Union strike under way at US refineries, petchem plants

The United Steelworkers Union (USW) has instituted a strike at nine US refining and petrochemical production plants following a breakdown in negotiations with oil companies over collective bargaining agreements due to expire on Jan. 31.

On Feb. 1, USW called its members to stop work as of 12:01 a.m. local time on Feb. 2 at the following US refineries and related production sites:

• LyondellBasell’s 268,000-b/d Houston refinery.

• Marathon Petroleum Corp.’s 451,000-b/d Galveston Bay, Tex., refinery and associated South Houston Green Power cogeneration plant, as well as its 242,000-b/d Catlettsburg, Ky., refinery.

• Royal Dutch Shell PLC’s 340,000-b/d Deer Park, Tex., refinery and subsidiary Shell Chemical LP’s Deer Park petrochemicals plant.

• Tesoro Corp.’s 120,000-b/d Anacortes, Wash., refinery, 166,000-b/d Martinez, Calif., refinery, and the Carson portion of its 363,000-b/d Los Angeles refinery.

The decision to strike, which came without the traditionally observed 24-hr notice period, follows ongoing disagreements between USW and the oil companies that involve more than simply wages, according to USW’s Feb. 1 statement announcing the strike.

“This work stoppage is about onerous overtime; unsafe staffing levels; dangerous conditions the industry continues to ignore; the daily occurrences of fires, emissions, leaks, and explosions that threaten local communities without the industry doing much about it; the industry’s refusal to make opportunities for workers in the trade crafts; the flagrant contracting out that impacts health and safety on the job; and the erosion of our workplace, where qualified and experienced union workers are replaced by contractors when they leave or retire,” said Gary Beevers, USW International’s vice-president and head of the union’s National Oil Bargaining Program.

It was USW’s rejection of the fifth and final offer by Shell, the lead company for NOB negotiations, which directly precipitated the strike.

According to Leo W. Gerard, USW International president, Shell refused to provide a counteroffer and left the bargaining table, leaving the labor organization no choice but to give notice of a work stoppage.

“We told Shell that we were willing to continue bargaining for a fair agreement that would benefit the workers and the industry, but they just refused to return to the table,” said Beevers.

The remaining 56 USW-represented refineries and oil facilities continue to operate under a rolling 24-hr contract extension, according to the union, which reiterated its willingness to resume discussions with oil companies to negotiate a fair agreement for all parties involved.

Operator responses

While Shell has not issued an official company-wide statement regarding the labor dispute, Barry Klein, general manager of Shell’s Deer Park site, attributed the strike to ongoing negotiations at the national rather than local level prior to contract expiration.

“To be frank, we did not expect the USW to give strike notice to our site, as we successfully reached a tentative agreement in our local negotiations in July, in record time, with extreme cooperation,” Klein said in a message to Deer Park employees posted on Shell’s web site.

Deer Park did prepare for the possibility of a strike, however, which included the activation of its strike contingency plan in order to continue safe and reliable operations as part of normal business, according to Klein.

Tesoro also plans to maintain safe production at two of its three refineries impacted by the strike.

Despite USW’s decision to violate a longstanding practice of providing a 24-hr minimum strike notice, Tesoro safely completed transition of operations at both the Carson and Anacortes plants, the US independent refiner said Feb. 2.

The USW strike, however, will extend planned maintenance activities that have been under way for about a month at Tesoro’s Martinez refinery.

As a measure to ensure the safest operating conditions for workers at the refinery, all processing units at Martinez not originally included in the scheduled maintenance plan also will be idled, Tesoro said.

While the impact to production levels remains uncertain, the company said it will use its integrated US West Coast system to continue meeting the ongoing needs of its customers.

Contact Robert Brelsford at [email protected].