This page has been archived and commenting is disabled.
10% Of US Refining Capacity Offline After US Oil Workers Stage Largest National Strike Since 1980
It's not exactly the same as if Wall Street were to unionize and demand higher wages, but when US energy workers - supposedly the best paid profession away from those who BTFD or BTFATH for a living - go on strike, it is time to pay attention, which is precisely what happened yesterday afternoon, when US union leaders launched a large-scale strike at nine refineries after failing to agree on a new national contract with major oil companies. It marks the first nationwide walkout since 1980 and impacts plants that together account for more than 10% of US refining capacity. The United Steelworkers Union (USW) began the strike on Sunday, after their current contract expired and no deal was reached despite five proposals.
As quoted by the BBC, USW International Vice President of Administration Tom Conway said in a statement that it "had no choice. This industry is the richest in the world and can afford to make the changes we offered in bargaining,"

Of course this is precisely what Saudi Arabia was hoping for, because unless crude prices soar, these "rich" energy companies will have no choice but to engage in pink-slipping many of these workers in the coming months, leading to a permanent mothballing of numerous facilities around the US, which in turn will dramatically reduce supply, finally leading to an organic increase in oil prices. Just as the Saudis had envisioned, however at a cost of hundreds of thousands of best-paid US jobs.
More:
"The problem is that oil companies are too greedy to make a positive change in the workplace and they continue to value production and profit over health and safety, workers and the community."
Royal Dutch Shell, the lead industry negotiator, said it "hopes to resume negotiations as early as possible".
The move comes at a tough time for oil companies, which have been cutting costs and reining in spending following a collapse in crude prices.
A large part of this is due to an increase in oil volumes extracted from shale formations, adding to a global supply glut.
USW said it represents workers at 65 US refineries that produce approximately 64% of the oil in the US.
The union has been renegotiating a three-year national contract since 21 January. The latest offer was the fifth proposal rejected by the union.
It wants to double the size of the annual pay increases from the previous agreement, increased healthcare coverage and reduced use of non-union contract workers.
Good luck with those wage hike demands at a time when the majors are crushing executive management by halting stock buybacks.
Here are some more details on the strike from Bloomberg:
United Steelworkers union continues strike at 7 oil refineries and 2 other sites that began Sunday after failing to agree on labor contract renewal. Co. contingency plans in effect to keep most plants running. Union ready for more talks w/ lead co. negotiator Shell this wk.
Strike includes Lyondell, Marathon, Shell, Tesoro plants; full list below (co; location; b/d refining capacity)
- LYB; Houston, Tx.; 264k
- MPC; Galveston Bay, Tx.; 451k
- MPC; Houston Green cogeneration plant in Texas; n/a
- MPC; Catlettsburg, Ky. 242k
- Shell; Deer Park, Tx.; 327k
- Shell; Deer Park Chemical Plant, Tx.; n/a
- TSO; Anacortes, Wash.; 120k
- TSO; Golden Eagle, Martinez, Ca.; 166k; plant shutting
- TSO; Carson, Ca.; 251k
Combined capacity for 7 refineries listed above ~1.8m b/d, or ~10% of U.S. operable capacity, according to data compiled by Bloomberg
More U.S. refineries standing by to join those already on strike
Strike note rescinded at TSO’s Mandan, N.D. refinery (70k b/d)
Local USW at BP Whiting agreed to rolling 24-hr extension
Some cos. yday said operations normal at refineries affected by USW notice, including: Shell Deer Park, Exxon Beaumont, LyondellBasell Houston
* * *
Expect more sudden and dramatic short squeeze in oil today as this information trickles down through the momentum-igniting algos that, much more than actual supply and demand, determine the price of the black gold.
- 13600 reads
- Printer-friendly version
- Send to friend
- advertisements -


Well this should send gasoline higher; cough, cough...
Fuck um, which begs the question, are yeast smarter than humans?
I demand $3000 for my Bitcoins.....if I don't get it....I'll go on strike.
Why not an even THREE BILLION DOLLARS!!!!
Well you can't raise 3 billion, you can spend 3 billion, but you can only raise 3 million, so taking into account the leverage ratio she has 300 to 1 in her odds should the 3 bills not be raised. You on the other hand are 1 to 10 upside down if your horse don't finish and pay, which is the bet I took.
They'll bring in more refined gasoline from overseas. They've been doing it for years. Now they'll do more.
It's a futile effort to strike when the economy is in a deflationary implosion now.
Reminds me of the strikers in, "When Money Dies." The larger unions got paid in rapidly depreciating currency as hyperinflation sunk in, while isolated professionals [engineers, doctors, lawyers, etc] were pretty much screwed since they had no bargaining power. The Gubmnint unions did the best [such as railroad workers who simply went on strike and paralyzed the nation if they were not paid] ... next to industry leaders who were poaid for their goods qwith overseas [strong] currencies. of course, those with gold, solver an dsome other hard assets faired pretty well also:
When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany Paperback –http://www.amazon.com/When-Money-Dies-Devaluation-Hyperinflation/dp/1586...
What, the industry is choking to death? In that case I DEMAND to have my pay doubled or else!
What are you gonna do, FIRE me???
Well, this should help lower production a bit...
I've worked in a few refineries in a previous life when i had a career and a very decent paycheck.
You couldn't pay me enough to make a career of what the refinery personnel do for a living.
Like steel, much is being replaced by automation and outsourcing, and the union is just as lame as every where else.
Never the less to look at the huge amount of domestic refining capacity awe inspiring, despite the fact that new refineries are a NIMBY issue. New ones would be so much more efficient in many ways to operate.
This pathological fear of building new manufacturing capacity in any feild is certainly a factor in America's decline.
The most basic human right. Withhold your bitcoin from the market if you don't get your price.
Yeast ARE smarter than humans, because yeast create alcohol, knowing that humans love alcohol so much that, to get it, we will lovingly cultivate huge quantities of yeast wherever we go. We think aliens will come here to enslave us, or to get our water, but actually aliens will come here because their own yeast FORCES them to, to come here and learn from our genius in creating the widest variety of yeast-cultivation techniques in the galaxy. Thus will aliens worship us, as one might worship Rembrandt, Tolstoy, Mozart, or Benjamin Graham, and thus will Earth become a super major tourist stop for all space-travelling species throughout the galaxy. Behold... the Yeast Age approacheth. :0)
they might not be in the best bargaining position right now.
are these guys entirely clueless? they can fill up the tank for less than $2/gal yet they can't associate that with a depression in their industrty?
I havent had a pay raise in 3 years. And I am not dumb enough to ask for one atm
and what do refinery workers even do when there arent shut downs? turn a valve here and there?!?!
perhaps they should speak to mcdonald's kiosk worker about what happens when you raise the price of manual labour too much. hint: (starts with the letter A).
DOUBLE the size of the annual pay increases from the previous agreement, increased healthcare coverage (WHAT THEY DONT LIKE OBAMACARE) and reduced use of non-union contract workers ELIMINATE THE COMPETITION.
Unrealistiic in boom times but now with layoffs coming.....who the hell is their leader.
Stupidest.Time.Ever. for such a strike. Morons!!
Sounds desperate. They should have really shot for 15% to 20% though. Sounds like some "sentiment strikes" need to be announced tomorrow.......
Go workers!
Go real markets!
What a novel concept, real markets....
Back to your soap opera.
Time for Dear Leader Obama to, once again, bring in more ILLEGAL "workers" to replace these union people. Go Dear Leader Obama union buster!
</s sort of>
Go away workers! There, fixed it for ya.
Yes, go and start your own business so you may pay as you please...
btw 10% of production in a glut won't be noticed but at least you'll get your strike stipened while your layed off.
That should increase the price of fuel but decrease the price of crude oil. But I am sure that our pseudo-efficient markets (algos) are nor smart enough to figure this distinction out.
Aren't most of the refineries going through phased shutdowns around now anyway because they're reconfiguring from heating oil to gasoline refining?
Correct me if I'm wrong.
not "most" refineries. Some do shut down for product mix changes; gasoline has Winter blend vrs Summer blends which they will start producing in a month or so. there is also the diesel, aviation and retail gas product choices producers must decide. Finally, depends upon the location of the refinery; the plants being struck probably produce gasoline 100% for 12 months straight through.
NoVa
"gasoline has Winter blend vrs Summer blends..."
The difference is that the summer blend is cut with butane which is still cheaper than gas.
To your point, the switch doesn't take long and seems irrelevent to me. What DOES matter is the plummeted(ing) oil price. How do they expect to get water out of a rock?
Thanks for the clarification.
The main point that I was trying to uncover, is that there is, in fact, a swithchover period [which nobody ever really hears about because when gasoline is $3.50 a gallon, nobody wants to hear about refineries going offline]...
Instead now, it's played out like a national crisis [probably just as a 'mouthpiece' effort to stop the free fall of crude, if even for only a few seconds]. Clever to come out on a Monday morning no? Day after SuperBowl?
"plants being struck probably produce gasoline 100% for 12 months straight through"
Where did you gleen that particular nugget? You have no idea regarding what the strikers produce and you know it. They were just as likely to be layed off so a strike puts extra cash in their pockets for now.
Like the closing line... It's time we see some pain for those creating the pricing disconnect from supply and demand fundamentals.
...because somehow reducing refinery capacity stops the shale producers from pumping crude? If anything, an even larger backlog of crude will occur. The front side, gas and other distillates may rise in price ( sorry consumer), but there is no reason for crude to rise in price. This isnt a rig worker strike.
Rig Pigs are not unionized, but trust me, they are hurting with rig counts being as low as they are today...
Funny thing about crude is that if you leave it be in a cool place it keeps forever, so pumping while labor is slack is cheaper so long as you have a place for it. Any commodity that keeps can be produced at times of cheap labor and sold off later when the price is up. This only screws the small producer and works to the benefit of RDS and Exxon sized companies.
This would be a golden opportunity for big oil to shit can what's left of the union workers and replace them with illeagle aliens.
Sorry, I meant newly minted democrap freeloading voters!
Replace refinery workers you say?
That'll work.
Plant failures in .... 3 .... 2 .... 1 .....
Countdowns are usually followed by explosions.
I really hope this gets the party started. We'll see how many of Obama's Union Scum sign up for EBT cards. Time to burn it down!!!!!
Long UWTI for the whole week, maybe longer. I expect a nice short squeeze and a close over $50. Then the fun really begins. UWTI could be a ten bagger IF........ oil has bottomed now.
RECOVERY!!!!!
It is hard to tell from the news what the real issues are. I know it is not about money. As a former oil worker and former member of the Steelworkers I know the key issue which leads to strike is never the money.
Going on strike is a tough business and union members don't authorize one lightly.
"not about money"
I'm sure they want better coffee in the break room. It's always about the money with price-fixing cartels like unions.
It is until the company falls and the union has to pick up the pieces, oh they have fun for a while, but in the end they are unemployed and seeking new work.
Can the down voter please explain how unions do not meet the definition of a cartel?
C'mon, the second you were told "it's not about the money" we diverged from reality.
definitely not about the mnoney ... probaly they want a longer tea time with scones and real jam ....
"not about money"
Come again?
Are the oil workers employing shills already?
From TFA. It's about money and wrecking competition. Like any good cartel does.
Let me guess, the teachers union only cares about what's best for the children.
That's "chilluns", now say ot with feeling...like you really care.
I know one of the heads of one of the teacher's unions around here. While I will say that unions out here are very different than those back east, she does care about the children. The problem is that she's batshit fucking insane and thinks that if you put unicorns in the classrooms, students would magically get smarter.
Bwaaaaaaahaaaaaaahaaaaaaahaaaaaaa..
Oops, I really meant to say this:
Bwaaaaaaahaaaaaaahaaaaaaahaaaaaaa..
I would bet it is hard to strike when the general trend in your industry is down down down.
This would seem to play into the Saudis hands and also allow non union shops to gain over union ones.
But I am not an expert on this stuff.
The United Steel worker's Union, killing jobs one strike at a time.
The United Steel worker's Union, killing jobs one strike at a time.
But they'll be so happy in their new occupation(s) administering to a for profit penitentiary of his/her choice carrying a side arm... Or making ordnance for moar wars in the Middle East and Eastern Europe... Or being a well paid merc pill head with his "nose in it" on the front-line of his government's choosing CONUS/OCONUS?!!!! remember the battlefield in the war on terror has no boundaries now!!!
From the "Chimp-in-Chief"
Life's a journey... Not a destination! Unless of course you die in one of those three occupation(s) just described which has a very low retention rate and probability of survival the moar they are done!
Wow Mercs get all the pills they want. That makes sense.
Why go to war if you don't have your own pharmacist.
Strike note rescinded in Mandan, ND, eh?
Must be because there would be so many scabs crossing the picket lines, those high paid arrogant union guys would quickly be out of a job.
There's no doubt many out-of-work oil workers up that way who would love to get a ride on that union gravy train.
ROTFLMAO. The smallest voilin in the world is playing for you! Spot the problem word in this sentence:
"when US union leaders launched a large-scale strike at nine refineries"
Screw 'em Exxon, next time build your refinery here in SC. We don't have, like, or want unions here.
Love this one too:
This industry is the richest in the world and can afford to make the changes we offered in bargaining,"
Now that's a peach as well! If it weren't for all those rich people.....
Fuck the "oil workers"!
They have it comin just like the rest of us!!!
It's 10% of US capacity. What has US consumption been doing the last few years? (Yes, lately it might be up a bit)
I can't say I'm too worried about 10% capacity offline. If it gets to 25%, wake me up.
And...
Distillates have already been approved for export and that is happening. One more stroke of the pen and heavier stuff (crude) will be allowed for export as well. Then it's "too bad so sad, refinery workers, we just couldn't afford you so we sent our lobbyists to work and got the OK to export all the black stuff we want."
And the rest is employment rate and industrial decline history...
Back to killin snakes.
And there you have it MG...the real reason that the oil industry wants the export ban lifted...more wage arbitrage.
ZH - 'Blah blah blah, banksters sucks, gov't sucks, middle class is dying'
ZH - 'Unions sucks, and are greedy'
pretty much
Your understanding of topics is vast and superior, but finish your Captin Crunch before adding any more silly talk.
Let me guess, you're one of those fools that thinks there's a good guy out there.
You got it. We don't like cartels no matter who they represent.
you see, energy companies don't pay these guys. People who have productive activities to get to do. The toothfairy can't give you everything you want.
I'M self employed if I want more money, I have to work my ass off. I can't just run around in a circle jerk screaming.
The circle jerk seems to be working for MeBizarro...for now!
Heheheheh - Our bolshevik tactics work century long. We control unions and news media. We blame union for high price gasoline and you believe it. Gasoline to go very high while oil still low. Goyim are cattle never learn.
Union negotiator sticking to his guns, regardless of labor demand. Raises and better health care period, nevermind revenue. The mindset of a true bureaucrat.
The mindset of a true communist
Hope they all get laid off and the plants closed.
They will! Keep an eye on the lifting of export bans. Ask yourself this: why would the largest IMPORTER of liquid fuels on the globe have an oil export ban AND why are the oil companies fighting furiously right now to get the ban lifted? Simple, so they can export these morons' jobs to South America.
You Americans surprise me. You hate Unions and are happy to work for Peanuts, let the 1% and the fat Bankers make all the profit from your hard work. You like serfdom that much and take all the crap you get handed, but are clad that Unions are dead. They could mybe get you a living Wage? But thats not good enough. Well, stay happy for the screwing you are getting. It is the Workers who make everything, not those fat Bankers and the Overlords, so make sure you get a fair pay for your work. Workers who stand Shoulder to Shoulder can be the winners as history has shown, but those brainwashed never get anywhere but down into the Gutter.
How are they the winners. We have shutdown 50,000 manufacturing plants since I graduated. When they get above market wages the crap I buy goes up. Every dine these guys get comes out of the pockets of everyone else.
Do you believe that wages come from profits and not revenue? The largest shareholder of energy stocks is retirement accounts. Unions aren't screwing the rich they screw the consumer. Turning a wrench isn't worth $150,000. If they demand $150,000 the job will be sent somewhere else.
Is Blankfein worth $16 million a year? His "productivity" is government bailouts and fleecing muppets.
That's why many Zero Hedgers are a joke. They get all worked up over union workers, when unions hardly make up any of the work force anymore, yet CEOs make millions and receive golden parachutes for running companies into the ground and Zero Hedgers talk about mythical markets and invisible hands and other economic theories that no longer pan out in the Information Age.
When the little guys ask for peanuts its so bad, when fast food workers ask for enough wages to pay for a bus ticket and monthly rent on a ghetto studio apartment, oh that's market intervention, can't have that. When fat cats live it up, than they are "innovators" because they got these bizarre views from Ayn Rand, when Rand herself never ran a business in her life. The irony is that Greenspan is her biggest protege yet ZHers constantly attack Greenspan even though his entire ideology is Randian. Then they take Randian's warped economic views and marry it with right-wing Christianity when Jesus in his own quotes despised the rich and advocated helping the poor. Doublethink is quite popular around here, which is what I learned the most from this site.
Yeah, too much Binary thinking. It is either good or bad.
- US people lost the ability to think in gray shades
- And when it comes to War over 1000 miles from the USA, Drone Strikes, Rendition, Torture, spending a $1 Trillion on endless wars heading to $4 Trillion... they think the end justifies the means... just like Police State Powers
Let me recommend that you spread the good news about unions in your own country. Extoll all of their virtues and all the benefits that they bequeath upon you...let the unions gain strength and prosper in your country, and by all means, we hope that they squeeze every thin dime out of the evil corporations that they fight against....in your friggen country.
The unions are just a branch of government; the unions feed the government and the government feeds the union. They invented '69'.
You <insert nationality here> surprise me, you chime in on the topic of unions with no real perspective. Unions dont naturally equate to higher wages, period end of story. Unions for all!!!
The ONLY guarantee when it comes to US Unions is that your paycheck will be smaller...VOLUNTARILY!
Here's a very simple example for you.
Shit Shoveler's United; great for shovelers, bad for shitters.
Most of us shit, few of us shovel; therefore it's mostly bad.
And inside what nation of you're-also-getting-screwed do YOU reside, pray tell?
How convenient for the refiners that the Unions declared a strike in the midst of an oil crash where they needed to cut production.
Good point.
Those union bosses must have to perform a delicate balancing act in an effort to maintain legitimacy.
Give the fat cats the opportunity to squeeze the market, while convincing the workers that they can negotiate for a better pay package.
Win-Win
Sure, but it would seem that they're cutting production at the wrong point in the chain. I say seem, because this kind of shit never plays out how one would expect, but on the face of it, it is the crude production that needs to be cut. If crude is still pumping full tilt but refining gets cut, then glut of crude gets even bigger.
The "glut" gets bigger but the price will skyrocket due to steady demand and a lack of supply FROM the refineries into the market.
Fire them immediately. There's plenty of men out there in need of work.
I appreciate the article, but information explaining what double the annual pay increases would be nice, and maybe the average pay of refinery workers would be nice as well. Maybe even the amount of DemPerv campaign contributions in the last cycle would add clarity to the great case for the 'workers' demands.
Organized crime syndicates (unions) are at it again.
"Hey! Mr. business man. You should have some more insurance in case something bad should happen - like a strike."
A major campaign funding organization of the democrat party (unions) are in need of more cash in preparation for the 2016 election cycle.
"The problem is that oil companies are too greedy to make a positive change in the workplace and they continue to value production and profit over health and safety, workers and the community."
Too greedy? Buddy, they handed you and everyone else on the lower rungs a short straw when they gave you the employee benefits manual. Nothing new here, please keep walking.
USW VP quote from the article: "This industry is the richest in the world and can afford to make the changes we offered in bargaining,"
Why is it that when a business does well, the unions claim it's UNFAIR not to to give them a bigger piece. But when a business does poorly, unions insist on maintaining what they "negotiated" when it was doing well?
Talk to the GE workers in 2011. GE paid no taxes in 2010, got a 3.2 billion tax credit and still wanted unions to give up pensions and hold wages.
Years ago I remember Zenith employes taking wage and benefits cuts to 'save their jobs'. Company went to Mexico right after the agreement.
It isn't unusual for unions to stop wage increases if their company is in real trouble,,, problem is most of the companies were not in real trouble, only wanted to bump up profits locally before moving to China.
No worries Shack shak is hiring.
Hardly a peep about public/gov unions.
So I ask the question... If unions are as bad as posters here are making them how is it that about every part of gov is unionized?
One poster complained how high wages due to unions sucked the money out of everybody,,, He didn't mention public unions that suck money from everyone and everything.
Many here seem upset at even the mere mention of decent wages, working conditions, and other benefits many true unions provide. It seems they want everyone working 19th century coal miners style.For some unexplainable reason most think all one has to do is demand the wage they want and the employer will grant it.
Sorry, doesn't work that way. Corporations with US Gov assistance shipped off all the skilled decent paying jobs. The ones left behind are taken by H1B visa programs,,, again with the help of your government. Anything left is now going to the 'undocumented immigrants' due to gov not controlling the border (on purpose) with the scraps even the illegals don't want going to tax paying citizens. See a trend here?
Tell you what, If these people can get a decent wage out of the refiners I'll pay the extra dime at the pump,,, heck no one complains about the .67 cents California charges its citizens per gallon of gas except California,,, saying it isn't enough.We took the Obama care tax without too much of a whimper. We haven't massively complained about the governments QE inflation,,, in fact most have welcomed it. The Central Bank itself sets a 2% inflation rate,,, that'd be 2% less for the mundanes each year with no complaint.
Yet, let some group pool together and ask for a wage increase and it's Katy Bar the door.
Quote "
Hardly a peep about public/gov unions.
So I ask the question... If unions are as bad as posters here are making them how is it that about every part of gov is unionized?" Unqote
The problem with Public sector unions is they negotiate with temporary beurocrats, that are replaced on a regular basis. That way, noone is ever responsible for the screwing the public. Most cities and towns in the US are in a bad spot financially due to crazy wages and benefits packages given to public sector unions. Until people figure this out, we are all screwed! I have no problem with private sector unions, except when they use the govt. to corner the market. Which is what most do, try to be a non-union electrician and win a bid on a govt job. Not going to happen.
Companies cut back when business declines, govt just raises taxes. Businesses would really like to just force customers to buy at the new inflated price, when business takes a downturn.
Unions were a good thing when safety was a concern. Shouldn't have to worry about getting killed constructing a building. But enough with the pay BS, and if I see the 5 day workweek shit again.... Become valuable so you can negotiate with your employer, or take what they give you. I would pay any employee the minimum I could get away with while keeping the employee. So why should businesses be any different?
oh my! those pesky communist?
<Ps. the largest union in america is the ubiquitous ussa government>
surprised?!?
striking oil workers who want to keep endangering humanity-sustaining ecosystems...
did i miss something?!
Who has even heard of these guys;
- Either they are toothless
- Or they are completely owned by the Industry
- Timing is great for Oil Industry as a whole
- Money is power, Looks like the fix is in