Citing dangerous conditions, including leaks and explosions, and asking for pay increases, the United Steelworkers Union (USW) called for its largest national strike of oil workers since 1980 on Sunday after talks broke down with Shell Oil, which is leading the industry-wide bargaining effort. After nearly two weeks of negotiations, USW asked about 3,800 workers at nine refineries to walk out after their previous contract expired in what represents about 10 percent of U.S. refining capacity.
The strike comes at an already tumultuous time as plummeting oil prices have given rise to a heated debate over the future of an industry that relies on extracting cheap and plentiful resources from the ground. This precipitous drop in crude oil prices by over 60 percent since June has caused companies to lay off workers and delay plans for expansion; what they see as the most painless means of avoiding profit cuts.
Meanwhile, on Monday ExxonMobil reported fourth quarter profits that topped expectations, with CEO Rex Tillerson saying the results show the value of the industry’s “proven business model that integrates upstream, downstream, and chemical businesses.”
The workers in the industry clearly have some issues with the existing business model and their place in it. USW International Vice President Gary Beevers, head of the union’s National Oil Bargaining Program, stated that Shell has refused to continue bargaining toward a fair agreement.
“This work stoppage is about onerous overtime; unsafe staffing levels; dangerous conditions the industry continues to ignore; the daily occurrences of fires, emissions, leaks and explosions that threaten local communities without the industry doing much about it,” said Beevers, who also cited “flagrant contracting” as having a negative impact on health and safety.
USW represents about 30,000 workers at more than 200 refineries, terminals, and pipelines across the country. A full USW strike could disrupt as much as 64 percent of U.S. fuel output, according to Bloomberg. Right now the USW is negotiating for a new national contract at 63 plants. More walkouts could be in order as previous negotiating impasses have lasted months.
“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,” said USW International Vice President of Administration Tom Conway in a statement.
While falling crude oil prices can derail producers, they can actually benefit refineries that process the oil. According to the Wall Street Journal, while refiners are concerned with their profit margins, “companies have reported stronger than expected fourth-quarter profits.”
For its part, Shell remains committed to “resolving our differences” and resuming negotiations as soon as possible, according to spokesman Ray Fisher.
Putting aside the lopsided distribution of wealth within the industry, for striking workers it’s not all about sharing more in the profit.
“It’s not the money,” said Joel Clay, a long-time accident investigator at a refinery in Texas. “It’s all about working safely.”
In January there were at least four major mishaps at a U.S. pipelines that resulted in costly explosions or spills. In 2013, Texas led the country in oil and gas sector fatalities with 106. Overall, oil and gas workers are six times more likely to die on the job than average Americans.
With the recent growth of the industry due to the proliferation of new drilling techniques such as fracking, safety measures can suffer. In North Dakota, which has been at the forefront of the oil boom, the fatality rate for industry workers was three times the national average in 2013. According to Collins & Collins, P.C., the most common causes for oil and gas accidents include failure to provide proper training to new employees and failure to properly implement and update safety procedures.