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Oil union talks with shell suspended as White House urges accord

6 February 2015 12:40 (UTC+04:00)
Oil union talks with shell suspended as White House urges accord

By Bloomberg

Talks to end the first national walkout of U.S. oil workers in more than three decades were suspended after the United Steelworkers union rejected an offer from energy companies. The White House urged a resolution to the impasse.

The latest offer from Royal Dutch Shell Plc, representing companies including Exxon Mobil Corp. and Chevron Corp., shows “minimal movement,” USW said in a text message distributed to members, adding that bargaining will resume next week. The union is awaiting a response from Shell for data requests, details of which weren’t specified. The company confirmed by e-mail that talks are in recess.

“We are monitoring the situation and urge labor and management to resolve their differences using the time-tested process of collective bargaining,” Frank Benenati, a White House spokesman, said in an e-mailed statement on Thursday.

An accord had the potential to end a strike at nine U.S. plants that account for about 10 percent of the country’s total refining capacity. It’s the first national walkout of 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 as much as 64 percent of U.S. fuel output.

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.

Refining Capacity

The refineries called on to strike can produce 1.82 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.

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 68 cents to $51.16 a barrel in electronic trading on the New York Mercantile Exchange at 11:24 a.m. Singapore time. Gasoline for March delivery gained 0.5 cent to $1.5298 a gallon.

United Steelworkers members do everything from operating units to performing maintenance to testing and analyzing samples in labs at U.S. refineries.

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, that cut oil prices by about half in the second half of 2014.

Refiners in the Standard & Poor’s 500 have more than doubled 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.

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