USW Strike: Shell To 'Continue Operations' As Refinery Workers Begin Picketing

Workers at nine petrochemical locations in four states across the U.S. walked off the job Sunday morning, when a strike was called because of a breakdown in contract negotiations between the United Steelworkers union and Royal Dutch Shell PLC, the USW said in a statement on its online site. Among those involved in the industry’s first nationwide walkout in 35 years are employees of Shell’s chemical plant and its oil refinery in Deer Park, Texas.

Company representative Rick Fisher said it would employ a contingency plan to “continue operations in the normal course of business,” CNN Money reported. The firm is looking “to resume negotiations as early as possible to get our employees back to work,” he said.

The negotiating parties have been seeking since Jan. 21 to secure a successor to a three-year collective-bargaining agreement that expired this weekend, Bloomberg Business reported.

“Shell is the lead company for the national oil bargaining talks,” the USW said in its statement. “National negotiations focus on establishing a pattern on wages, benefits and working conditions. Local-union and unit negotiations focus on local issues at the particular facility.”

Overall, the USW represents workers at more than 230 particular facilities across the country. They encompass oil pipelines, oil refineries and oil terminals, as well as other petrochemical facilities. Those unaffected by the strike at this time are continuing to operate under a rolling 24-hour contract extension.

Besides Shell’s two facilities, those affected are the LyondellBasell Industries NV plant in Houston; the Marathon Petroleum Corp.’s oil refinery in Catlettsburg, Ky., as well as its cogeneration facility and its oil refinery in Texas City, Texas; and two of the Tesoro Corp.’s oil refineries in California (Carson and Martinez) and one of them in Washington (Anacortes).

The strike was called at a time when crude-oil prices have been plummeting for months, which can be a bane for producers but a boon for refiners. The U.S. benchmark commodity’s price per barrel plunged to $44.80 this Jan. 26 from $107.95 last June 20, according to Federal Reserve Economic Data.

Negotiations between the USW and Shell broke down after the two sides failed to reach an agreement over wages and other issues.

“Shell refused to provide us with a counteroffer and left the bargaining table,” USW International President Leo Gerard said in a statement. “We had no choice but to give notice of a work stoppage.” The plants targeted by the walkout represent about 10 percent of U.S. refining capacity, Bloomberg data show.

Negotiations in the industry have gotten tense before, most notably in 2009 when the two sides reached an agreement three days past their deadline. Refineries were allowed to continue operating while a deal was being reached, according to the Wall Street Journal.

The last time the USW called a nationwide strike was in 1980, when the walkout lasted about three months, Bloomberg Business said.