USW Details Negative Impact of Philadelphia Refinery Shutdowns

Congressional, State Hearings Sought on Likely Price Spikes, Oil Shortfalls

WASHINGTON, Jan. 5, 2012 /PRNewswire-USNewswire/ -- Three United Steelworkers (USW) local union oil refinery leaders spoke here today about the negative effects on employment and Northeast oil product supplies and prices if the three Philadelphia area refineries slated for closure are allowed to stop production permanently. They called for congressional and state hearings to investigate the matter and the replacement of U.S. oil production with oil product imports.

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Sunoco announced in September that its Philadelphia and Marcus Hook, Pa., refineries would close in July 2012 if a buyer was not found. On Dec. 1 the company announced it was idling its Marcus Hook refinery because of poor margins. At the end of September, ConocoPhillips announced it was immediately idling its Trainer, Pa., refinery.

According to reports, the three refineries can process more than 700,000 barrels a day of oil, or about 46 percent of the region's refining capacity that serves nearly six million families in the Northeast region.

Among the impact issues being cited will be the fuel oil needs of the Northeast for heating, diesel, jet and auto fuel; direct employment of ­ 2,500 workers plus thousands of other jobs dependent on the refineries; and national economic security when supplies will have to come from imports, which are subject to uncontrolled price hikes and shortages that cause price spikes.

"Why are our CEOs making permanent decisions when the refining economics affecting our three refineries are cyclical in nature?" asked USW Local 10-1 President Jim Savage. "Yes, Sunoco has lost money in eight out of the last 10 quarters but the company doesn't tell you the billions in profits that they made before that time.

"Right now domestic crude oil is cheaper than the Brent/African crude the Northeast refineries use and that is hurting our business. But five years ago it was beneficial to be a refinery on the coast because the cost of crude oil was cheaper," he added.

USW Local 10-234 President Denis Stephano said the Energy Information Administration's recent report on the effect of the refinery closures would cause a shortage of gasoline and distillates (heating oil, diesel, jet fuel), leading to price spikes. He pointed out some of the major disadvantages of alternative sources of petroleum products.

"Pipeline capacity is insufficient to make up the entire lost production volume and depending on Gulf Coast refineries to ship enough oil products to the Northeast is dicey when hurricanes hit that area of the country," Stephano said. "After Hurricanes Katrina and Rita, a number of refineries were down for six to nine months and it was the Northeast refineries that made up the slack. What happens now when this country doesn't have a back-up system in place?"

Stephano detailed how oil product imports cost American jobs and are also subject to supply shortfalls and price volatility. He urged there be congressional and state hearings.

USW Local 10-901 President Dave Miller spoke about the negative impact the refinery closures will have on the area's communities.

"These refinery shutdowns will force small businesses to close, cost local governments millions of dollars in tax revenue and force schools to operate with millions of dollars less in funding," Miller said. "We have a well-trained and experienced workforce at these refineries and we're ready to help a new owner or owners make a lot of profit."

Background on the Philadelphia-area refineries shutdowns can be found HERE.

The USW is the largest industrial union in North America and has 850,000 members in the U.S., Canada, and the Caribbean. It represents workers employed in pulp, paper and packaging, metals, rubber, chemicals, oil refining, atomic energy, government and the service sector.  

Contact:
Lynne Hancock, USW Communications, o) 615-831-6782, c) 615-828-6169, [email protected]
Gary Hubbard, USW Public Affairs, o) 202-778-4384, c) 202-256-8125, [email protected]

SOURCE United Steelworkers (USW)