February 5, 2015 / 3:02 AM / 5 years ago

Fourth day of U.S. refineries strike ends with new offer

HOUSTON (Reuters) - The United Steelworkers union (USW) said a new contract offer was made by lead oil company negotiator Royal Dutch Shell Plc (RDSa.L) on Wednesday night as a strike by U.S. refinery workers ended its fourth day.

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

“The USW has received an offer and will respond after consideration of the offer tomorrow,” USW spokeswoman Lynne Hancock said. “I don’t know what time they will consider it. Contents of the offer will not be revealed.”

About 4,000 workers at nine plants, including seven refineries accounting for 10 percent of U.S. refining capacity, continue to walk picket lines in California, Kentucky and Texas.

In a text message to members seen by news media late on Wednesday, the USW said: “minimal progress today.”

Asked about the offer, a Shell spokesman simply said the two sides had continued negotiations on Wednesday.

The two camps have been in a stalemate since the USW called walkouts early on Sunday, saying Shell had left the negotiating table when talks broke down.

The talks have been tougher than in years past. A drop of more than 50 percent in oil prices since June has eroded profits at major oil companies, prompting executives to say they cannot afford to lift wages for workers.

Further walkouts may be ordered at some of the other refineries and chemical plants the USW represents if there is no progress in the talks, the union has said.

The union represents a total of 63 refineries accounting for two-thirds of national crude oil refining capacity.


Also on Wednesday, two of the refineries affected by the strike, Tesoro Corp’s TSO.N Los Angeles-area refinery in Carson, California, and Marathon Petroleum Corp’s (MPC.N) Galveston Bay Refinery in Texas City, Texas, reported leaks to regulators.

A Marathon spokesman said emergency responders in Texas City were notified of the leak as a precaution.

Marathon Chief Executive Gary Heminger, whose company owns two of the refineries where workers are on strike, deferred to Shell as the lead negotiator regarding any comment, calling the talks a “delicate situation.”

Since bargaining first started on Jan. 21, the union has rejected five offers from Shell.

The union is seeking annual pay increases of 6 percent, double the size of those in the last agreement. It also wants work that has been given in the past to non-union contractors to start going to USW members, a tighter policy to prevent workplace fatigue and reductions in members’ out-of-pocket payments for healthcare.

The USW has also said the issues directly affect the safety of refinery workers.

While acknowledging that upstream businesses have been hurt, labor leaders say independent refiners and the refining units of integrated companies have been posting big profits thanks to cheap prices for U.S. crudes they turn into gasoline and diesel.

The walkouts are in support of a nationwide pact that would cover 30,000 workers and mark the industry’s first big strike since 1980.

Most of the affected refineries are being run near normal by managers, retirees and others from non-union plants brought in to replace workers.

“We were very well prepared,” Heminger said on a results call. “We would expect to have very strong operations.”

One plant owned by Tesoro Corp TSO.N was shutting down due to maintenance work already under way.

While refiners are promising little or no disruption to production, wholesalers and others have snapped up supplies.

The strike helped lift gasoline futures RBc1 early in the week, though prices were down about 6 percent on Wednesday below $1.51 a gallon.

Additional reporting by Jessica Resnick-Ault in New York and Kristen Hays in Houston; Writing by Terry Wade; Editing by Alden Bentley and Alan Raybould

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