Shell, Oil Union Talks Said on Hold for Week as Strike Drags on

by Lynn DoanBarbara Powell   9:21 AM PST    Bloomberg Business

(Bloomberg) — The largest U.S. refinery strike since 1980 was set to drag on for at least another week as contract talks stalled between the union representing 30,000 oil workers and Royal Dutch Shell Plc, bargaining on behalf of companies.

Negotiations between the United Steelworkers and Shell, representing companies including Chevron Corp. and Exxon Mobil Corp., were suspended until Feb. 18 after a meeting that ran past 6 p.m. New York time on Tuesday failed to produce an agreement, said two people familiar with the negotiations, asking not to be identified because the information isn’t public. Shell spokesman Ray Fisher said on Wednesday that he wasn’t sure when the company was meeting with USW leaders next.

A recess in negotiations threatens to prolong a strike at nine U.S. refineries accounting for about 13 percent of the country’s processing capacity. It’s the first national strike by U.S. oil workers since 1980, when a walkout lasted three months. One of the sites affected has halted production, and a full strike of USW members would threaten to disrupt 64 percent of U.S. fuel output.

The United Steelworkers said in a statement late Tuesday that “there was little progress” made in its last meeting with Shell.

The USW has been asking for better health-care benefits and tougher measures to prevent fatigue and keep union workers rather than contract employees on the job. Union leaders on Tuesday offered a proposal that would limit the use of contractors at refineries and require that plants be “adequately” staffed, the statement posted on the USW’s website shows.

Gathering Data
Fisher said in a phone interview on Wednesday that Shell was gathering data on the use of contractors.

“We are opening our books to them with some sensitive data,” he said. “We look forward to getting back to negotiations.”

The union began the strike at seven refineries after negotiations with Shell fell apart and workers’ contracts expired on Feb. 1. Affected were Tesoro Corp.’s plants in Martinez and Carson, California, and Anacortes, Washington, and Marathon Petroleum Corp.’s Catlettsburg complex in Kentucky. In Texas, Shell’s Deer Park complex, Marathon’s Galveston Bay plant and LyondellBasell Industries NV’s Houston facility were targeted.

USW members at BP Plc’s 405,000-barrel-a-day Whiting and 135,000-barrel-a-day Toledo refineries joined the strike over the weekend.

Production Halted
Tesoro’s Golden Eagle refinery near San Francisco had halted all fuel production by Feb. 6. The plant already had about half of its output offline for maintenance before the strike and shut completely after the walkout began.

Shell’s Deer Park refinery had a breakdown at a fluid catalytic cracker on Feb. 8, Fisher said by e-mail on Wednesday. The unit, which upgrades gasoil into fuels including gasoline and diesel, was taken out of service and may restart on Thursday, according to the Sugar Land, Texas-based data provider IIR Energy.

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 since 2008, driven largely by surging output from U.S. shale formations that cut prices by 49 percent in the second half of 2014.

Refiners in the Standard & Poor’s 500 have more than doubled 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.

To contact the reporters on this story: Lynn Doan in San Francisco; Barbara Powell in Houston at

To contact the editors responsible for this story: David Marino Bill Banker

About Martinez Environmental Group

We are a community health and environmental group located in Martinez, CA.
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