January 7, 2012 at 3:23 pm #1993
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USW Details Negative Impact of Philadelphia Refinery Shutdowns
Congressional, State Hearings Sought on Likely Price Spikes, Oil Shortfalls
WASHINGTON, Jan. 5, 2012 /PRNewswire-USNewswire/USW — 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.
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 (USW PDF line: http://assets.usw.org/districts/district-12/documents/EAST-COAST-REFINERIES_USW-Backgrounder_01-05-12_Final.pdf )
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.
January 7, 2012 at 3:24 pm #4770
Here is news item on United Steel Workers call for Congress/State hearings to try stop closure and investigate negative impacts.
The 3 local USW leaders/Presidents (Jim Savage -Sunoco PA, Dave Miller Sunoco Marcus Hook, & Denis Stephano – COP Trainer) are source for most article & PDF background articles.
Perhaps these 3 & Union they represent should first look in mirror – USW is constant supporter of Liberal / Democratic politicians who forced these closures, and are helping to put their members out of jobs! And instead of joining in with Liberal Politicians – local, State & Federal (who didn’t do their job keeping plants, allowing oppressive taxes, & passing stupid crushing environmental legislation), Anti-Oil Nimby Environmentalist (who want to kill anything fossil or at least move it out their back door to China) and Liberal Media (who just want to make Big-Oil a blame target instead of doing their job) focusing on these mentioned groups who are real cause.
It becomes easy Labor groups to slip into “them vs us” when they have fight for benefits, pay & work conditions. But when this mentality becomes Anti-Oil they need to be replaced because they are hurting members not fighting for them. Most of East Coast refiners are independent refiners not Big-Oil, even COP has dropped to #8 WW (#13 in EU) in 2011 and downstream is back in consolidation mode where all less complex, less 150MBD, older (East Coast average 50-100 year old plants) are on que for closure due installation new complex JV Crude integrated refineries.
The retoric on these plants fall into the Anti-Oil cadence, big profits/short term downturn/just boosting prices/ect … but everyone only has to read about all recent stupid environmental legislation that takes the future & profits away from the East Coast plants. New USEC Heating Oil rules on HS (2000ppm to 15ppm) diesel which was ~40% pool for the PA plants, CASPR emissions, No MTBE, Ethanol 10-15% blend, Low Sulfur Fuels, New Source emissions and on and on. Then USEC/Western refiners have compete with China-India/MidEast/Russian plants that have no environmental requirements and are newly constructed plants.
The Environmentalist & supportive Politicians/Media have allowed no new US Refineries to be constructed since Garyville 1976 over 46 years ago – current attempts where everyone local/state/industry wants them are in their 5yr of lawsuits with Environmentalist blocking them. Meanwhile dozens a year are installed in “undeveloped” countries now responsible for 48% worlds emissions. Big-Oil my butt!
If you have ever tried hang onto a car by replacing parts – it becomes a no-win position after a few years. That 17, 25, even 40k car cost nearly 2 to 3 times as much replacing parts. Now imagine where we are in some these refineries – with even the youngest USGC Garyville 46 or USEC Yorktown at 55 years old when plant life is really on decline after 30+ years …… then extrapolate it to the 80-125 year (USMW Lima) average. Additionally most of these plants were in era of sweet crude where its cheaper to build new than try upgrade for sour or medium sour crudes ….. let alone heavy sours that takes to be economic.
If you want to read the “Clift Notes” of USEC refinery position then look at trail California has left where the groups I mention pile on taxes, emission investment cost & over-regulation/product specifications until the plants close (and companies fled state). Then everyone sues to stop closure because of loss jobs, tax revenue hit to schools/budgets/ect. and risk/price escalation because of supply loss. California is paying over $0.80-1.50/gal premium for its gasoline – NONE OF WHICH IS PROFIT – because of its actions.
Now fast-forward to USEC because of limited number of Refineries & high rate closures +50% for region and California is going to be cheap at twice price (source from Europe where they pay $8/gal, or long freight source from Asia/MidEast also high …..unless crooked politicians keep allowing China to dump subsidized product to continue open up US markets).
Sorry but USW & local leaders you get F for this effort and being on wrong side of your members needs.
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