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UPDATE 2-Union refinery workers prepare for Sunday strike as talks continue
January 31, 2015 / 7:43 PM / in 3 years

UPDATE 2-Union refinery workers prepare for Sunday strike as talks continue

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By Erwin Seba

HOUSTON, Jan 31 (Reuters) - Union refinery workers were preparing to walk off their jobs as early as Sunday while talks were continuing on Saturday afternoon between labor and oil company negotiators in the waning hours of the current national pact.

The United Steel workers union (USW) issued notices of a possible strike to several U.S. refineries, which could begin after the current national contract expires at 12:01 a.m. on Sunday, said sources familiar with the notices.

The sources did not know which specific refineries received the notices.

The Exxon Mobil Corp refinery in Beaumont, Texas, received a strike notice on Friday night, according to the company. The Beaumont plant was the only Exxon refinery to receive a notice.

Royal Dutch Shell Plc and Motiva Enterprises refineries have not received strike notices, a spokesman said on Saturday.

Those USW members off from work on Saturday carried out rallies outside negotiation sites and refineries across the United States.

Workers were pessimistic an agreement would be reached before the national agreement expires.

“I think the chance of an agreement Saturday night is as good as a snowball in hell,” said one worker, who asked not to be identified by name.

A Shell spokesman said talks were still underway.

“Negotiations continue with USW with the intent of reaching a mutually satisfactory agreement prior to contract expiration,” said Shell’s Ray Fisher.

The current contract covers about 30,000 workers at 63 U.S. refineries accounting for about two-thirds of national refining capacity. Not all of those locations could be subject to a strike on Sunday. Only a certain number of plants have contracts that expire on Sunday.

USW International Vice President Gary Beeves, who is negotiating on behalf of the union, will decide at which refineries strikes will take place after the contract expires, the sources said.

A USW spokeswoman declined to discuss the situation.

A strike notice is legal notification of a possible strike by a labor union at that location. It does not mean that a strike will take place at that location.

The drop in oil prices since this summer may have cut the union’s ability to win its objectives, said an oil industry analyst.

“I think the union would have had a lot more leverage six months ago when the price (of oil) was $100 a barrel,” said Andrew Lipoid, president of Lipoid Oil Associates in Houston. “But now, when the industry is facing hard times and layoffs have been announced, their bargaining power is limited.”

West Texas Intermediate crude delivered at the Cushing, Oklahoma, oil hub finished on Friday at $47.76 a barrel.

Oil prices rose more than 8 percent on Friday due to an attack by Islamic State militants toward the Iraqi oil production center of Kirk.

Lipoid doesn’t expect oil or gasoline prices will go up due to a strike.

“Attacks on Kirk will drive up prices, but a strike by the USW will not,” he said.

The USW is seeking annual pay raises double those of the last agreement. It also wants work that has been given in the past to non-union contractors to start going to USW members, a tighter policy to prevent workplace fatigue, and reductions in members’ out-of-pocket payments for healthcare.

The starting pay for USW member in an oil refinery is about $37.50 an hour.

At least three contract offers have been rejected by USW negotiators since contract talks began on Jan. 21. The most recent rejection was on Friday.

A strike is not expected to affect operations at refineries where workers walk off their jobs, said a refining consultant.

“I am not aware of any examples when refineries have not continued operating with replacement workers rather than union workers,” said David Hackett, president of Stillwater Associates, an Irvine, California, refining consultancy.

Oil companies have been training temporary replacement workers since this summer.

The last national refinery workers strike was in 1980 and lasted for three months. (Reporting by Erwin Seba; Editing by Alison Williams, Bernard Orr)

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