USW Opposes Export of US Crude Oil

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While crude oil expenses for U.S. refiners would rise if the crude oil export ban is rescinded, it would decrease costs for refiners in other countries as the pool of crude oil in the world increases, dropping prices.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.


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