WASHINGTON — The United Steelworkers on Monday declared its opposition to exporting American crude, siding with refiners who say it would hike oil prices and pare their margins.
The labor union said easing the 39-year-old ban would help narrow the gap between U.S. and international crude prices, effectively boosting the price that refiners pay for the oil they process. And while that would be good news for oil companies that want to command higher prices for the crude they are extracting, it would come at the expense of refiners now freely able to sell gasoline, diesel and other petroleum products overseas.
“Lifting the ban would benefit oil companies that engage in oil exploration, but it would harm their refining operations that have to purchase crude at the market price,” said Leo Gerard, the president of United Steelworkers International. “It also would hurt independent refiners that do not engage in oil exploration.
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Although the main refining trade group — the American Fuel and Petrochemical Manufacturers — says it supports free trade, a handful of refiners have been pushing back against proposals to ease the crude export ban. The critics include New Jersey-based PBF Energy and Delta Air Lines’ Monroe Energy.
The steelworkers are concerned about job losses at U.S. refineries, and the prospect that some of those jobs might migrate overseas. In a release Monday, the 850,000-member union cited studies documenting that as many as 10 secondary jobs can be lost for each direct refinery job that goes away.
Steelworkers International Vice President Gary Beevers predicted that “severe job loss” could result from lifting the trade restrictions.
“Rising crude oil prices adversely impact a refiner’s ability to operate, and unprofitable refineries are shut down,” Beevers said in a statement.
Cost concerns have emerged as a major factor in the debate over ending the oil export ban. But experts and analysts differ over how a big policy shift would affect pricing of domestic crude compared to the international benchmark, refiners’ margins and the price of gasoline.
A number of groups are now studying the issue, including the government’s Energy Information Administration, Stanford University, Rice University, the Brookings Institution and the Center for Strategic and International Studies.
Sen. Lisa Murkowski, R-Alaska, said 2014 would be the “year of the report” on the issue, as lawmakers, analysts and government officials struggle to wrap their mind around the topic.