Workers at Louisiana Refineries Assess Tentative USW-Shell Deal

03/15/2015 04:11 pm ET | Updated May 15, 2015

This post is published in The Louisiana Weekly in the March 16, 2015 edition.

The United Steelworkers Thursday reached a possible four-year pact with Shell Oil in a seven-state strike that spread to 12 refineries and three other plants, including several in Louisiana. Three weeks ago, most of the USW's more than 700 combined members at the Motiva Enterprises refineries in Norco and Convent, La. and the Shell Chemical LP plant in Norco joined the walkout. The strike, which began at nine sites on Feb. 1, grew to include over 6,500 USW members in the biggest such action since 1980. It started because the USW felt the industry hadn't bargained in good faith on safety matters.

Motiva Enterprises is a joint venture between Shell and Saudi Refining, Inc.

Thursday's deal calls for joint, union-employer reviews of workloads, staffing, and daily maintenance and repair activities. Hiring will be planned in tandem with training programs. Wage increases and keeping current, healthcare cost-sharing are part of the pact. The agreement will guide other oil companies in local bargaining, the USW said.

Local unions are reviewing proposals between their employers and the USW now, and if approved, those agreements will go to members for ratification.

Striking workers, meanwhile, haven't received paychecks, and they've worried about non-union employees and machines doing their jobs.

As for issues in the strike, "safety has been the most important one," USW spokeswoman Lynne Hancock in Pittsburgh said last week. She pointed to 27 deaths at U.S. refineries in the past five years, along with 349 reported, safety-related incidents in the last seven years. "A few weeks ago, an explosion in Torrance, California injured four workers and shook the entire community," she said. That was at an Exxon Mobil refinery.

"And in Norco, Louisiana in 1988, an explosion at Motiva, which was then Shell, killed seven union members," Hancock said. Another 42 people were injured in the 1988 Norco disaster that is locally called the "big bang." Before that, two neighbors near the Norco refinery died in 1973 from a blast sparked by a pipeline.

Growing reliance on contract workers has been an issue. "The USW understands the industry's need for contractors to perform new and major reconstruction and for them to work on turnarounds," Hancock said. Turnarounds are revamping projects that usually require a unit at a plant to be offstream for awhile. "But daily maintenance and repairs are the work of USW members," she said.

Other issues have included inadequate staffing at refineries, staff numbers that differ from what appears on paper, and healthcare costs, USW international vice president Gary Beevers, who heads the union's National Oil Bargaining Program, said in early February.

Entire communities depend on these plants. "Motiva's Norco facility has around 1,200 total employees, and at Convent we have about 700," Motiva spokesman Cameron Yost said last week. He wouldn't say how many are USW members. "Out of respect for their privacy, we won't disclose their status."

But USW spokesman Wayne Ranick in Pittsburgh said the union's membership includes 266 workers at Motiva in Norco, 283 employees at Motiva in Convent, and 182 at Shell Chemical in Norco. "The vast majority are out on strike," he said last week.

Nonetheless, all three Louisiana plants were operating last week, Hancock said.

Shell enacted a contingency plan at its Deer Park, Texas refinery on Feb. 1 and then at its chemical plant in Norco, using Shell-trained "relief employees," with the intent of getting those sites fully operating by this summer. That was according to a March 2 letter to staff, posted on the company's website, by Shell's Americas manufacturing vice president Aamir Farid. Contingency plans have been drawn up for all of Shell's USW-represented sites for well over a year, he said.

Some of the striking workers returned to their jobs before the recent deal was struck. Over 100 USW members at Deer Park are back at work. "This isn't unusual in work stoppage situations that are very challenging times for workers and their families," Hancock said.

U.S. refineries have been increasingly automated in the last decade, and many of them can run for awhile with managers and contract workers, along with company employees brought in from elsewhere. In 2007, Motiva's Norco refinery digitally automated many of its instruments and was able to increase output afterward.

Under federal law, employers can hire replacements when workers strike. But once an unfair labor practice strike is settled, the strikers are to be reinstated even if their replacements have to be laid off.

During the recent walkout, the USW and others have lent a financial hand to strikers. "The USW has a strike and assistance fund to help workers having trouble paying their bills," Hancock said. "Local unions and members not on strike donate money to the fund if they wish." Other sympathizers make contributions to striking USW locals.

"Face-to-face discussions between Shell and the USW continued in Houston today," Yost said late Wednesday before Thursday's tentative deal. A USW policy committee headed to Houston Wednesday to review any proposals, Hancock said. Up to that point, progress in the talks had been slow, she said. The USW had rejected seven recent contract offers from Shell.

"Shell remains committed to negotiating a mutually satisfactory agreement," Yost said Wednesday.

The USW represents workers at 65 refineries, accounting for over 60 percent of the nation's processing capacity, along with employees at oil terminals, pipelines and petrochemical plants. A U.S. oil workers' walkout in 1980 lasted for three months.

U.S. gasoline prices rose in February, partly because of the strike at 12 refineries, but have eased a bit since.

Before Thursday's tentative deal, USW oil workers planned to hold a March 19 rally in Chicago. The union also represents employees in the metals, mining, paper, rubber, glass, auto supply and various service industries, along with the public sector. Other unions, including the National Football League Players Association, voiced their support for this winter's refinery strike.