Santorum attack on refinery workers rings hollow with jobs at risk

He also maintained that independent refiners should simply invest in biofuel blending equipment to avoid the RFS’s high compliance costs that are threatening refiners’ sustainability.

For readers not familiar with the RFS, it is a federal program that requires the production of increasing levels of biofuels, reducing the U.S. quantity of petroleum-based fuels. The RFS mandates that refineries meet annual biofuel blending requirements. Compliance is demonstrated either by a refinery investing in the equipment and technology necessary to blend biofuels into gasoline and diesel fuel, or by purchasing credits called Renewable Identification Numbers in sufficient amounts to satisfy federal mandates.

For each gallon of biofuel produced, one RIN is created. RIN prices are unregulated, creating opportunities for large multinational fuel companies and Wall Street speculators to profit. This comes very much at the expense of independent U.S. refiners, for whom capital investments in fuel blending equipment and technology represent a fundamental change to their business structure that are simply not financially feasible.

One such refiner is Philadelphia Energy Solutions. PES processes approximately 335,000 barrels of oil daily and employs 1,100 people. The RFS now requires PES and other refiners to spend more money to acquire RIN credits than they do to pay their employees. Last year, PES spent almost $220 million to purchase RIN credits, a cost second only to its crude oil expense, and nearly double its annual payroll costs. As a result of skyrocketing compliance costs, in 2016, PES announced benefit cuts and layoffs. Finally, earlier this year, with RFS compliance costs continuing to spin out of control, PES filed for bankruptcy.

Without changes to the RFS to control RIN credit costs, other refiners will surely follow in PES’ footsteps. Independent refiners across the country provide more than half of America’s refined fuels, including gasoline, diesel, home heating oil and jet fuel. They also provide well-paying, family-sustaining jobs to thousands of workers in communities where the petroleum industry is a primary employer. The impact of closing or ramping down operations in these communities due to RFS compliance costs will be disastrous not only to those communities but also to the U.S. economy.

Despite clear evidence of the need for changes to the RFS, Santorum, who now works for a pro-biofuel lobbying group, dismisses the concerns of independent refiners like PES for whom RFS compliance threatens their very existence. Modest changes would continue to encourage the widespread use of biofuels without imposing hardship on refiners or jeopardizing the continued employment of refinery workers, Building Trades members and the tens of thousands of others that depend on facilities like PES for their livelihoods.

While others in Washington have shown an interest in developing solutions to reduce the unintended compliance burden of the RFS while maintaining its underlying policy goals, Santorum and Washington’s entrenched ethanol lobby have opposed any and all changes, fearing a loss of the windfall profits realized through inflated RIN credit prices.

As PES falls into bankruptcy, Pennsylvania’s refinery workers must be wondering what became of Sen. Santorum’s passion for the Keystone State. With a foothold in the refining community he once represented and the biofuels industry he now champions, Santorum could be a constructive voice in the RFS debate. However, I fear that he has become another statistic of the Washington swamp, having forgotten the hardworking Pennsylvanians who elected him into office for nearly two decades. Pennsylvania’s refinery workers hope that’s not the case.

Bob Godshall, a Republican, represents the citizens of Montgomery County’s 53rd Legislative District in the Pennsylvania House of Representatives.

If you would like to write an op-ed for the Washington Examiner, please read our guidelines on submissions here.