About 3,800 oil refinery workers at nine plants in California, Texas, Kentucky and Washington state carried out their second day of strikes Monday, calling for safer working conditions and better pay and benefits.
The strike comes at a routine juncture in labor relations: a contract renegotiation. But talks collapsed in acrimony Saturday night with both sides leaving the table and have not resumed yet, according to United Steel Workers International (USW), the union leading the strike. The union represents oil refinery employees in 65 plants across the United States, producing 64 percent of U.S. oil.
Crude prices have fallen by 50 percent in the last six months, but analysts say the strike is unlikely to reverse that trend or to significantly diminish refining capacity. The more important effects could be related to workers’ safety and the new contract they negotiate with the energy companies that employ them.
“This isn’t a monumentally important development in the oil market,” said Bob Tippee, editor of trade publication Oil and Gas Journal. He said refinery owners have pledged to keep their facilities humming with the help of management and replacement contractors, so the supply won’t become much tighter and the challenge to low oil prices will be minimal.
Oil prices had been high over the past few years, often topping $100 a barrel. But Lee H. Adler, a professor of labor law at the Cornell University School of Industrial Labor Relations (ILR), said the boon from high prices hadn’t been felt equally around the industry. Nor has the fall.
“Despite the plummeting oil prices over the last several months, the USW’s refinery employers have done very, very well since the last national contract with workers,” Adler told Al Jazeera.
“The USW refinery workers may not have gained as much since the oil boom, because they are paying higher health care costs and still find it difficult to combat the refineries’ attraction to hiring temporary, part-time workers. Putting all of these frustrations together likely has a strong influence on why the USW has made the strike decision it has in the oil refineries.”
But now falling oil prices — hovering around $50 — might give the union an advantage. Although the drop in prices has hurt “upstream” drillers and pumpers of oil, Tippee said refineries that turn the crude oil into something that can power cars and planes have benefited from the lower cost of crude.
“Think of the refiner like a baker,” Tippee said. “A baker uses flour. When the wheat price is low that hurts the farmer, but it helps the baker.”
Although money plays a role in negotiations, the union says the strike is more about safety than pay.
“This work stoppage is about onerous overtime; unsafe staffing levels; dangerous conditions the industry continues to ignore; the daily occurrences of fires, emissions, leaks and explosions that threaten local communities without the industry doing much about it,” USW Vice President Gary Beevers said in a press release.
Royal Dutch Shell, which is heading up the negotiations on the oil industry side, did not reply to requests for comment, but told Bloomberg News on Saturday that the company is “committed to resolving our differences with USW at the negotiating table and hope to resume negotiations as early as possible.”
Wayne Ranick, a spokesman for the union, said that while pay increases were part of the USW’s demands, the foremost goal is safety — something he said management has not been doing enough to improve.
“Do you go to work to get injured or killed? Why do you go? You want a paycheck, probably to take care of your family. People don’t go to work expecting to get injured badly,” Ranick said.
He said he doubts oil industry claims that it can counter the effects of the strike with non-union replacement workers.
The USW is keeping its options open — and that includes possibly expanding the strike beyond the nine plants so far involved, Ranick said.
He added that safety concerns should extend beyond workers to the public, saying recent explosions and accidents have endangered people who live near refineries.
He pointed to a 2005 accident that killed 15 workers in Texas City, Texas. Another refinery fire at a refinery near San Francisco in 2012 sent thousands of residents to the hospital reporting respiratory problems.
“Nobody wants a big industrial accident in their neighborhood,” he said.