The possibility of union workers at local refineries going on strike was laid to rest Tuesday afternoon after the United Steelworkers Union and Shell Oil Co. agreed to a basic contract for U.S. refineries, averting a possible nationwide strike by 30,000 workers.
Members of local unions threatened to strike if new contract negotiations regarding pay and other benefits were not agreed upon.
The new agreement came days after the current contract was temporarily extended past its Sunday expiration to continue negotiations.
Hourly workers represented by the United Steelworkers Union will get a 3 percent per-year pay increase for each of the three years of the contract and have 20 percent of their health care costs paid.
Bloomberg.com reports indicated that the United Steelworkers union had rejected three contract offers from Royal Dutch Shell, setting the stage for a strike at refineries that process about two-thirds of the country’s oil, which means that 1,500 refinery workers in the New Orleans area would have been part of the country-wide walkout.
Louis Robein, an attorney representing United Steelworkers Local 750, said in a statement that a strike would have affected production and maintenance workers at Motiva Norco Refinery, the nearby Shell Chemical-Norco plant, the Motiva refinery in Convent and possibly the Exxon Mobil refinery in Chalmette.
“Negotiations over wages, hours and working conditions have been intense for the past two weeks,” Robein said.
The previous contract between Royal Dutch Shell and the union was first drafted in 2002, was extended in 2005 and had expired as of Feb. 1.
Local refineries made contingency operating plans in case they didn’t reach a deal with the union for a new contract.
Kevin Thompson, a spokesperson for the Motiva refinery, said in a statement that strikes were not expected to shutter refineries, but may have reduced their output. He also pointed out that companies were expected to ask managers and non-union workers to pitch in if their was a walkout.
Bloomberg reported that the union was seeking a “substantial wage increase” with a cost-of-living adjustment for workers at refineries. Other issues included fully-paid health care coverage and health and safety improvements.
Financial analysts say that a strike could have possibly effected gasoline prices. The average price per gallon of gas in the New Orleans area was $1.74 on Monday, according to AAA’s daily gas gauge report.
“This is a contract that the market needed to take seriously, because the impact of a strike is potentially extreme,” Tim Evans, an energy analyst, told Bloomberg.