Ohio Lawmakers Are Considering a Cost-Increasing Regulation Designed to Benefit Powerful Union

It’s not exactly breaking news that costs – and especially energy costs – are high these days. The Buckeye State is no exception to this trend. Average cost per gallon for regular unleaded gas in Ohio, at the time of writing, is $3.96. That’s up a whopping 42 per cent from this time last year. So why is the Ohio House Commerce and Labor Committee considering a bill that would increase gas prices by making it more expensive to operate Ohio’s four oil refineries?

The short answer is because a powerful union asked for it. Affiliated Construction Trades (ACT) Ohio has been angling to push Ohio’s four oil refineries into hiring unionized contractors and subcontractors for construction and maintenance projects at these facilities by forcing onerous new government licensing standards. And with this year’s House Bill 235, they’ve gotten some traction, with four committee hearings having been held so far on the bill.

It’s hard to imagine what justification ACT Ohio could have for trying to use government occupational regulation to force the hands of independent workers and private business owners – at the expense of already struggling consumers. But, as is often the case with these types of industry fights, the bill is being advanced in the so-called interest of public safety.

Listening to testimony from ACT Ohio in committee hearings, you’d think that the contractors and subcontractors being hired by these refineries are completely incompetent, running amok, with no experience and no concern for their own safety or that of refinery staff. The union representative worries that the refinery management doesn’t know how to hire qualified contractors to maintain capital assets which are profoundly important to the operation of these facilities. Which is why, they say, Ohio needs HB 235 to require an oddly precise mixture of training, certification, and experience that can be readily obtained via union members – surely by complete coincidence.

While ACT Ohio argues that these absurdly specific hiring requirements do not require the contractors to be union members, it doesn’t take a cynic to understand that these requirements shrink the candidate pool to predominately union members and make those union-affiliated candidates more cost-competitive by using regulation to put a thumb on the compensation scales for these jobs. Of course, ACT Ohio isn’t at all worried that these increased operational costs will have to be borne by Ohioans and energy consumers nationwide.

So, is it true that without union dominated hiring these four refineries are continually putting their facilities and workers in danger? Given the importance of these facilities to the companies that own and operate them, there is a strong incentive for refinery management to ensure the contractors and subcontractors they work with are well-versed in safety practices for these particular types of projects. And in fact, it does seem to be the case that the refineries do an excellent job of ensuring the quality of construction at their own facilities, while maintaining a safe working environment and proper containment of hazardous materials. In a letter to the Speaker of the House, Ohio’s industry leaders report that there has not been a fatality at any Ohio refinery in over 25 years – while nonfatal workplace injury and illness incidence rates at petroleum refineries are some of the lowest in the country. Not to mention the fact that safety is already regulated at petroleum refineries by a robust combination of local, state, and federal regulations.

This bill is a classic example of a solution in search of a problem. The reason is simple: it’s because the actual “problem” with refineries’ current hiring practices is that ACT Ohio isn’t getting a cut. While that may be a problem for ACT Ohio, it’s not a problem that the Ohio Legislature needs to solve, especially when it would come at the expense of current Ohio refinery workers, everyday Ohioans, and energy consumers across the country.