United to Fix the Broken RFS: A Matter of Our National Security, Economic Prosperity, and Energy Independence
On a special edition of “The Labor Show” with J Doc and Krausey on 1210 WPHT, Philadelphia, Congressman Donald Norcross (D-NJ-1) joined refining industry workers and other industry representatives for a conversation about America’s growing energy crisis.
The conversation focused on the skyrocketing costs of compliance for the federal Renewable Fuel Standard (RFS), and how this broken federal regulation is putting thousands of good-paying, independent refinery and supply chain jobs at risk, while increasing the cost of gasoline at the pump.
Joining the Congressman was PBF Energy’s Herman Seedorf, Brendan Williams, Mike Capone, and Mike Karlovich; as well as Monroe Energy’s Adam Gattuso, Boilermakers Local 13 Business Manager John Bland, and UA Local 74 Plumbers & Pipefitters Vice President Mike Hackendorn.
Taped live at PBF Energy’s Delaware City Refinery, the discussion highlighted the crippling economic effect that soaring Renewable Identification Numbers (RINs) credit prices continue to have on merchant refiners throughout the tri-state area and what this means for motorists when they pay at the pump.
“To emphasize the impact that [this issue] has on both the refinery and consumers, at PBF Energy, we’re spending more on RINs than to run six refineries — more than on all other operating costs combined,” said PBF’s Brendan Williams. “RINs are raising fuel costs, putting jobs and fuel supplies at risk.”
Herman Seedorf pointed to the vital role the tri-state area’s independent refineries play in safeguarding the nation’s energy security, citing last summer’s temporary shutdown of the Colonial Pipeline, and the massive repercussions that could have unfolded if the remaining merchant refiners throughout the Northeast had been shut down.
“About 40 percent of all the gasoline diesel fuel being consumed in the Northeast is coming from Texas and Louisiana in very large pipelines,” Seedorf explained. “One of the pipelines is called the Colonial Pipeline. It was interrupted. I can assure you, if we didn’t have some refineries in the Northeast, there would have been gas lines in the Northeast — in Maryland, in Delaware, in New Jersey just like there was in the Southeast portion of the country.”
John Bland, Business Manager of Boilermakers Local 13, also spoke to broader security implications that will come into play if the Biden Administration and Congress fail to get the costs of RFS compliance under control — and fast.
“This is a matter of national security. If this program doesn’t get fixed, it’s going to put more refineries out of business. And that’s not going to be ‘if’, it’s ‘when,’ if this doesn’t change.”
In fact, when the PES Refinery in Philadelphia first declared bankruptcy, they cited runaway RIN costs as the contributing factor.
Congressman Norcross — who recently successfully introduced an amendment to the National Defense Authorization Act that calls on the Department of Defense to conduct a study of the importance of the U.S. refining industry to our national security — also weighed in on the impacts of the broken RINs system, describing how what was first designed as a regulatory accounting system has become a commodity that results in winners and losers.
The winners? Large integrated oil companies. Wall Street speculators. The losers? Independent merchant refiners, the thousands of men and women they employ, and consumers who rely on refined products at the pump.
“If the refinery can’t sustain the balance… everybody loses, including the public,” Congressman Norcross explained.
Congressman Norcross, who has worked in virtually every refinery and chemical plant along the Delaware River as an electrician with the International Brotherhood of Electrical Workers — IBEW, then went on to explain what’s being done in Washington to repair this broken compliance system.
“The Administration in Washington talks about giving the middle class a shot. What better example that the middle class is getting the shaft than these RINs?” The Congressman went on to reveal that he along with his colleagues in the New Jersey Congressional delegation have sent a new letter to EPA Administrator Michael Regan, urging the EPA to fix the broken RINs compliance scheme.
“We’re asking EPA to take the excess profit and motive out of the commodity and turn it back to how it was designed — as an accounting system.”
Mike Hackendorn, Vice President of UA Local 74 Plumbers & Pipefitters, went on to underscore the catastrophic impact that independent refinery closures would have on supply chain trades and jobs throughout the tri-state area.
“This refinery has been the backbone of the Delaware Building Trades, and my local union for over 70 years. These are good-paying jobs, good union jobs, with benefits where you can sustain and raise a family, and possibly send your kids to college.”
Adam Gattuso from Pennsylvania-based Monroe Energy, further elaborated on these concerns, citing the economic damage to the region he bore witness to following the closure of three refineries in southeastern Pennsylvania back in 2011.
“I saw first-hand what the devastation was when three refineries announced closure all at the same time. I’m afraid if something doesn’t get done to fix the problem, that nightmare could repeat itself. And it’s extremely scary about what it will do to not only our workforce, but to the local communities and people at large.”
Gattuso then pointed to the important multiplier effect of Pennsylvania’s independent refining sector and its ripple effect on statewide and nationwide supply chain job growth.
“At that time, the Pennsylvania Department of Labor conducted a study and what they found was, for every lost refinery job, 18.1 jobs in the community, 22 in the state, and 61 across the nation would actually lose their job. So, it’s obviously about the direct workers that work at these plants and our friends at the building trades, but it goes well beyond the fence line…
“We have about 500 direct employees and when you use that multiplier effect you quickly see how our one refinery really affects over 9,000 jobs right in the region. These are family-sustaining jobs that everybody wants to have a shot at in their lifetime, and it’s a way of life for multiple generations. I know at our plant alone that we have second, third, and fourth generation workers.”
After listening to the many voices profiled throughout this two-hour special segment, one key point becomes abundantly clear — the RFS as it exists today undermines the basis for Congress’ original intent, as the program is unsustainable, unpredictable, and counter-productive.
President Biden, the EPA, and Congress must work together to fix the broken RFS once and for all, for the sake of our nation’s energy independence and the tens of thousands of good-paying, family-sustaining, middle class jobs the tri-state region’s independent refineries support.
Our nation’s energy independence and security depend on these workers and refineries, without them we will become even more dependent on overseas suppliers, which would put our nation at risk.