You are here

US oil-worker union widens biggest plant strike since 1980

usoilwrerks2302.jpg
An agreement would end a strike at US plants that account for almost 20 per cent of the country's refining capacity.

[SAN FRANCISCO] The United Steelworkers, which represents 30,000 US oil workers, called on four more plants to join the biggest strike since 1980 as talks dragged on with Royal Dutch Shell Plc, negotiating a labour contract for oil companies.

The USW, with members at more than 200 refineries, fuel terminals, pipelines and chemical plants across the US, asked workers at Motiva Enterprises LLC's Port Arthur refinery in Texas, the nation's largest, to join a nationwide walkout on Saturday, and issued notices for three other plants to go on strike in 24 hours.

This brings the work stoppage - which began on Feb 1 at nine sites from California to Texas and expanded to two BP Plc refineries in the Midwest a week later - to 12 refineries and 3 other facilities. The union has rejected seven contract offers from Shell, which is representing companies including Exxon Mobil Corp. and Chevron Corp.

An agreement would end a strike at US plants that account for almost 20 per cent of the country's refining capacity. It's the first national walkout of US oil workers since 1980, when a work stoppage lasted three months. The USW represents workers at plants that together account for 64 per cent of U.S. fuel output.

"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 USW International President Leo Gerard in a statement late on Friday.

Ray Fisher, a spokesman for The Hague, Netherlands-based Shell, said on Saturday in an e-mail that Shell was "extremely disappointed" that the USW issued additional strike notices. It sets the "wrong tone" for both parties to move forward, he said.

The USW has been asking for tougher measures to prevent fatigue and to keep union workers rather than contract employees on the job, statements posted on the group's website show. The union said on Thursday that Shell's seventh offer failed to address safety concerns "in any sort of meaningful or enforceable way."

As the oil workers strike expanded, West Coast dockworkers and their employers ended their nine-month standoff with a five-year contract deal, averting a shutdown of 29 ports that could have cost the economy US$2 billion a day.

The USW previously called strikes at: Tesoro Corp's plants in Martinez and Carson, California, and Anacortes, Washington; Marathon Petroleum Corp's Catlettsburg complex in Kentucky and Galveston Bay site in Texas; Shell's Deer Park complex; LyondellBasell Industries NV's Houston facility; and BP Plc's Whiting and Toledo refineries in the Midwest.

In addition to Port Arthur, Motiva's refineries in Convent and Norco, Louisiana, and Shell's chemical facility in Norco received 24-hour notices. Motiva is a joint venture between Shell and Saudi Arabian Oil Co.

The Port Arthur plant was running at about 50 per cent of capacity, according to Troy Barbay, the USW workmen's committee chairman and Hoot Landry, the USW staff representative at the site. The facility's largest crude unit was running at reduced rates, Mr Barbay said.

More than 5,200 workers have walked out, USW statements show. United Steelworkers members operate refinery units, perform maintenance and work in labs at the plants.

The USW and Shell began negotiations on Jan 21 amid the biggest collapse in oil prices since 2008, driven largely by surging output from US shale formations that cut oil prices by 49 per cent in the second half of 2014.

Refiners in the Standard & Poor's 500 have tripled in value since the beginning of 2012, when the steelworkers last negotiated an agreement. Marathon and Tesoro went on that year to take their place among the 10 best performers in the S&P 500 Index.

The national agreement, which addresses wages, benefits and health and safety, serves as the pattern that companies use to negotiate local contracts. Individual USW units may still decide to strike if the terms they're offered locally don't mirror those in the national agreement.

BLOOMBERG