Refinery strike expected to have little effect on gas prices

Refinery workers on strike in four states, including California

About 3,800 workers struck for the second day Monday at nine U.S. refineries, including one in Carson, following the breakdown of contract negotiations between the United Steelworkers union and Shell Oil Co.

The job action, which began Sunday, is the largest strike of refinery workers since 1980, union officials said. The USW called for the strike after Shell management did not meet its demands regarding safety and health insurance issues.

“Shell refused to provide us with a counteroffer and left the bargaining table,” USW International President Leo W. Gerard said in a news release. “We had no choice but to give notice of a work stoppage.”

A Shell representative told the Associated Press that that the company remains “committed to resolving our differences with USW at the negotiating table to reach a mutually satisfactory agreement.”

The affected refineries include two in California -- Tesoro  refineries in Carson and Martinez -- as well as five in Texas and one each in Kentucky and Washington.

About 800 workers are on strike at the Tesoro Carson Refinery, said David Campbell of USW Local 675, which represents most refinery workers in Southern California.

Workers at the Carson refinery are prepared to hold out as long as necessary, Campbell said.

"As far as how long it goes, no one has a crystal ball," Campbell said. "We don't know."

Tesoro said it will continue operating its Carson refinery and another affected by the strike in Anacortes, Wash. The company said that because the strike occurred during ongoing maintenance at its Martinez plant, “the safest operating position at this time is to idle the remaining process units.”

Fadel Gheit, senior energy analyst for Oppenheimer & Co., said the strike will “have very little impact, if any, on gas prices.”

Traders may try to capitalize on the uncertainty, putting a slight upward pressure on gas prices, but historically U.S. refineries keep operating despite strikes, he said.

“It really has never been a major issue,” Gheit said of strikes.

USW spokeswoman Lynne Hancock said the union wants a three-year contract and is prepared to broaden the strike to other refineries if the impasse continues. She said no new talks have been scheduled.

United Steelworkers represents about 30,000 workers at refineries, terminals, petrochemical plants and pipelines across the country. Shell is serving as the lead company in national bargaining talks with the union.

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Copyright © 2016, Los Angeles Times

UPDATES

10:40 a.m.: This article has been updated with comments from analyst Fadel Gheit.

8:16 a.m.: This article has been updated to include comments from Tesoro and news that the strike continued Monday.

This article was originally published Feb. 1 at 5:20 p.m.

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