Work stoppages commence at largest US refinery, three other facilities

Story updated Feb. 23 to include Shell's response to USW claims.

The United Steelworkers union (USW) has launched additional work stoppages at the largest refinery in the US and three other facilities as part of USW’s unfair labor practice (ULP) strike.

Twenty-four-hour strike notices were delivered over the weekend at the 600,000-b/d Motiva Enterprises refinery in Port Arthur, Tex.; as well as the company’s 235,000-b/d Convent and 238,000-b/d Norco refineries in Louisiana; and the Shell Chemical plant in Norco.

Some 1,350 USW members are employed at the three refineries and chemical plant, which have a combined capacity of 1,073,260 b/d.

The Port Arthur refinery is a 50-50 joint venture of Royal Dutch Shell PLC subsidiary Shell Oil Co. and Saudi Aramco subsidiary Saudi Refining Inc. Both companies also operate the Convent and Norco refineries.

“The industry’s refusal to meaningfully address safety issues through good faith bargaining gave us no other option but to expand our work stoppage,” said Leo W. Gerard, USW international president.

Tom Conway, USW vice-president, also commented, “We’re committed to reaching a settlement that works for both parties, but adequate staffing levels, worker fatigue, and other important safety issues must be addressed.”

Although the Port Arthur refinery is expected to continue to operate under a contingency plan, analysts at Raymond James & Associates note the strike could help Gulf Coast crack spreads on the higher risk premium, particularly due to Motiva’s size.

Shell, meanwhile, said on Feb. 21 that since negotiations began with USW a month ago, the company has put seven offers on the table, all of which have been rejected.

"The central issue of the USW’s national leaders is their continued demand that Shell replace routine maintenance contractors with USW-represented employees," the company said via an internal employee communication.

Shell explained, "Our established practice of utilizing contractors supports the need for flexibility in hiring to accommodate economic cycles and maintenance schedules. And we’re open to a variety of ways to maintain a strong roster of skilled craftsmen available to each of our locations.

"But hiring flexibility is a proven way to protect our core Shell workforce and the long-term economic viability of our business," it said. "It is the most effective way to keep our sites running safely, efficiently, and reliably. This strategy has served us well as we have not had to conduct any layoff in decades."

The work stoppage began at midnight on Feb 1. Previously, 11 facilities and 5,200 workers went out on the ULP strike (OGJ Online, Feb. 9, 2015).