January 28, 2009 at 4:51 am #3211
National oil contract set to expire midnight Saturday; local refineries affected
By DAN WALLACH January, 26, 2009 Beaumont Enterprise – MCC Local news
Refinery workers at ExxonMobil Beaumont and Valero Energy Port Arthur could be walking picket lines by 12:01 a.m. Sunday if negotiations don’t result in a new contract. The pact between labor and the refineries expires at midnight Saturday.
Such an outcome could upend seven years of labor stability in a region once known for fractious relations between union workers and management.
A couple of things could happen, said Mark Hidalgo, president of the union local that works at ExxonMobil: a series of 24-hour extensions could begin if contract progress is made or workers will strike.
A walkout could affect private contractors who work on projects within the refineries and the vendors who supply them, bringing a variety of construction activities to a standstill.
It also could affect the nation’s supply of refined products such as gasoline if supervisors and other salaried employees must turn their attention to the work done by union labor.
And obviously, it could affect union workers’ pay, which circulates through the local economy in consumption of goods and services.
The United Steel Workers represents more than 30,000 oil workers nationwide. Southeast Texas accounts for about 10 percent of that total, and Texas Gulf Coast refineries clustered in and around the Houston area – including Southeast Texas – could involve about 15,000.
The international union and local unions are negotiating at the same time.
At Valero, union local president Bobby Hollis said the local negotiations seem stuck. “We don’t have a lot of confidence anything will change,” he said. “We’re not getting a whole lot done. There could be a walkout at midnight Saturday.”
Other refineries in the area also are covered by the national union oil contract, which the United Steel Workers is hammering out with Royal Dutch/Shell. That firm was the lead national industry negotiator in 2002.
Motiva Enterprises and the Total Petrochemicals Inc. refineries are part of the national oil bargaining, but their contract expirations are later than ExxonMobil’s and Valero’s.
That national contract sets a pattern for other oil companies to follow. The local unions are pursuing their own issues as well, Hollis said. Hollis said his union local and Valero are negotiating about sick leave and vacation.
The union represents about 500 workers at the refinery, and an additional 125 at the Chevron Phillips chemical plant adjacent to Valero. The local issues at Chevron Phillips are resolved, he said.
Valero Energy Corp. refinery spokesman Bill Day said if the two sides do not reach agreement by midnight Saturday it doesn’t necessarily mean a work stoppage.
Day said industry and the union have a “gentlemen’s agreement” not to discuss negotiations in the media and Day added he didn’t want to talk about contingency plans for refinery operations in case there is no agreement on Saturday.
At ExxonMobil, Hidalgo said no one can predict the outcome until the end of the week. ExxonMobil spokeswoman Kathleen Jackson said the refinery still “is actively negotiating.” ExxonMobil’s refinery employed about 1,250 people, of whom 800 were covered by the labor contract in the last round of negotiations.
Hollis said the last time negotiations came down to the contract expiration point was when the Port Arthur refinery was owned by Chevron, which had acquired it from Gulf Oil Corp. in the mid-1980s. In 1995, Chevron sold it to Clark Refining Corp. later Premcor, which sold to San Antonio-based Valero in 2005.
Most recent bargaining on the national oil contract was in 2002, and that four-year contract was extended for three years in February 2006.
At the national level, United Steel Workers are negotiating in Austin, said Jim Lefton, the union’s director for Texas. Lefton described the bargaining as “tough,” but couldn’t relay specifics except to say the negotiations include wages, health and safety and health care.
In October, the union agreed on a national bargaining policy that included items such as “substantial wage increases,” including a cost-of-living adjustment.
The policy also sought “fully paid medical, dental and vision coverage with no reduction in benefit for the contract coverage period to Feb. 1, 2012.”
The policy sought two additional paid holidays – January’s Martin Luther King Jr. Day plus one other. Employers also will provide future retirees with comprehensive medical coverage at no cost to the employees, according to the union’s bargaining policy.
The steel workers’ oil bargaining policy also wants “no retrogression,” which means other contract items won’t be revised, such as no layoffs in case a plant is sold to another operator.
In a prepared statement from late October when the oil policy bargaining committee crafted the proposal, committee member Jim Savage said, “This policy will help oil companies retain quality people and keep their workplaces safe
January 29, 2009 at 4:36 am #6300
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.
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.
January 31, 2009 at 3:09 pm #6292
BPs Possible Refinery Closures May Boost Competitors Margins
By Jordan Burke
Jan. 29, 2009 (Bloomberg) — BP Plcs decision to shut four U.S.
refineries if the United Steelworkers decide to strike over
contract negotiations may raise regional fuel prices, benefiting
competitors such as Exxon Mobil Corp. and Citgo Petroleum Corp.
If BP announces that this weekend, the market would surge
10 to 15 cents higher, said Dominick Chirichella, a senior
partner at the Energy Management Institute in New York, in a
telephone interview. If they do shut them down, you will get
an overreaction to it. Refined product prices would rise, and
crude prices would fall.
Refiners and the union are negotiating a labor contract
this week that affects about 30,000 employees, or 58 percent of
U.S. oil workers. If a strike is called, BP said it will shutter
plants in Whiting, Indiana; Texas City, Texas; Carson,
California; and Toledo, Ohio.
If BP shut its Whiting, Illinois, Chicago-area refining
capacity would drop by 50 percent, according to Energy
Department data. The closure may potentially boost processing
margins at Citgos Lemont, Illinois, plant and Exxons Joliet,
Illinois facility, Chirichella said.
BP chose not to train replacement workers because we have
been working closely with our unions to improve the safety and
operations at our facilities, said Scott Dean, a BP spokesman,
in a telephone interview.
A shutdown of the Texas City plant would reduce area
processing capacity by 62 percent. Closures of plants in Carson
and Toledo would cut area processing capacity by 25 percent and
36 percent respectively, according to Energy Department data.
The price of regular gasoline for prompt delivery in
Chicago rose 6.44 cents, or 5.5 percent, to $1.2425 a gallon at
12:45 p.m., according to data compiled by Bloomberg.
–Editor: Charles Siler, Robin Saponar
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