U.S. Oil-Worker Strike Reaches BP Plants With Talks on Hold

U.S. Oil-Worker Strike Reaches BP Plants With Talks on Hold

U.S. oil workers at two BP Plc plants in the Midwest are joining the biggest strike at refineries across the nation since 1980 as negotiations on a new labor contract were suspended until next week.

Workers at BP’s Whiting refinery in Indiana and the Toledo plant in Ohio that it co-owns with Husky Energy Inc. notified management that they’ll be joining the strike at 11:59 p.m. on Saturday, Scott Dean a spokesman for BP, said by e-mail Friday. The United Steelworkers, which represents 30,000 U.S. oil workers, has suspended negotiations with Royal Dutch Shell Plc, bargaining on behalf of employers, until next week.

The nine U.S. plants on strike and the two refineries headed for a walkout together total about 13 percent of the country’s refining capacity. It’s the first national strike by U.S. oil workers since 1980, when a work stoppage lasted three months. A full strike of USW members, employed at more than 200 U.S. refineries, fuel terminals, pipelines and chemical plants, would threaten to disrupt 64 percent of U.S. fuel output.

“BP is disappointed that USW leadership decided to call a strike at both the Whiting Refinery and BP-Husky Toledo Refinery,” Dean, based in Warrenville, Illinois, said by e-mail. “We are committed to ensuring a safe and orderly transition as USW employees choose to strike and trained replacement workers take their place.”

USW negotiators on Thursday rejected a sixth contract offer from Shell, representing companies including Exxon Mobil Corp. and Chevron Corp., saying the latest proposal showed “minimal movement.” Bargaining will resume next week as the union waits for data that it requested from Shell, the USW said in a text message distributed to members late Thursday.

Talks Recess

Ray Fisher, a spokesman for The Hague, Netherlands-based Shell, said by e-mail on Friday that talks had “recessed.”

The USW seeks better measures to address the health and safety of workers, and oil companies failed to alleviate its concerns, USW International President Leo Gerard said Saturday in a statement. The union began the strike after negotiations with Shell fell apart and workers’ contracts expired on Feb. 1.

“We are absolutely committed to negotiating a fair contract that improves safety conditions throughout the industry,” Gerard said. “Management cannot continue to resist allowing workers a stronger voice on issues that could very well make the difference between life and death.”

Gary Beevers, the union’s international vice president who heads the bargaining group, said in the statement that “little progress has been made on our members’ central issues concerning health and safety, fatigue, inadequate staffing levels that differ from what is shown on paper, contracting out of daily maintenance jobs, high out-of-pocket and health care costs.”

Strike Span

The refineries called on to strike can produce 2.36 million barrels of fuel a day, data compiled by Bloomberg show. They span the U.S., from Tesoro Corp.’s plants in Martinez and Carson, California; and Anacortes, Washington, to Marathon Petroleum Corp.’s Catlettsburg complex in Kentucky, to BP’s refineries in the Midwest.

In Texas, Shell’s Deer Park complex, Marathon’s Galveston Bay plant and LyondellBasell Industries NV’s Houston facility were affected, the union said.

“It is amazing that an industry — which has such a potential for danger both in the workplace and within the surrounding communities of their facilities — is refusing to engage in any serious dialogue,” USW International Vice President of Administration Tom Conway said in a statement.

U.S. benchmark West Texas Intermediate oil rose $1.21 on Friday to settle at $51.69 a barrel on the New York Mercantile Exchange. Gasoline for March delivery gained 3.43 cents to $1.5591 a gallon.

United Steelworkers members do everything from operating units to performing maintenance to testing and analyzing samples in labs at U.S. refineries.

Shale Boom

The White House is monitoring the negotiations between USW and Shell and urges the two sides “to resolve their differences using the time-tested process of collective bargaining,” Frank Benenati, a White House spokesman, said in an e-mailed statement late Thursday.

The USW and Shell began negotiations on Jan. 21 amid the biggest collapse in oil prices since 2008. U.S. refiners have been cashing in on the biggest-ever domestic oil boom, driven largely by volumes being pulled out of shale formations, which cut oil prices by about half in the second half of 2014.

Refiners in the Standard & Poor’s 500 have more than doubled in value since the beginning of 2012, when the steelworkers last negotiated an agreement. Marathon Petroleum Corp. and Tesoro Corp. 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.

SOURCE:  BloombergBusiness

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