Refiners, union have tentative deal

02 01, 2012 by Fuel Fix

The United Steelworkers Union reached a three-year deal Tuesday night with the nation’s refineries and chemical plants, hours before a midnight deadline that could have put 30,000 workers on strike and reduced U.S. fuel-making capacity.

The tentative agreement is subject to approval by the workers the union represents at 168 production, refining, marketing, transportation, pipeline and petrochemical facilities – including 4,600 workers in the Houston area.

The union did not disclose details of the agreement.

A source familiar with the negotiations confirmed reports that prior to the conclusion of the agreement, union negotiators had rejected a fourth offer that would have included a three-year contract with a 2 percent raise in the first year and 2.5 percent increases in each of the second and third years.

Another sticking point was process safety improvements the union wanted.

As the deadline approached Tuesday, union officials put three refineries on notice that workers could strike if they didn’t reach a deal by the deadline.

Strike warnings went to Valero Energy Corp.’s refinery in Port Arthur; BP’s in Whiting, Ind.; and Exxon Mobil Corp.’s in Billings, Mont.

Under labor agreements, the union must give a 24-hour notice before it intends to strike and offer to do a safe and orderly shutdown, said Lynne Hancock, spokeswoman for the United Steelworkers in Nashville, Tenn. The notice doesn’t necessarily mean a strike is imminent but it lets the company and union prepare for a walkout.

BP had said it would shut down the Whiting refinery if the workers went on strike; Valero said it would operate in Port Arthur using managers and nonunion employees. Exxon Mobil did not say whether it would halt operations or find replacement workers.

The United Steelworkers and Shell Oil Co., which represented the oil and chemical industry in negotiations, met in Austin to hammer out the deal.

The talks began Jan. 17. LyondellBasell, ConocoPhillips and Marathon Petroleum are among other companies that have refinery workers governed by the contract.

Union members work at 69 of the nation’s 140 operating refineries, with 64 percent of the U.S. refining capacity, the union said.

BP’s Indiana refinery can process up to 405,000 barrels of crude per day, about 2.5 percent of the nation’s total oil refining capacity.

Valero’s Port Arthur refinery, which employs about 820 workers, is the 13th-largest in the country, refining up to 300,000 barrels a day. Exxon Mobil’s Billings refinery has a daily capacity of 60,000 barrels.

Valero never has had a strike at one of its refineries, spokesman Bill Day said Tuesday.