February 21, 2015 / 8:03 AM / 3 years ago

U.S. refinery strike widens to include nation's largest plant

HOUSTON (Reuters) - The U.S. refinery strike widened on its 20th day, with workers at the nation’s largest refinery walking off jobs and joining picket lines on Saturday as the United Steelworkers union (USW) pushes for a new contract that improves wages and safety.

Members of the United Steel Workers union picket the Tesoro refinery in Carson, California February 2, 2015. REUTERS/Bob Riha, Jr.

Strikes are underway or have been called at 15 plants, including 12 refineries with a fifth of U.S. crude processing capacity. The stoppages, which have forced companies to rely on trained temporary workers to keep plants running close to normal, are the largest in the refining sector since 1980.

Shortly after talks between union and oil company representatives ended on Friday night, the union notified Motiva Enterprises [MOTIV.UL] of a strike by its members at the company’s 600,250 barrel per day (bpd) refinery in Port Arthur, Texas.

The USW also gave notices on Friday of strikes to begin in 24 hours at Motiva’s 235,000 bpd Convent, Louisiana and 238,000 bpd Norco, Louisiana refineries and the Shell Oil Co chemical plant in Norco, the union said.

“The industry’s refusal to meaningfully address safety issues through good faith bargaining gave us no other option but to expand our work stoppage,” USW International President Leo Gerard said in a statement.

Both sides indicated further negotiations this weekend had not been scheduled.

Motiva is a 50-50 joint venture of Royal Dutch Shell Plc and Saudi Aramco [SDABO.UL]. Shell’s U.S. arm Shell Oil Co is the lead oil company negotiator in talks with the USW for a national agreement on safety, pay and benefits.

A Shell spokesman said the company was disappointed by the Port Arthur walkout and strike notices to the Louisiana plants.

“We believe this move sets the wrong tone for both parties to move forward and reach an agreement,” said Shell spokesman Ray Fisher. “We remain committed to continued safe operations and productive negotiations.”

The strike that began Feb. 1 was last expanded Feb. 6, when workers at BP Plc-operated refineries in Indiana and Ohio were told to begin a work stoppage the following day.

Workers were already on strike at Shell’s 327,000 bpd joint-venture refinery in Deer Park, Texas, and an adjoining chemical plant. The Deer Park workforce walked out when the strike began on Feb. 1.

The strike may complicate operations at the Port Arthur refinery, which failed to restore its second largest crude distillation unit (CDU) to full production after restarting on Friday following a three-day shutdown to fix leaking piping, sources told Reuters.

The 195,000 bpd CDU is one of three at the refinery that do the initial refining of crude oil coming into the plant and provide feedstock for all other production units.

The refinery’s largest CDU, which has a rated capacity of 325,000, bpd is running at about 200,000 bpd, the sources said, because a 60,000 bpd hydrocracking unit is shut due to a malfunction. The hydrocracker produces motor fuel, primarily diesel, which has become a lucrative export for U.S. refiners.

Motiva also shut a 92,000 bpd gasoline-producing fluidic catalytic cracking unit at the refinery in early January for an overhaul. It is scheduled to restart in the first half of March.

Shell and the union had been meeting continuously since talks resumed on Wednesday following a week-long break for the company to reply to an information request and a counterproposal from the USW.

Union negotiators rejected the seventh contract offer from Shell on Thursday night.

Earlier this week, the USW’s lead negotiator, International Vice President Gary Beevers, told Reuters that safe staffing levels at refineries and chemical plants were a sticking point in the talks.

Another point of contention is the absence of “no retrogression” language, which preserves agreements from previous contracts not addressed in negotiations this year.

In addition to the two BP-operated plants, workers are striking at refineries and plants owned by Lyondell Basell, Marathon Petroleum Corp, and Tesoro Corp in California, Kentucky, Texas and Washington state.

Only one refinery has shut down due to the strike.

Tesoro’s 166,000-bpd plant in Martinez, California, was scheduled prior to the strike for a partial shutdown to perform a planned multi-unit overhaul. Company officials decided to idle the entire plant after the walkout began and said production would not resume during the work stoppage.

The USW is seeking a three-year, industrywide pact that would cover 30,000 workers at 63 U.S. refineries that together account for two-thirds of domestic capacity.

Reporting by Erwin Seba; Editing by Terry Wade and Chizu Nomiyama

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