The United Steelworkers union (USW) has added two more sites to the number of oil refineries where its members have gone on strike, citing bad-faith bargaining by the companies and even threats against employees.
The strike, which began Feb. 1, originally targeted nine refineries responsible for 13 percent of refining capacity in the United States and employing about 4,000 union workers. On Feb. 8 the USW added two more, BP's (NYSE:BP) facility in Whiting, Ind., and the refinery it runs together with Husky energy in Toledo, Ohio, which together have an additional 1,440 member of the USW.
The union represents 30,000 hourly workers at more than 200 US oil refineries, terminals, pipelines and at chemical plants from California to Kentucky. It called the limited strike, saying Royal Dutch Shell (NYSE:RDS-A)(NYSE:RDS-B), negotiating on behalf of several oil companies, walked away from the talks on safety and health benefits for its members.
The USW issued a statement on Feb. 7 saying it was expanding the strike because Shell had been engaging in "bad-faith bargaining over mandatory subjects" including safety and health benefits, and accused the company of "undue delays in providing information; impeded bargaining; and threats issued to workers if they joined the strike."
A BP spokesman told the Associated Press that the company plans to maintain operations with replacement workers and doesn't expect a tangible effect on production. Refineries today are more automated than ever and as a result are easier to operate, albeit a bit more slowly, during a strike than they were during the last nationwide walkout in 1980.
That could keep gasoline prices from jumping because there won't be a significant decline in oil refining, as occurred during the strike 35 years ago. "Generally production is not affected by these work stoppages," Tom Kloza, the senior oil analyst at the Oil Price Information Service, told the AP.
Yet Kloza conceded that "prices can go up because of the perception" of a gasoline shortage. He noted that wholesale gasoline prices on the West Coast have risen by about 65 cents per gallon in the past three weeks. Yet Kloza attributed this at least in part to maintenance shutdowns and normal seasonal price trends. He noted that the peak driving season is fast approaching.
As for the negotiations, USW International President Leo W. Gerard said that the oil industry has ignored for too long many health and safety issues. "Management cannot continue to resist allowing workers a stronger voice on issues that could very well make the difference between life and death for too many of them," he said.
Union officials also stressed that wages were not a part of the negotiations, as had been widely reported when the strike began. Chad Culbertson, president of the USW local in Toledo, noted that the employees already are paid about $30 per hour.
On its Facebook page, the Toledo local reported that 138 USW oil workers were killed on the job in 2012, the latest year for which such statistics are available, "more than double that of 2009."
"This [strike] is about smart, hard-working men and women being able to go home at the end of the day the same way they went in," the local said in its Facebook posting.
By Andy Tully of Oilprice.com. Oilprice has no position in any stocks mentioned. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.