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RE: Update – Refinery National Oil Contracts set expire Midnight Sat

Home Forums Refining Community Refinery News Update – Refinery National Oil Contracts set expire Midnight Sat RE: Update – Refinery National Oil Contracts set expire Midnight Sat


Joshua Lege

Workers may strike at 11 Houston-area refineries
By L.M. SIXEL Copyright 2009 Houston Chronicle
Jan. 28, 2009, 11:08PM


Workers at 11 area refineries and chemical plants could go on strike as early as Sunday if ongoing negotiations fail to produce a new contract.
Labor agreements that cover 30,000 energy and chemical workers nationwide, including 4,200 Houston-area employees, expire at 12:01 a.m. Sunday. Key remaining sticking points are wages, medical insurance, and health and safety concerns, said Alan Barnes, treasurer of the United Steelworkers union Local 13-1.
So far, union negotiators have rejected two contract offers. The most recent one called for a 2.5  percent raise the first year and 2  percent raise in each of the second and third years of the contract, Barnes said.
The union, which is meeting in Austin with officials from Shell Oil Co., lead negotiator for the energy industry, have said previously that workers are seeking substantial wage increases. Barnes said union officials were waiting for another contract offer to arrive late Wednesday.
Local facilities affected by the contract talks include Shells Deer Park refinery, chemical plant and chemical lab; BPs Texas City refinery and chemical plant; INEOS NOVA chemical in Texas City; Chevron-Phillips Chemical Co.s plant in Pasadena; LyondellBasell Industries refinery in Houston; BP Pipeline; and Pasadena Refining System.
Squeezed margins
While union officials say theyre ready to strike if they must, theyd be doing it at a time of squeezed refining margins the difference between what a refiner pays for a barrel of crude and what it gets for the products made from it.
If they do walk out, companies could save money in the long run because of very, very poor margins in the current market, said Peter Beutel, oil analyst and president of Cameron Hanover in New Canaan, Conn. He pointed out he is not taking a side.
On Tuesday, Valero Energy Corp. said it was shutting down its refinery in Texas City instead of keeping parts of it open while it performs regular maintenance. Typically, a refinery keeps running units that arent undergoing work so its owner can keep selling products.
BP told employees and union leaders it would not train replacement workers to operate refineries in the event of a strike. Spokesman Michael Marr said that the company believed that strike training would stop or even reverse its progress on a safety initiative. Marr said the company is optimistic about reaching an agreement.
Backups at LyondellBasell
LyondellBasells Houston refinery has trained management personnel to operate its 700-acre plant, spokesman David Harpole said. About 500 refinery workers are represented by the union.
Tom Strifler, vice president of manufacturing for INEOS NOVA, said the chemical plant in Texas City is down and hasnt been restarted since Hurricane Ike. The company doesnt plan to restart until market conditions improve. Marathons refinery in Texas City and Exxon Mobils in Baytown also are part of the bargaining, but their contracts dont expire until later.
Even if a national deal is agreed upon, workers at individual refineries can strike over local issues. And Barnes said thats a possibility for the 900 workers at Shells Deer Park refinery and chemical plant.
One of the sticking points is a proposal by Shell to limit the amount of overtime each employee can work to 30 percent of their normal annual hours to prevent fatigue. But management reserves the right to waive the rule and requires some employees to work more overtime than the cap permits, said Barnes.
The union also is upset with Shells proposal to stop using a seniority system for assignments and to replace more employees with contract workers, said Barnes.
Shell is committed to providing a safe workplace for our employees, contractors and local communities, said David McKinney, communications manager at Shell Deer Park. The changes we propose in the contract with USW regarding overtime and excessive job changes are intended to do just that.

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