Engineering News

Shutdown of Philadelphia-area Refineries could Negatively Impact Supplies
December 27, 2011

The U.S. Energy Information Administration (EIA) released a report today that confirms what the USW has been saying about the impact of shutting down the ConocoPhillips and Sunoco Philadelphia-area refineries: supplies of oil products could be negatively impacted with accompanying price volatility and spikes.

Refineries in the Northeast supplied about 40 percent of the region's gasoline sales and 60 percent of distillate (diesel fuel and heating oil) sales in 2010, the report said. About half of this supply came from the three refineries that could be shut down permanently.

"The EIA's report indicates a number of ways that oil product supplies and pricing for the Northeast could be negatively affected," said USW International Vice President Gary Beevers. "Northeast consumers deserve a stable supply of gasoline, heating oil and diesel without price spikes. There is definitely money to be made by keeping these three refineries open."

"The possible permanent closure of these three refineries paints a bleak picture for consumers in the northeast United States," said USW Local 10-1 President Jim Savage who works at Sunoco's Philadelphia refinery. "It is time for a comprehensive energy policy to protect the economic and energy security of real people, rather than leaving it to the whims of oil company CEO's in their never ending search for more and more profits."

The EIA said alternative supplies of oil products could come from the Gulf Coast; increased product imports, especially of gasoline; more output from remaining Northeast refineries; and rail shipments from Midwest refineries. But there are problems with these options as well.

"Remember how many of the Gulf Coast refineries were down after Katrina and the Northeast refineries had to pick up the slack?" said USW Local 10-901 President Dave Miller who works at Sunoco's Marcus Hook refinery. "Think of how high the price of gas will go when our three refineries aren't there to cover for the loss of Gulf Coast supply."

"Oil product imports aren't the answer, either," said USW Local 10-234 President Denis Stephano who works at the ConocoPhillips refinery in Trainer, Pa. "Isn't it bad enough that we're dependent on Mideast oil supplies and now we become dependent on other countries for our gasoline and heating oil? How does that make our nation more secure in a national security crisis?"

Representatives Edward J. Markey (D-Mass.), Henry A. Waxman (D-Calif.) and Robert A. Brady (D-Pa.) decried the shutdown of the Sunoco and ConocoPhillips refineries and the impact this will have on Northeast consumers.

"This analysis by the Department of Energy shows that these oil companies are putting profits ahead of the people living in the Northeast," said Rep. Markey, top Democrat on the Natural Resources Committee. "As temperatures drop this winter, consumers in the Northeast shouldn't have to face price spikes for home heating oil, gasoline and other fuels created solely by oil companies deciding to shutter refining capacity."

"The closure of these refineries threatens the economic well-being of the Northeast," Beevers said. "In the past, government stepped in when private industry threatened commerce. It's time it does so again."

Source: United Steelworkers

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