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Energy Expert Fears Gas Price Spike From Strike at Chevron Refinery in Richmond

RICHMOND (KPIX) -- More than 500 workers at Chevron's Richmond refinery will likely strike at 12:01 a.m. Monday after members of United Steelworkers (USW) Local 5 voted down Chevron's most recent contract proposal.

The refinery produces gasoline, diesel, jet fuel and lubricating oils according to its website.

Experts believe refinery capacity is already tight.

"That makes a strike or any sort of shutdown in one of California's refineries particularly worrisome," said Severin Borenstein, a professor at the Haas School of Business at UC Berkeley.

"If we are running a very tight supply demand balance for our special blend of gasoline, it's going to be harder to replace the gasoline if any refinery reduces output," Borenstein said.

Gas prices in California are the highest in the country at more than $5.84 cents a gallon according to AAA.

Energy experts say the refinery supplies around 13 percent of California's production capacity.

"This would be a big hit if the refinery closed down entirely. I don't think people anticipate that happening but, even if we lost 5 percent of state supplies, that would really be noticeable right now," said Borenstein.

California gets some of its gasoline from states like Washington and parts of Asia but it would take weeks to bring in extra supplies.

According to a press release from USW, the union "encouraged Chevron to return to the bargaining table, but it refused, forcing workers to give notice of their intent to begin an unfair labor practice strike on March 21 at 12:01 a.m."

The previous contract between the union and Chevron expired Feb. 1, and members have since been working on a rolling 24-hour extension.

USW said in a statement it "reached a pattern agreement with the oil industry on wages and working conditions on Feb. 25, but each of the approximately 200 participating units also bargain over local issues before ratifying their individual contracts."

Chevron Refinery in Richmond
Aerial view of Chevron refinery in Richmond. (CBS)

Chevron responded in an e-mail to KPIX:

Unfortunately, the United Steelworkers (USW) Local 5 has called for a strike at Chevron Richmond which is expected to go into effect the evening of March 20. We believe our contract offer is fair, competitive, and responsive to USW concerns. We have negotiated in good faith for months, reaching two tentative agreements that were rejected by the union, and we are ready to continue discussions with USW so we can reach an equitable agreement. However, the union's demands exceeded what the company believes to be reasonable and moved beyond what was agreed to as part of the national pattern bargaining agreement. Currently in California, six of the nine USW-represented locations have ratified agreements with the same pattern wages and terms, and this includes two Bay Area employers (P66 and Martinez Refining).

Chevron Richmond is fully prepared to continue normal operations to safely and reliably provide the products that consumers need. We anticipate no issues in maintaining a reliable supply of products to the market. Chevron remains committed to safe operations for our workers and communities.

© Copyright 2022 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Bay City News contributed to this report

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