hundreds of chevron Workers in California went on strike on Monday after the company and the United Steelworkers’ Union failed to reach a contract agreement.
The union said in an email that more than 500 workers at a refinery that produces gasoline, diesel, jet fuel and lubricants in Richmond, San Francisco Bay Area, began their strike at 12.01 a.m. Workers recently voted to reject a contract offer from Chevron, and the company refused to come back to the negotiating table.
Chevron said refinery operations would continue as usual. But if the strike halts operations at the refinery, it could negatively affect fuel prices in California, which already has the highest gas prices in the United States at $5.86 a gallon, according to the American Automobile Association.
“It would be at a very unfortunate time because we already have a shortage of refining capacity in California right now, so a loss of one or two percent of the state’s refining capacity is likely to lead to a significant increase in gasoline prices,” Severin Bornstein, a University of California in Berkeley KTVU.
Gas prices in the Golden State continued to rise, even as they began to decline elsewhere in the United States. Lawmakers are demanding a $400 deduction per taxpayer to help ease the burden of price hikes at pumps.
Chevron, which is headquartered in San Ramon, California, said it did not expect the strike to cause any supply chain problems, and told KTVU it would bring in trained workers to replace the strikers.
Chevron said in a statement Sunday that 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 negotiating units still had to negotiate local issues.
USW Local 5 representative BK White, a refinery operator who has worked at the company for 29 years, said Chevron has failed to address worker fatigue and staff shortages.
“If we had more people and could get a better pay rate, our members probably wouldn’t feel obligated to come in and work up to 70 hours a week to make ends meet. We don’t think it’s safe,” White said.
Chevron said that in Richmond, the union’s “demands went beyond what the company believed reasonable and went beyond what was agreed as part of the national bargaining agreement.”
The union said the old contract with Chevron in Richmond expired on February 1 and workers were reporting to their jobs for a 24-hour extension.
White said the company had offered a 2.5% wage increase, but the union had asked for 5% to keep pace with inflation and the cost of living in the Bay Area.
“It’s tough for blue-collar workers in the Bay Area, and we’ve asked for a 5% increase to help us a little bit with our medical services at Kaiser, which is up 23% last year,” White said.
White said the company has already brought in about 100 replacement workers who were not trained to run the factories.
“This is at the expense of the city of Richmond and the environment,” he said.
The company said it has brought in eligible replacements starting with a Sunday shift.
“Employees operating the refinery during the strike have fulfilled the requirements necessary to perform their assigned functions (including receiving on-the-job training from experienced employees/operators) in order for the refinery to operate safely and in compliance with all requirements, Chevron spokesperson Tyler Kruzic said in an email.
If the strike shuts down the refinery, it could negatively affect gasoline prices in California — which has the highest price for regular gas in the country at $5.86 a gallon, according to the American Automobile Association.
However, Ken Medlock, director of the Center for Energy Studies at Rice University’s Baker Institute, said the strike was unlikely to lead to Chevron closing its operations or raising prices.
The refinery is likely to operate with a structural staff “until the work contract issues are resolved,” Medlock said in an email.
“California’s prices are already higher than other states because of the unique mix that must be sold in the state that limits the balance of gasoline imported from other regions, so there is a huge incentive to keep the refinery running,” he added.
The union said the old contract with Chevron in Richmond expired on February 1, and workers were reporting to their jobs 24 hours a day.
Chevron Corporation of San Ramon, California, said on its website that the refinery employs 1,300 workers. White said the union represents about 600 employees, including fitters, pipe fitters, lab technicians and warehouse workers.
The refinery is one of the largest in the state and processes about 240,000 barrels of crude oil per day to make gasoline, diesel, jet fuel and lubricants, products primarily sold in California.
Chevron said in a statement that it was “fully prepared to continue its normal operations” despite the strike.
“We do not anticipate any problems in maintaining a reliable supply of products to the market,” she said.