February 2, 2015 / 2:02 AM / 5 years ago

UPDATE 6-Workers strike for new pact at 9 U.S. oil, chemical plants

(Adds details on Tesoro operations, oil prices slip in Asia)

By Erwin Seba

HOUSTON, Feb 1 (Reuters) - Union workers took to picket lines on Sunday after strikes were called at nine U.S. refineries and chemical plants in a bid to pressure oil companies to agree to a new national contract covering workers at 63 plants.

The walkouts, the first held in support of a nationwide pact since 1980, target plants that together account for about 10 percent of U.S. refining capacity. The discord comes as plunging crude prices force oil companies to slash spending.

The United Steelworkers union (USW) said Royal Dutch Shell Plc, the lead industry negotiator, halted talks after the union rejected a fifth proposal from the company.

“Shell refused to provide us with a counter-offer and left the bargaining table,” USW International President Leo Gerard said. “We had no choice but to give notice of a work stoppage.”

Shell said it would like to restart talks.

“We remain committed to resolving our differences with USW at the negotiating table and hope to resume negotiations as early as possible,” Shell said.

Shell activated a strike contingency plan at its sprawling joint venture refinery and chemical plant in Deer Park, Texas, to keep operating normally.

Other companies have said they were calling on trained managers to use as replacement workers, so the strikes are not expected to cause gasoline prices to spike.

Tesoro Corp said management was operating its refinery in Carson, California, and that managers would take over from union workers at its plant in Anacortes, Washington, in the next 24-48 hours. It said its Martinez, California, refinery, which was undergoing maintenance work, would be shut down.

Besides Shell and Tesoro, the USW said strikes were called at three plants belonging to Marathon Petroleum in Texas and Kentucky, and LyondellBasell’s plant near Houston. At least two of the plants on the list have a history of deadly accidents.

“The strike is going well,” said a union member picketing Lyondell’s plant who declined to speak on the record. “I am not concerned it will backfire.”

The USW said all other refineries it represents - including Exxon Mobil Corp’s refinery in Beaumont, Texas - would operate under rolling 24-hour contract extensions.

The expiring three-year national contract covers about 30,000 hourly workers at plants that together have two-thirds of U.S. refining capacity.

The latest rejected proposal was the fifth turned down since negotiations for a new three-year agreement began on Jan. 21.

The USW is seeking annual pay raises double the size of those in 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.


Independent refiners, such as Valero Energy Corp, have made big profits recently by tapping cheap crudes from the U.S. shale revolution, while refining units at integrated companies such as Exxon have provided a cushion against low prices hurting upstream operations.

But the steep drop in oil prices since June, when they were above $100 per barrel, has hurt the union’s negotiating power, analysts said.

Oil prices fell early on Monday in Asia, with traders citing the strikes, which could potentially dent demand, and strong price gains last week, when the market soared more than 8 percent.

Brent crude oil futures were trading at $51.63 a barrel at 0130 GMT, down $1.36, while U.S. West Texas Intermediate futures had dropped $1.37 to $46.87 a barrel. (Writing by Terry Wade; Editing by Dominic Evans, Sandra Maler and Andre Grenon)

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