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For local companies, U.S. spending bill a mixed bag

WASHINGTON - Refineries and lawmakers in the Philadelphia area are cringing over one of the marquee provisions in the massive spending bill expected to pass Congress on Friday.

WASHINGTON - Refineries and lawmakers in the Philadelphia area are cringing over one of the marquee provisions in the massive spending bill expected to pass Congress on Friday.

The $1.1 trillion appropriations plan includes a provision to lift a 40-year-old ban on exports of crude oil, an idea championed by Republicans but opposed by local refiners that employ thousands and worry that the change will raise costs, cut profits, and toughen competition with foreign refineries.

"The primary concern that I have is with the welfare of my workers," said Rep. Patrick Meehan, a vocal advocate for local refineries. "It'll make it much more difficult for our refineries to compete."

But while the proposal irks lawmakers whose districts are tied to the refineries, local congressmen such as Philadelphia Democrats Robert Brady and Chaka Fattah are likely to support the overall bill - and Meehan did not commit to opposing it.

That's because the provision is just one of dozens of riders tacked onto the 2,009-page measure to fund the government for the next year.

The grab bag of proposals offers plenty to anger or please members of both parties - and ample political cover to justify a yea or nay.

One provision hailed by Fattah and Brady calls for $50 million to fund security at the Democratic National Convention in Philadelphia next year. Sen. Robert P. Casey (D., Pa.) praised a $25 million allocation to help railroads install Positive Train Control, the safety system that could have averted the Amtrak crash in Philadelphia in May.

There's a two-year delay of the "Cadillac tax" on expensive health-insurance plans and a two-year suspension of the Affordable Care Act's tax on medical device makers, a levy fiercely opposed by Republicans, including Sen. Pat Toomey (R., Pa.), and Democrats from states with large medical industries, such as Pennsylvania and New Jersey.

Sens. Robert Menendez and Cory Booker, both New Jersey Democrats, praised tax credits to help the poor and those with mortgage debt. Another rider includes wording inserted by Rep. Tom MacArthur (R., N.J.) to protect South Jersey's joint McGuire-Dix-Lakehurst military base.

Lawmakers were careful to highlight the provisions that could justify their stands ahead of critical Friday votes.

On the crude-oil exports, Fattah said he would have opposed the measure if it were a stand-alone bill.

"It's a bad idea," he said. "However, as part of the overall negotiations on the appropriations for the year, there's a thousand other things in the bill."

In exchange for lifting the oil export ban, Democrats won an extension of tax credits for wind and solar energy.

Party leaders hailed the bill as a true example of bipartisan give-and-take. Others were less charitable.

Lawmakers can't vote for the good ideas, said Sen. Mike Lee (R., Utah), "without also voting for each and every dysfunctional, irresponsible, and unsustainable policy."

The push to end the export ban was one of the final and most contentious sticking points.

Oil producers and Republicans argued that allowing crude exports will create benefits that will ripple through the economy. "This is a big win for American jobs and for our energy industry," House Speaker Paul Ryan (R., Wis.) said.

Meehan looked to refineries in Philadelphia and Trainer and saw a major downside.

There are about 3,000 jobs, including contractors, directly tied to local Philadelphia Energy Solutions' refineries and Monroe Energy's refinery in Trainer, according to Meehan's office.

Roughly 1,000 more work at PBF Energy refineries in Paulsboro and in Delaware City, Del., and about 100 work at Axeon Speciality Products, an asphalt refinery in Paulsboro.

And that doesn't count local businesses tied to those facilities.

With an expanded market for oil, crude prices are expected to rise, helping oil producers counter the sharp drop sparked by the shale boom. That means higher costs for refiners who turn the crude into gasoline, jet fuel, and diesel - particularly for refiners in the Philadelphia area who can handle the type of oil that comes from shale.

By 2025, refiners' profits will be $22.7 billion less than if the export ban remains in place, according to a September report by the U.S. Energy Information Administration.

(For consumers, however, several studies have predicted a small drop in gasoline prices, which are linked to the international oil market, not the domestic market.)

Meehan said he had "deep reservations" about the export change, but would look "at the totality" of the bill.

A coalition of refiners, including those from the Philadelphia area, said Thursday it was "extremely disappointed" with the legislation, and questioned the wisdom of allowing exports when the United States still imports seven million barrels of oil per day.

But Brady, a close ally of the refiners, said he did not expect layoffs.

He noted that the bill includes language allowing the president to stop exports in case of economic harm.

"They don't like it, but they're not going ballistic," Brady said. He said he was "leaning" toward backing the bill. "I don't think [the refiners] want to put me in a position to vote to shut down the government," he said. @JonathanTamari