US Energy Dept. Report Affirms USW Oil Workers' View on Price Hikes, Northeast Supply Shortages to Follow Philadelphia-area Refinery Closures

PITTSBURGH, Feb. 28, 2012 /PRNewswire-USNewswire/ -- United Steelworkers (USW) leaders today acknowledged the release of a full report from the U.S. Department of Energy's Energy Information Administration (EIA) about the impact on the Northeast of the three Philadelphia-area refinery closures.

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"This report reinforces everything we have been saying for the past six months about the devastating effect the closure of the Philly oil refineries will have on oil workers, energy markets and consumers throughout the Northeast," said USW President Leo W. Gerard.

Sunoco, Inc., announced in early September it would close its Philadelphia and Marcus Hook, Pa., refineries in July 2012 if a buyer was not found. In December, Sunoco decided to idle immediately the Marcus Hook facility, because of what the company said were poor market conditions. In late September, ConocoPhillips Co. decommissioned its refinery in Trainer, Pa., next door to the Marcus Hook refinery, doing so within a week. The USW and several other unions represent most of the more than 2,000 workers at the three refineries.

This past month, Hovensa LLC in St. Croix, in the U.S. Virgin Islands, a joint venture of Hess Corp. and Venezuelan state oil company PDVSA, closed its doors. Hovensa had been a significant supplier to the Northeast and the entire Atlantic Seaboard. The USW represents about 1,700 refinery workers at Hovensa, while other unions represent another 500 contract workers.

"These closures are starting to impact fuel supplies to the Northeast and the situation will deteriorate further if Sunoco's remaining Philadelphia refinery shuts down," said USW International Vice President Gary Beevers of Beaumont, Texas, who heads the union's national oil sector. "Prices are up all over the region for gasoline and heating oil, and it's fortunate we have had a mild winter, or else the heating oil situation would be much worse."

The USW leader representing the refinery workers at Hovensa, Dan Flippo, Director, USW District 9 in Birmingham, Ala., said: "Closing these refineries will make our country more dependent on foreign supplies of fuel  and this is opposite of what our country is trying to achieve." He relates the USW has been analyzing the options for the oil workers, and "We're going to fight for refinery jobs because our nation needs to be able to produce its own fuel at prices we control."

The EIA 32-page full report released Monday shows potential large shortages of gasoline supplies starting this summer, plus shortages of diesel fuel and low-sulfur home heating oil beginning this fall. There is currently no obvious way to ship products into certain areas traditionally supplied by the three refineries, particularly in western New York and Pennsylvania.

Higher energy prices in the Northeast are expected for years to come.

"It is time for Congress and the Administration to act. It is time for the Commonwealth of Pennsylvania to step up to the plate," said Gerard. "It is late in the game, but if all parties work together this disaster still can be averted."

USW Local 10-234 President Denis Stephano, who represents the USW oil workers just laid off from the Trainer refinery, said: "Refinery capacity in the Northeast has been decreasing for the past decade, and it has finally reached a critical point where we know enough is enough and the market cannot be properly served anymore."

Jim Savage, president of Local 10-1 at the Philadelphia refinery, said: "In addition to the negative impact on the Northeast, there will be a painful human cost in Philadelphia and the surrounding counties. More than 1,000 of our members have worked at these three refineries, and there are at least 1,000 more who have worked on a regular basis inside the fence on a contract basis."

At least 10 additional jobs for each job inside depend on the refineries staying open, declared John DeFazio, the Pennsylvania State USW District 10 Director. "These are people who work for companies that supply the refineries and people who work for businesses patronized by our union members and other refinery workers. That's at least 20,000 decent, middle class jobs that will be gone forever, if these closures are allowed to stand."

Local 10-901 President Dave Miller, who represents the workers at the Marcus Hook refinery, adds: "Our union oil workers are doing as well as can be expected. It will be tragic for their families and our communities if these refineries end up staying closed. We know the oil business since many of us have been refinery workers for several generations. If we let these facilities close, our eastern seaboard will suffer and the nation's economy will be affected."

USW represents about 850,000 members in the energy, steel, paper, glass, rubber, service, and public sectors throughout the United States, Canada and the Caribbean.

Contacts:
Lynne Hancock, USW, 615-832-6782, 615-828-6169, [email protected]
Keith Romig, USW, 615-714-2704, [email protected]

SOURCE United Steelworkers (USW)