Refinery workers on brink of strike

January 31, 2009 10:11:28 PM PST
There's a possible strike by refinery workers, and the move could affect how businesses operate here in Houston. [SIGN UP: Get headlines and breaking news sent to you]

The dispute is over pay and several oil companies are trying to hammer out a deal with the workers. However, there's a brief reprieve and the companies are also looking at their backup plans.

It came down to the wire. With the existing labor contract within hours of expiring, we got word Saturday of progress. The contract has been extended for 24 hours, which means 4,000 refinery workers will not go on strike just yet, but even if they did, one industry analyst says you wouldn't notice.

It sounds like a big deal and for those who work at Houston-area refiners, it is. But what about the millions of others who don't, but read these kinds of headlines and think about what will happen at the pump?

Around 4,000 union workers here are preparing to head to the picket line if they can't hammer out a deal. The industry is working on its fourth offer. Union negotiators want higher pay and better medical benefits. But in these gloomy economic times, some question why the union is going to such an extreme.

"You'd think they'd want to do everything possible to protect their jobs," said Houston energy analyst Barbara Shook.

Especially since the refiners already have backup plans. Quoting from Shell: "We are prepared to bring in replacement workers in order to maintain operations."

Valero and Exxon Mobil will turn to a contingency work force as well.

"They should be concerned that those jobs might not be available once any kind of labor dispute is over," said Shook.

And they may not have consumers for support. While the headlines look scary, the effect at the pump may not be.

"It shouldn't have any effect on the supply of gasoline," Shook said.

People aren't driving as much. There is ample supply. Houston's economy could feel a small impact if 4,000 workers aren't spending money, but Shook doesn't see this as urgent, not even in the long run.

"Should it go on for a long period of time, we could have some blips," she said "I wouldn't say it would have a significant impact."

Some analysts say since the overall demand for gasoline is down, a strike may be doing the industry a favor, giving companies an excuse to close temporarily some facilities. Valero has said it will close one in Delaware and another in Tennessee should worker strike. Discussions are ongoing.

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