Hundreds of Chevron workers in California went on strike Monday after the company and the United Steelworkers union failed to reach a contract agreement.
More than 500 workers at a refinery producing gasoline, diesel and jet fuel and lubricating oils in the San Francisco Bay Area city of Richmond began striking at 12.01am, the union said in an email. Workers recently voted down a contract offer from Chevron, and the company refused to return to the bargaining table.
Refinery operations will continue as normal, Chevron said. But if the strike were to halt operations at the refinery, that could negatively affect fuel prices in California, which already has the highest gas prices in the US at $5.86 a gallon, according to the American Automobile Association.
“It would be coming at a very unfortunate time because we already have a shortage of refinery capacity in California right now, and so losing even one or two percent of the state’s refinery capacity would probably result in a noticeable increase in gasoline prices,” Severin Borenstein, a UC Berkeley professor, told KTVU.
Gas prices in the Golden State have continued to rise, even as they’ve started to fall elsewhere in the US. Lawmakers are calling for a $400 rebate for every taxpayer to help alleviate the burden of high prices at the pumps.
Chevron, which is based in San Ramon, California, has said it does not expect the strike to cause any supply chain issues and told KTVU it would bring in trained workers to replace those on strike.
In a statement on Sunday, Chevron said it has negotiated with the union for months, and believes the contract it offered was fair and addressed union concerns.
The union said it had negotiated a national agreement for oil workers on wages and working conditions, but about 200 individual bargaining units still had to negotiate local issues.
USW Local 5 representative B.K. White, a refinery operator who has worked for the company for 29 years, said Chevron failed to address worker fatigue and a lack of staffing.
“If we had more people and could get a better pay rate, maybe our members wouldn’t feel obligated to come in and work as many as 70 hours a week to make ends meet. We don’t believe that is safe,” White said.
Chevron said that in Richmond, “the union’s demands exceeded what the company believes to be reasonable and moved beyond what was agreed to as part of the national pattern bargaining agreement.”
The old contract with Chevron in Richmond expired 1 February and workers had been reporting to their jobs on a rolling 24-hour extension, the union said.
The company offered a 2.5% pay increase, but the union had asked for 5% to keep up with inflation and cost of living in the Bay Area, White said.
“It’s rough for the blue-collar worker in the Bay Area, and we asked for a 5% bump to help us out a little bit with our medical at Kaiser, which went up 23% last year,” White said.
White said the company has already brought in about 100 replacement workers who are not trained to run the plants.
“This is at the detriment of the city of Richmond and the environment,” he said.
The company said it brought in qualified replacements starting with Sunday’s night shift.
“The employees who are operating the refinery during the strike have satisfied the necessary requirements to perform their designated jobs (including receiving on-the-job training from experienced employees/operators) so that the refinery will be operated safely and in compliance with all applicable laws,” Chevron spokesperson Tyler Kruzich said in an email.
If the strike were to shut down the refinery, that could negatively affect gasoline prices in California – which has the highest regular gas price in the nation at $5.86 per gallon, according to the American Automobile Association.
However, Ken Medlock, director of the Center for Energy Studies at Rice University’s Baker Institute, said it is highly unlikely the strike would lead Chevron to shut down operations or raise prices.
“It is more likely that the refinery will run with a skeleton crew’ until the labor contract issues can be resolved,” Medlock said in an email.
“California prices are already higher than other states due to the unique blend that must be sold in the state that limits arbitrage of imported gasoline from other regions, so there is ample incentive to keep the refinery running,” he added.
The old contract with Chevron in Richmond expired Feb. 1, and workers had been reporting to their jobs on a rolling 24-hour extension, the union said.
The San Ramon, California-based Chevron said on its website that the refinery employs 1,300 workers. The union represents about 600 employees who include machinists, pipefitters, lab technicians and warehouse workers, White said.
The refinery is one of largest in the state and processes about 240,000 barrels of crude oil a day to make gasoline, diesel and jet fuel and lubricating oils, products that are sold mainly in California.
Chevron said in a statement it is “fully prepared to continue normal operations” despite the strike.
“We anticipate no issues in maintaining a reliable supply of products to the market,” it said.