually deposited for the refineries. We have a mooring that floats out about a little less than two miles off the coast and a cruise ship will come in, we'll connect it and hold it in position with some tugboats and then we'll receive the crew load from the ship. One of the other proofs concept we did was with the Navy, or excuse me, the sea lift command vessel a couple of years ago, the empty Empire State. And we wanted to see if it would be possible to bring a sea lift command or a Navy ship and connect it to our mooring. Again, for that same concept, could they receive fuel from us or could they deposit fuel into that and utilize our systems and pipelines? So, you know, in conjunction with the military, we try to come up with different ideas, other opportunities for future development, not just to continue to support the military, but to support the entire Hawaiian economy. Yeah, that's really interesting that you might have special reserves to get back from the military and then distribute them in times of crisis to the community. That's something. Absolutely. You know, I mean, out here in Hawaii, we're so remote, we're in our own holistic support bubble, if you will, taking care of not just military, but civilian needs as well. Yeah, have to work together. So what about renewables? You know, I know that Par was trying to be flexible about the development of renewables. Mostly what you do is fossil fuel, I guess, but, Quiri, have you done anything or you plan to do anything on renewables? You know, absolutely. As an energy company, particularly out here in the Pacific, where this is our land, we all need to take care of it. As a company, we want to grow and adapt with that as well. And we are seeking out different avenues and opportunities, some of those with biodiesels and things like that. I don't have specifics on all the programs we're doing, but we have engaged in multiple avenues to pursue those. So what do you see the future for Par? I mean, through COVID, I guess it's affected you in terms of sales to at least the local community. And then, of course, you get to the underside of the tunnel and you look for the light. It's out there somewhere. There is a better time coming, hopefully soon. What is it going to be for Par at that time? What is it going to be for the consumption of fuel here in Hawaii, both by the civilian community and by the military? Do you have a view of that? I mean, our view is certainly to be the enduring source of energy for the Hawaiian islands in the future and continuing and onward. And with the way the future is going, we all need to be flexible and adapt. And I can certainly see where we're going to continue to incorporate more of those renewable resources and different avenues of energy into our company portfolio moving forward. So Par's stance is we're definitely going to continue to be that powerhouse for the future for Hawaii. Somebody asked a question. It's exactly identical to a question that I was going to ask. Could you ask how the apprenticeship program with HCC is going? Is that you, Captain? That is me. What is that about? What is the program about? And what are you doing with HCC on that? We have a great apprenticeship program. We're in the 100th year of our apprenticeship program. We've graduated about 5,600 apprentices since its inception. The apprentice gets an associates degree with Honolulu Community College after their four-year apprenticeship as they learn a trade and become mechanics at the end of that apprenticeship. We teach 22 trades across 27 shops and nine codes. It's really the life force that injects into our shipyard talent pool that makes up that skilled labor. We've got a great relationship with our union, and we take care of those apprentices. They're really our lifeblood. The key trades really are your machinists, marine machinery mechanics, pipe fitters, electricians, and ship fitters are the key trades there. It's been going on for about 100 years. It's going to continue. We certainly get a lot of applicants, folks that want to come in and participate in our apprenticeship program. Is there room for Mark in that program? If not, is there room for me? I need a little training in that. Yeah, we'll have to really scrutinize your resumes, but yeah. Well, we're out of time, you guys. Mark, let me ask you to tell our viewers what you would like to leave with them about PAR. What may they not know about? What should they know about? How does PAR affect, integrate with the local economy? Why should they appreciate that connection? You know, really, PAR is a family organization, and we are here as part of the Hawaiian Ohana, and we truly support the entire Hawaiian Island chain, and we pride ourselves on being the sole provider of energy to the Hawaiian Islands, whether it's for HIKO, to create electricity for all of us or to the gas station to power our vehicles. That's why we exist. We're here to support the community and to take care of the Ohana. Thank you, Mark. Captain, back in the 60s, I tried cases, both trial counsel and defense counsel in the 14th Naval District. The Coast Guard put me on loan to the 14th Naval District. Some of the guys that I tried cases against in that context went on to be Navy admirals, as a matter of fact, a long time ago. So I have a soft spot for the Navy in the 14th Naval District. And I wonder if you could leave your takeaway with our viewers on what it all means in its connection, in its connection with Hawaii historically, and its connection economically right now. Sure, we've talked about a lot of things, but most of that was, you know, backward-looking and current economic impact. But as we look forward, this shipyard is going to stay a crown jewel right here in the Pacific with the type of mission that we have right now of delivering those ships that are fit to fight back to the fleet. And as we look forward, the Navy has agreed across the shipyards to optimize the shipyards. And the Navy is assessing building a new dry dock here in the shipyard, among other things, with, you know, a waterfront production facility that would optimize our operations in the shipyard. The overall plan is about $21 billion across the shipyards, and we would expect to get about $5 billion of that right here in Pearl Harbor. So our mission is going to continue to move forward. We have great support from the Navy to continue to support the shipyard here right in the middle of the Pacific in this extremely strategic location that's going to support families here on the island for many generations to come. So I appreciate you having me on the show today, Jay. Yeah, well, both of you guys have, you're part of the, you know, the central nervous system, the supply system, the economy, if you will, of the state of Hawaii. So I think people have to see you in that context. You're an essential element in our economy. Thank you, Captain Greg Burton. Thank you, Mark Twilliger. Really appreciate you coming down. Thanks for having me on. Thanks for having me. Aloha.