Union cause, union effect

The first nationwide strike of US refinery workers since 1980 is in its early days since beginning in the wee hours of 1 February. That’s when negotiators with the United Steelworkers (USW) union gave the word that they had been unable to reach an agreement with lead refining negotiator Shell, and told its members not to report to their facilities, where many of them work 12-hour shifts.

Union workers at nine refinery sites and two associated facilities representing about 10pc of US refining capacity are on strike

US independent refiner Tesoro has idled a northern California refinery already under maintenance but has not otherwise disrupted operations, according to companies involved. Refiners use supervisors and contractors to fill in for striking union workers.

It’s too soon to tell how the strikes will affect refiners’ plans to perform spring turnarounds at their facilities to rig them to maximize gasoline output ahead of peak US summer driving season.

Refiners are prepared to run their facilities with management replacements but may prefer to have daily operators on hand for turnaround work to monitor changes to the unit and assist, Turner, Mason & Company executive vice president John Auers said.

“Even at an operating refinery, I think there’s sufficient knowledge and experience in place to operate the facility,” Auers said.

There’s plenty of precedent for the idea that refiners can keep the doors open and the products flowing without the union workforce. Husky’s refinery in Lima, Ohio, ran for four months in 2012 until United Steelworkers asked to return to their jobs in October with their demands unmet.

Such assurances may not keep markets calm, however.

Yesterday US jet fuel markets ignored the downward pressure on fuel demand that normally comes with heavy storms after bad weather cancelled more than 5,000 flights on 2 February. Prices climbed at New York Harbor and Chicago, never mind that there were no signs of imminent supply tightness. Just the worry that the strikes might crimp supply was enough to spur some buying.

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