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PROPOSED BTU TAX WILL WORSEN TRADE DEFICIT BY $4.1 BILLION ACCORDING TO WRIGHT KILLEN STUDY; ELIMINATING 41,000 JOBS

 HOUSTON, May 3 /PRNewswire/ -- Concurrent with the House's imminent mark-up and walk-through of Clinton's proposed Btu tax program provisions commencing this week, Wright Killen & Co. (management consultants to the refining industry) is releasing the conclusions of its just-completed study addressing Btu tax effects on the United States refining industry.
 "Our study suggests the Btu tax, in its present form, would put an additional seven percent of the nation's refining capacity at risk of closure by 1996," commented Dr. Calvin B. Cobb, Wright Killen president. "These closures would add 26 refineries to the original list of 37 Wright Killen identified to be at risk in our January 1992 refinery survivability analysis. Closure of these 63 refineries represents the elimination of nearly one-third of the total number of United States refineries and 17 percent of total United States refining capacity," said Cobb.
 "Such extensive rationalization," continued Cobb "will have profoundly far-reaching effects on the industry. Not only does Wright Killen project an expansion of the annual trade deficit by an additional $4.1 billion, but we expect that over 9,000 high-paying refining jobs will be lost while an additional 32,000 related jobs will be eliminated as well." Another negative implication of the tax involves further compromising of the global environment when 1.1 million barrels per day of foreign product replaces refined products produced by more environmentally efficient United States refineries.
 The original 37 refineries identified by Wright Killen were put at risk of closure by requirements of the Clean Air Act Amendments and other environmental health and safety regulations, while the mature nature of the refining industry further exacerbated the firm's outlook.
 Wright Killen's current study further shows that refiners will not be able to recover completely the Btu taxes on refined products and will be placed at a competitive disadvantage to natural gas and coal. These unrecovered taxes will cause a drop in refining profit margins of 20 to 30 percent on average. In addition, the industry's lower margins will make it more difficult to raise the large amounts of capital needed for environmental investments, and companies forced to close may be unable to fund remediation or clean-up efforts.
 Wright Killen & Co. (Houston), provides a variety of management consulting services to the process industries in areas such as strategic business analysis and planning, financial analysis, quality management and productivity, and information technology.
 -0- 5/3/93
 /NOTE TO EDITORS: A one-page executive summary of the report, accompanied by two report maps showing projected refinery closures and a graphic depicting the net oil import effects of the Btu tax are available upon request./
 /CONTACT: Joyce Berger of Wright Killen & Co., 713-267-5290/


CO: Wright Killen & Co. ST: Texas IN: OIL SU:

KD-WB -- NY099 -- 4002 05/03/93 17:12 EDT
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Publication:PR Newswire
Date:May 3, 1993
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