Refiners, unions prepare for strike as contract deadline looms

By L.M. Sixel and Simone Sebastian
Houston Chronicle staff writers

Union officials are drawing up strike rosters while refineries prepare for possible shutdowns as a Wednesday deadline looms on nationwide contract talks covering 30,000 refinery and chemical workers – including 4,600 in the Houston area.

Negotiators with the United Steelworkers International and Shell Oil Co. met into the evening Monday on a contract to replace one that expires at 12:01 a.m. Wednesday.

One analyst warned that a strike that closed refineries could boost gasoline prices.

Shell is negotiating on behalf of the industry for a deal that would serve as the standard for wages, benefits and working conditions for union-represented employees nationwide.

Each side is getting ready in case of a walkout.

USW Local 13-1 in Pasadena set up a telephone “strike line,” and its website includes password-protected picket assignments for Shell and BP employees represented by the local.

BP said its Texas City refinery and unionized facilities in Indiana, Ohio and California will close temporarily in the event of a strike. Texas City refinery spokesman Michael Marr said it has 1,400 union workers.

“BP has an agreement with the USW where – in the event of a work stoppage – USW workers would safely shut down units at BP sites and the refinery would remain in that state until the work stoppage has ceased,” Marr said by email.

He said the company remains optimistic the two sides will reach an agreement and avert a strike.

LyondellBasell spokesman David Harpole said company managers will operate the refinery if union workers strike.

“We have trained management personnel who are certified to take over safe operation of the refinery,” Harpole said.

About 500 union and 500 non-union workers operate the plant, Harpole said.

Brian Youngberg, senior energy analyst for Edward Jones, said using management employees and non-union professionals to fill in for striking workers is a short-term fix, and that a strike eventually could shut down 10 percent of the nation’s capacity for producing refined fuels.

“If the strike prolongs, you will see supply really being curtailed, enough to really move prices,” he said.

Prices already have been climbing in recent weeks. Regular gasoline averaged $3.43 a gallon nationwide on Monday, about 15 cents higher than a month ago, AAA reported. The average price in Houston has climbed from $3.07 to $3.34 in the last month.

Neither side in the contract talks is discussing details publicly, although there have been some hints.

Last Tuesday, negotiators for Shell’s Deer Park refinery and chemical plant offered a three-year contract with pay raises of 1.5 percent in each of the first two years and 2 percent in year three, according to the USW Local 13-1 website.

Shell also offered to discuss establishing a fatigue standard, to add an additional person to a labor- management safety committee and to provide 40 hours of process safety training for committee members, according to the website.

Shell will not discuss details of the talks, spokeswoman Emily Oberton said.

The talks, which began on Jan. 17, cover 168 production, refining, marketing, transportation, pipeline and petrochemical facilities whose workers are represented by the USW, said Lynne Hancock, spokeswoman for the international union in Nashville, Tenn.

That includes 69 refineries representing 64 percent of U.S. refining capacity.

The average wage is $33.85 an hour, Hancock said.

When the contract last came up for negotiation in 2009, the workers received a 3 percent raise for each of the three years it covered along with a $2,500 contract ratification bonus.

Area facilities affected by the negotiations include Shell’s Deer Park refinery, chemical plant and chemical lab; BP’s Texas City refinery and chemical plant; Chevron Phillips Chemical Co.’s plant in Pasadena; BP Pipeline; Pasadena Refining System; and LyondellBasell’s refinery in Houston, according to the union.

Workers at Marathon Oil Corp.’s Marathon Petroleum’s refinery in Texas City, Baker Hughes’ plant in Pasadena and Exxon Mobil Corp.’s plant in Baytown also probably would be covered by a new agreement, but their contracts don’t expire until later, according to the union.