The United Steelworkers Union, which represents oil workers, on Jan. 5 called for a Congressional hearing to determine why three refineries in Pennsylvania are planning to close down, and what the likely impact that would be on the region’s economy and oil product supply.
“We want action by the government before another refinery shuts down. The CEOs of these companies must go before Congress and say this is what we are doing, here’s why we are doing it and this is how we’ll make up for the supply shortfall that will result,” Denis Stephano, president of Local 10-24 at the ConocoPhillips Trainer, Pa., refinery, said during a conference call on Jan. 5.
Stephano was accompanied in the conference call by Jim Savage, president of Local 10-1 at Sunoco’s Philadelphia refinery and Dave Miller, president of Local 10-901 at Sunoco Marcus Hook refinery.
The union leaders said their plea to Congress was meant to save the three Philadelphia area refineries, which are targeted for permanent closure this year.
They said if the three plants are closed, heating oil supply will tighten in the U.S. Northeast region, which means more imports of foreign products at higher costs. They added that the Colonial Pipeline, which ships products from the Gulf Coast to the Northeast, won’t have enough capacity to plug the shortfall caused by the expected plant shutdowns.
“The negative impact in this region will be astounding,” said Miller. “Small businesses around the refineries will pack and run. Tax revenues for local government of about $1 million will be lost. The school district will lose $3.8 million in revenues.”
Asked for a comment, Joe McGinn, a spokesman for Sunoco, reiterated the company’s previous announcement last fall that Sunoco plans to exit the refining business.
McGinn said the company was looking for a buyer for the two refineries, but if a buyer isn’t found, then the plants will be shut down.
“We are still in the sales process,” McGinn said. “July is our target date for sale…If we don’t get a buyer by then we’ll begin the process of closing down Philadelphia pending market conditions.”
The announced closure of the three plants would take out of the market 698,000 bpd of total refining capacity. The Marcus Hook refinery has a throughput capacity of 178,000 bpd while the Philadelphia refinery has throughput of 335,000 bpd and Trainer has a capacity of 185,000 bpd.
According to the union, the three refineries have a combined work force of about 2,500, with about 1,100 jobs at the Philadelphia plant, close to 800 at Marcus Hook, and roughly 600 at the Trainer facility.
Stephano said worker layoffs at the Trainer refinery are expected to start on Jan. 16, and the process of a shutdown should be done by month’s end. The plant has been idled since Sept. 30, 2010.
McGinn said the main processing unit at the Marcus Hook refinery is currently idled, but he wouldn’t say whether other units are still in operation.
Miller said the Marcus Hook refinery is scheduled to close on Feb. 29. The Philadelphia refinery continues to operate while a buyer is being sought both Miller and McGinn said.