Exxon Seeks to Keep Refinery Running in Lockout as Summer Nears

The Exxon Mobil Corp. Texas refinery that’s set to become America’s largest oil-processing plant had to tap temporary crews to keep making gasoline and diesel during a worker lockout as the fuel industry prepares for a strong rebound this summer.

With the help of trained temporary employees and contractors, the Beaumont refinery has sufficient resource to “safely and efficiently operate,” the oil giant said in a statement Monday. It’s the first time the refinery has faced such a situation, and it’s unclear how it may affect production.

American refiners are racing to build up gasoline supplies to meet what they hope is a robust summer driving season as the country emerges from a pandemic that wiped out demand a year ago. Beaumont is poised to jump to the top position among U.S. refineries, up from seventh-largest, and surpass Saudi Arabia-owned Motiva Enterprises’ facility in Port Arthur, Texas.

Exxon has been bringing in giant equipment modules to construct a third crude unit that would expand Beaumont’s 369,000 barrel-a-day crude capacity by 250,000 barrels. The expansion project, initially targeted for 2022 completion, has already been delayed by a pandemic-related reduction in fuel demand, forcing the need to cut capital spending and operating expenses.

The United Steelworkers, meanwhile, filed two charges against Exxon April 23 with the National Labor Relations Board, alleging repudiation/modification of contract and coercive actions, including surveillance. The union’s latest work agreement with Exxon expired Feb 1. The lockout affects more than 650 members of USW Local 13-243 employed by the refinery, as well as a blend and packing plant.

Exxon didn’t immediately respond to a request to comment on the impact of the lockout on the expansion project or its expected completion date.

Exxon and the United Steelworkers continue to negotiate after union members where locked out Saturday, following failure to reach an agreement in contract talks.

Union workers began picketing the refinery when the lockout occurred midday Saturday. This is the first lockout at the Beaumont plant. The refinery was also not included in a 2015 strike called by the USW International Union for 12 U.S. refineries.

In the most recent example of a lockout in Texas, Dow Chemical Deer Park USW workers were banned from coming inside in April 2019 after contract negotiations broke down. The workers were allowed back in the plant after seven weeks, and negotiations continued until another contract was agreed on six months later.

©2021 Bloomberg L.P.

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