No impact to operations at Valero refinery, spokesperson says

While Tesoro has shut down its refinery in Martinez after employees walked off their jobs, it’s still business as usual across the Carquinez Strait at Valero Benicia Refinery, Sue Fisher Jones, public affairs manager, said.

“Labor discussions at Tesoro are not affecting operations at the Valero Benicia Refinery,” she said.

Tesoro Golden Eagle Refinery has begun the process of shutting down its refinery after approximately 400 of its workers joined an estimated 3,400 United Steel Workers members in labor strike actions that spread across the country, including at refineries belonging to Marathon and Shell.

Tesoro’s is one of nine total refineries experiencing walkouts by the United Steel Workers.

The union asked those members to go on strike at 12:01 a.m. Sunday after national bargaining talks broke down, said Lynne Hancock, a union spokeswoman, in a news release.

This is the first walkout at Tesoro’s Martinez refinery in 35 years, company officials have said.

The union represents about 30,000 workers, according to its official statistics. Those members include employees of 230 American refineries, oil terminals, pipelines and petrochemical plants.

In the face of the walkout, the local Tesoro plant managers decided to continue a shutdown process it had begun earlier, officials said in a prepared statement.

“Our Martinez refinery is currently in turnaround, with half of the plant shut down for planned maintenance,” the statement, released Monday, said.

“Given the United Steel Workers’ decision to strike, the safest operating option at this time for Martinez is to safely shut down the remaining process units,” the refinery statement said.

“As part of this process, your readers may see flaring, which is the standard and safe way to burn off excess emissions.”

Shell Oil has been leading the negotiations with the union. Talks broke down after the steel workers rejected four offers since Jan. 21.

However, no strike has been scheduled at the Shell refinery in Martinez, which is operating under daily contract extensions.

Union representatives, who said their concerns are centered on safe staffing, health care costs and use of outside contractors in daily refinery maintenance, have said Shell failed to provide a fifth offer and left the table.

“The work stoppage is based on health and safety issues,” Hancock said. “It’s not about wages. We wanted to come out of this round of bargaining with meaningful and enforceable health and safety protections that would help prevent future explosions, fires and leaks. We did not want to go on strike.

“We did everything we could to avoid it.”

Some motorists noticed that gasoline prices have started to climb in the Bay Area after 17 weeks of decline, and some have speculated that the strike might be to blame.

But before the walkout, American Auto Association (AAA) spokesperson Avery Ash said prices would experience seasonal increases prompted by a change to summer blends, increases in demand and refineries’ historic practice of reducing operations in the first and second quarters so they can make repairs to their campuses.

The lengthy drop in gas prices came as crude oil prices also declined. The U.S. Energy Information Administration has predicted prices would average $2.33 nationwide this year, with a spring jump to $2.50 a gallon nationally, which still would be lower than the $3.36 average per gallon nationwide a year ago.

California has its own blends, mandated by the California Air Resources Board (CARB) to reduce emissions, and it reformulates that recipe in phases, each more restrictive than the previous blend.

Historically, gasoline prices here are among the highest in the country.

Market changes also impact prices at the pump. Gasoline futures increased 4.4 percent Monday, one of the largest jumps since Dec. 23, 2014. American oil prices rose by 2.8 percent, to $49.57 a barrel.

That means Valero Benicia Refinery has little say in what a Benicia driver will pay at Valero’s retail pumps, Fisher Jones said.

“Valero is in the refining business and does not set the prices for gasoline or diesel prices in the marketplace,” she said.

She provided the link to the U.S. Energy Information Administration report, as well as that of the California Energy Commission’s study of the state’s petroleum industry, http://energyalmanac.ca.gov/petroleum/index.html.

The EIA said the gas price decline was the largest percentage since 2007, but would be rising as per-barrel oil prices increase, coinciding with outages at Midwest and Gulf Coast refineries.

American fuel prices usually follow the North Sea Brent Crude Oil international benchmark, the EIA report explained. Brent crude prices fell from $115 a barrel in June 2014 to $45 a barrel Jan. 13 because of high refinery output and a seasonal decline in demand.

The California Energy Commission states that the state produces 37.2 percent of the petroleum it uses, and imports the rest. Currently, 96 percent of the state’s transportation fuel needs are met through petroleum-based products.

That report noted this dependency makes California vulnerable to price spikes, and that transportation is the state’s largest greenhouse gas emitter.

The situation will continue while demand for gasoline and diesel fuel is high, the commission reported.

“A number of factors play into the prices at the pump in California including, but not limited to, supply, demand, crude oil price, marketing and distribution, taxes — federal, state, regional, city — CARB’s Cap and Trade Program (effective Jan. 1, 2015) and speculation on the market,” Fisher Jones said.