U.S. Oil Workers’ Strike Expands to BP Plants With Talks on Hold

Bloomberg – by Lynn DoanAngela, Greiling Keane

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 health-care benefits and measures to prevent fatigue and keep union workers rather than contract employees on the job, USW international president Leo Gerard said in a phone interview from Pittsburgh Feb. 2. The union began the strike after negotiations with Shell fell apart and workers’ contracts expired on Feb. 1.

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.

Texas Refineries

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

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.

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.

Shale Boom

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.

To contact the reporters on this story: Lynn Doan in San Francisco atldoan6@bloomberg.net; Angela Greiling Keane in Washington atagreilingkea@bloomberg.net

To contact the editors responsible for this story: David Marino atdmarino4@bloomberg.net Richard Stubbe

http://www.bloomberg.com/news/articles/2015-02-07/u-s-oil-workers-strike-expands-to-bp-plants-with-talks-on-hold