Refinery Workers Set To Go On Strike

(AP)  With a third contract offer rejected, some 24,000 refinery workers from the Gulf of Mexico to Montana prepared to head to the picket lines Saturday just hours before an existing labor agreement expires.

The nation's biggest refiner, Valero Energy Corp., said it would shut down some facilities if workers strike. So did European oil company BP PLC.

Shell Oil Co., the lead negotiator for the industry, along with Exxon Mobil Corp., said its refineries would continue to make gasoline, diesel and other fuels using nonunion or replacement workers.

Chemical refiners would also be affected. LyondellBassell Industries said it was bringing in managers from locations not involved in contract negotiations to keep refineries going.

A strike would affect 60 producers, according to Lynne Baker, a spokeswoman for the United Steelworkers, which represents more than 30,000 oil workers nationwide.

Bobby Hollis, chairman of the negotiating committee for the Steelworkers at Valero, said it was doubtful that there would be an agreement by the midnight deadline.

Negotiations continued into Saturday evening and union officials said some progress was being made, but would not talk about sticking points.

Thursday, union negotiators turned down the most recent offer of a 2.5 percent wage increase for each of the next three years, in addition to changes in medical coverage.

The impasse comes with refiners already cutting back production and industry experts are divided over whether a strike would hit the pocketbooks of motorists.

Job numbers are in free fall, which has led to unprecedented declines in miles driven by Americans.

Motorists cut their driving by 12.9 billion miles in November, down 5.3 percent from the same month a year earlier, the largest such decline of any November since monthly data estimates began in 1971, the Federal Highway Administration said this month.

On the surface, that suggests retail gasoline prices should be falling, but refiners are reading the same headlines and have aggressively cut back production.

Refiner cutbacks and the threat of a strike pushed gasoline futures up throughout the week on the New York Mercantile Exchange.

Friday, gasoline futures rose nearly 4 cents to $1.27 per gallon. When gasoline futures rise, retail prices tend to follow. The national average for a gallon of gasoline hit $1.846 on Friday. While that's still $1.14 less than last year at this time, gas is getting closer to $2 a gallon just a month after bottoming out at $1.61.

With refiners turning away oil shipments, crude storage levels have risen by about 20 million barrels in the past month, according to the U.S. Department of Energy.

Antoine Halff, an analyst with Newedge Group, said workers may actually be doing the industry a favor by going on strike with demand for gasoline so low.

Many of the refineries are on the Gulf Coast, near Houston and New Orleans. There are about 4,000 refinery workers in Houston alone. But the strike would reach into California, Montana, and Tennessee, which also have refineries with labor contracts expiring.

Valero told employees Friday that it would close its facilities in Delaware City, Del., and Memphis, Tenn., if there is a strike.

The company said it would keep its Port Arthur, Texas, plant open with a contingency work force that is being trained.

"We would rather reach an agreement without a work stoppage at all," said spokesman Bill Day.

Exxon Mobil said negotiations were ongoing, but that plants would remain operational until a collective bargaining agreement was reached.

[ausus-2009]

You should note that Shell, BP and Citgo are all foreign owned. They and their subsidiaries make up a large share of the US gasoline market.

They all have offshore refineries. They could import refined gasoline to the US and avoid union and non-union workers. The real loser would be the American worker. At least a non-union worker is an American.

[starleo146]

Shell Oil Co., the lead negotiator for the industry, along with Exxon Mobil Corp., said its refineries would continue to make gasoline, diesel and other fuels using nonunion or replacement workers.

Chemical refiners would also be affected. LyondellBassell Industries said it was bringing in managers from locations not involved in contract negotiations to keep refineries going.

boycott these gas and oil companies they do not care about workers producing there profits every quarter only one thing matters to BIG OIL, and that isthere profit margins. We, they say we will go over there heads forget a contract and get some scrubs to do there job

[ausus-2009]

antoniof123,

Haven''t you ever heard of the Japanese spring offensive? Every year the Japanese workers go out on strike for bonuses. These bonuses actually total more than their annual salary. It makes any figures out of Japan rubbery. As well, the average production worker in Japan actually makes a lot more than the average production worker in the US. That is why as long as 30 years ago Japan could no longer afford to manufacture low-cost items. Look at your Japanese branded electronic equipment and it is likely to have been made in Korea, Taiwan, Thailand or Malaysia.

[patrik1974]

If oil refining is lowered, in theory crude prices should go down. Exxon will be able buy $10 a barrel oil and sell $4.00 gallon gas. Once the strike is over, barrel prices will go back up, but gas prices will take 4 to 6 months to lower to pre strike levels. And once again Exxon will have record profits.

[antoniof123]

IT DEPENDS ON WHAT THEY ARE ''''STRIKING'''' ABOUT..most IF NOT ALL OF THESE UNION ********* ARE THE CAUSE OF THE PROBLEMS..

from $20 an hour janitors to $120,000.00 a year union bosses

Posted by inDAmiddle at 03:37 PM : Feb 02, 2009

Same old tired lie the right wing keeps trying to pile on the American people. Janitors do not make that much money in any company PERIOD.

Just like the lie about the UAW look it up their contract says 28.71 per hour Honda pays 30.00 per hour in Ohio. Of course the top 10 paid executives at Honda don''t make what 1 exective makes at GM.

Oh I think I see the problem it isn''t labor it is management.

Go home wing nuts get a book and read it then take a look at the contracts that is the law and the bible enforcable in court.

Oh by the way one of the main reason EB is so low in Japan is becuase they pay taxes to get medical treatment there.

Oh no not another fact for you wing nuts.

[cdegolier]

They should be lucky they have a job. This country needs to do away with all unions. Look at what they did to the auto industry. Greedy ***.

[noloyalisti]

Coool, strike! Power to the workers. Power to the people. I will support ANY strike and if we all do it, we will own our country again.

[jtdev1]

2.5% raise when they are making 45+ Billion in profits?

The oil companies are wanting the union to strike in order to raise the price of gas back to the $4.00/gal mark again.

By Hook or By Crook, the price of gas will be $4.00/gal.

[travlyn]

Everyone keeps forgetting that the union is negotiating for more than just a cost of living pay raise. They are fighting to restore the retirement benefits that have been lost by retired workers both union and non-union and medical benefits lost by retirees and active labor, just to name a few of the items I feel are more important. I am union in a refinery and this job allows my family to be a single income family, but I earned my way into this job.

The oil industry doesn''t just effect your heating oil, propane, diesel, gasoline, it also effects the chemical industry''s ability to make plastics, cosmetics, fetilizers, and pesticides. If you want a trickle down effect, look at that.

[ausus-2009]

rightaboutit,

Your solution to the oil industry could have several effects:
1. push prices through the roof
2. open the market to cheap imports, making American refineries unviable
3. put up tariff barriers which would create a trade war so nobody overseas would buy American goods
4. lead to a rash or other nationalizations ultimately including the media so there would be little to distinguish the US from the former Soviet Union.
5. add to the bloated, overpaid, unproductive federal and state bureaucracies that produce little more than policy documents
6. create an inflation whereby the standard of living of all Americans fall.

From the point of view of the global warming mob, this would all be a good result because few would be able to drive or even own cars, except for the bloated bureaucrats.

The rest of us would live in grinding poverty.