In an industry just waiting…
Oil prices fell on Friday…
Royal Dutch Shell and the United Steelworkers (USW) have reached a tentative agreement on a new contract covering pay, worker safety and other matters to end a nearly 6-week-old walkout at refineries around the United States, though it’s not clear how soon the strikers will be back at work.
Negotiations commenced on Jan. 21, and the strike began 11 days later with the union accusing Shell, acting on behalf of employers including Exxon Mobil Corp. and Chevron Corp., of negotiating in bad faith. The chief issues were safety and increased reliance on non-union workers.
As the talks dragged on, as many as 6,500 USW members were idled at the peak of the strike in the largest such labor action involving refineries since a six-month strike 35 years ago.
Related: 15 Refineries Now Affected As USW Strike Expands
Aamir Farid, Shell’s vice president of manufacturing, said in an e-mail that under the new settlement, USW members will receive a 2.5 percent raise in the first year, 3 percent more in the second and third years, and 3.5 percent in the fourth.
The USW said the new contract also will require an immediate review of staffing and workloads for members of the union, keeping health benefits at their current levels and annual pay raises during the life of the contract.
“We are glad to have found common ground and get an agreement in place,” Farid’s e-mail said. “Now, … let’s welcome everyone back with care and respect.”
Related: Strike At US Refineries Expands To 2 More Sites
But any welcome may have to wait. Wayne Ranick, a USW spokesman in Pittsburgh, said in an e-mail that work would not resume until the contract is ratified by union membership. Further stalling a work resumption is the fact that operators of the facilities must still work with USW locals to iron out issues at specific plants, according to the USW.
The strike began Feb. 1 at seven oil facilities and eventually spread to 15 refineries and chemical plants in California, Washington State, Indiana, Kentucky, Louisiana, Ohio and Texas. Of these facilities, 12 are responsible for about 20 percent of US oil production. Union workers at the plants are responsible for maintenance and lab work.
The USW strike contributed to rising gasoline prices, especially in California, where pump prices recently soared to $1 above the national average. Now there’s hope in some quarters that the strike’s end will bring the price back down.
Related: Despite Oil Price Plunge, California Gasoline Prices Soar
“Various factors, including the strike, just made the market really unstable,” Allison Mac, an analyst with of the fuel-tracking firm GasBuddy, told the Los Angeles Times. “Now that it looks like there’s an end in sight, and more supply will be coming in … , that will absolutely make the prices go back down.”
But ending the strike won’t necessarily bring down fuel prices on its own. Jeffrey Spring, a spokesman for the Automobile Club of Southern California, said the strike may have been more of “an annoyance rather than a deep impact” on gasoline prices.
What really sent prices up was the Feb. 18 explosion at an Exxon refinery in the Southern California town of Torrance. But Spring said even the effect of that accident is passing and the cost of gasoline already is beginning to stabilize.
By Andy Tully of Oilprice.com
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Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com