05 January 2012 23:09 [Source: ICIS news]
HOUSTON (ICIS)--Refinery workers are asking the US Congress to examine refinery closures in the northeast, saying such actions would raise raise gasoline and heating oil prices and put thousands out of work, members of the United Steelworkers Union (USW) said on Thursday.
“One of the things we’re asking for in talking to the congressional delegation is for congressional oversight,” said Local 10-234 President Denis Stephano at ConocoPhillips Trainer refinery in Pennsylvania.
“Before anymore refineries shut down, the US congress should require the CEO, people making the decision to shut refineries down, to come before congress and explain why the refineries are being shut down.”
USW is asking for a government hearing on the issue.
In early September, Sunoco announced plans to sell its 335,000 bbl/day Philadelphia and its 178,000 bbl/day Marcus Hook refineries in Pennsylvania, with the intent to idle the refineries if they had not been sold in the summer of 2012. On 1 December, Sunoco idled the Marcus Hook refinery prematurely due to poor economics.
In late September, ConocoPhillips began to process of idling its 185,000 bbl/day Trainer refinery in Pennsylvania pending the refinery’s sale. The company also shut down associated pipelines and terminals.
The three refineries combined employ about 2,500 workers, not including contractors, builders, or local businesses that depend on refinery workers for sales, the USW said.
“The governor of Pennsylvania should be asking for oversight and should have those CEOs in his office tomorrow,” said Stephano.
In December, the US Energy Information Administration (EIA) reported the refinery shut downs would tighten fuel supplies, resulting in higher energy prices and market volatility in the northeast.
USW said members of Congress responded to the EIA report with letters to the US Department of Energy and the Federal Trade Commission saying that consumers, workers and US energy needs would not be served by the elimination of refining capacity.
With two of the refineries closing as the winter temperatures dropped, there was concern about heating oil prices and supply. Stephano said the loss of heating oil production does not only affect Pennsylvania but the entire northeast.
Sunoco Philadelphia’s Local 10-1 president Jim Savage said the US northeast consumes about 70% of all residential heating oil in the country.
Diesel is in high demand abroad, therefore heating oil imports to the US are limited, he said. Furthermore, Savage does not think US Gulf heating oil supplied through the Colonial Pipeline to the east coast will make up for the supply lost due to the refinery closures.
“We don’t think it’s an exaggeration to say that people could literally freeze to death in their homes because of [these] corporate decisions,” said Savage.
There have been six to seven price spikes for heating oil in the past ten years, and this will get much worse with the removal of local production, he said.
In Sunoco’s third-quarter conference call, the company reported losses for refinery operations, mainly because of the high price for Brent crude. Sunoco has reported losses for its refinery sector for more than two years.
“This industry is cyclical in nature,” Savage said. “You can’t look at the last two months, the last two quarters or the last two years.”
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