Workers strike for second day at nine U.S. oil, chemical plants

[February 02, 2015]  By Erwin Seba
 
 HOUSTON (Reuters) - Union workers were on strike for a second day on Monday at nine U.S. refineries and chemical plants in an attempt to force oil companies to sign a new national contract covering laborers at 63 plants.

The walkouts were the first held in support of a nationwide pact since 1980 and target plants with a combined 10 percent of U.S. refining capacity.

Talks broke down against a backdrop of plunging crude prices, which have fallen by half since June, prompting oil companies to cut spending.

The United Steelworkers union (USW) said Royal Dutch Shell Plc, the lead industry negotiator, halted negotiations early on Sunday after the union rejected a fifth proposal from the company. Shell said it would like to restart talks.

Shell activated a strike contingency plan at its joint venture refinery and chemical plant in Deer Park, Texas, to keep operating normally.

Other companies said they called on trained managers as replacement workers, so the strikes are not expected to cause gasoline prices to surge.

Still, oil prices fell early on Monday in Asia, with traders citing the strikes, which could potentially dent demand, and strong price gains last week.

Brent crude oil futures were trading at $51.63 a barrel at 0130 GMT, down $1.36, while U.S. West Texas Intermediate futures had dropped $1.37 to $46.87 a barrel.

Tesoro Corp said management was operating its refinery in Carson, California, and that managers would take over from union workers at its plant in Anacortes, Washington, in the next 24-48 hours. It said its Martinez, California, refinery, which was undergoing maintenance work, would be shut down.

Besides Shell and Tesoro, the USW said strikes were called at three plants belonging to Marathon Petroleum in Texas and Kentucky, and LyondellBasell's plant near Houston. At least two of the plants on the list have a history of deadly accidents.

The USW said all other refineries it represents - including Exxon Mobil Corp's refinery in Beaumont, Texas - would operate under rolling 24-hour contract extensions.

The expiring three-year national contract covers about 30,000 hourly workers at plants that together have two-thirds of U.S. refining capacity.

The latest rejected proposal was the fifth turned down since negotiations for a new three-year agreement began on Jan. 21.

The USW is seeking annual pay raises double the size of those in the last agreement. It also wants work that has been given in the past to non-union contractors to start going to USW members, a tighter policy to prevent workplace fatigue, and reductions in members' out-of-pocket payments for healthcare.

Gene Oliver, president of the union chapter at LyondellBasell, said the company brought 10 issues to the table and did not want to discuss all of the 36 points the union raised.

"They were unwilling to work on the issues," he said.

Independent refiners, such as Valero Energy Corp, have made big profits recently by tapping cheap crudes from the U.S. shale revolution, while refining units at integrated companies such as Exxon have provided a cushion against low prices hurting upstream operations.

But the drop in oil prices since last summer, when they were above $100 per barrel, has hurt the union's hand, analysts said.

(Writing by Terry Wade; Editing by Eric Walsh)

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