USW Opposes Export of U.S. Crude Oil; Cites Resulting Job Loss, Other Factors

Contact: Lynne Hancock, USW, 412-562-2442, lhancock@usw.org

Pittsburgh—The United Steelworkers (USW) said today that it opposes export of U.S. crude oil because it would cost jobs at U.S. refineries, raise prices at the gas pump, decrease national security and increase environmental degradation.

“Lifting the ban would benefit oil companies that engage in oil exploration and production, but it would harm their refining operations that have to purchase crude at the market price,” said USW International President Leo W. Gerard. “It also would hurt independent refiners that do not engage in oil exploration.”

U.S. refiners have benefited from the increased supply of domestic oil because it has reduced their raw material expenses. In the last few months the price for U.S. crude has been as much as $20-$25 a barrel lower than that of international crudes. This decreased cost has enabled refineries like Philadelphia Energy Solutions (PES) to operate. PES is the former Sunoco refinery, which was slated for closure in 2012 because of high crude oil prices from overseas.

Lifting the ban and putting U.S. crude oil on the world market would increase demand and raise prices for U.S. refiners. Higher crude oil prices usually result in higher prices at the gas pump for consumers.

“Severe job loss could also result from lifting the export controls,” said USW International Vice President Gary Beevers, who heads the union’s oil sector. “Rising crude oil prices adversely impact a refiner’s ability to operate and unprofitable refineries are shut down.”

While crude oil expenses for U.S. refiners would rise if the crude oil export ban is rescinded, it would decrease costs for refiners in other countries as the pool of crude oil in the world increases, dropping prices. This negatively impacts U.S. jobs, as domestic refiners are forced to compete with refiners outside the U.S. that have lower labor costs and fewer safety and environmental controls.

Refinery job loss impacts an entire community. Studies have shown that up to 10 secondary jobs are lost for each direct job at the refinery.

The U.S. is not self-sufficient in crude oil. Thus, for every barrel of crude that is exported, a barrel has to be imported. This negatively impacts our country’s national security as we are forced to import oil from countries that are unstable and/or hostile to U.S. interests.

Eliminating the crude oil ban would likely increase advanced oil recovery methods like hydraulic fracturing as producers would try to deliver all the oil they can to sell on the world market. It would not reduce the environmental impact on communities of fracturing. Improved health and safety regulation is needed to protect workers and communities impacted by hydraulic fracturing.

“The reasons for not ending the crude oil export ban are obvious,” Beevers said. “Congress and the administration should not even be considering incremental legislation that would lift the ban in stages.”

The USW is the largest industrial union in North America with 850,000 members in the U.S., Canada and the Caribbean. The union represents workers employed in energy, paper and forestry, metals, rubber, chemicals, glass, health care and the service sector.

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