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They Wanted to Keep Working. ExxonMobil Locked Them Out.

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Mindy Isser - In These Times

The lockout began May 1, known in most parts of the world as International Workers’ Day. In a matter of hours, the ExxonMobil Corporation escorted 650 oil refiners in Beaumont, Texas, off the job, replacing experienced members of United Steelworkers (USW) Local 13?–?243 with temporary workers?—?and hoping to force a vote on Exxon’s latest contract proposal. USW maintains the proposal violates basic principles of seniority, and more than three weeks after the union members were marched out of their facility, they remain locked out.

“We would have rather kept everyone working until we reached an agreement,” Bryan Gross, a staff representative for USW, tells In These Times. ?“That was our goal.”

Because strikes and lockouts are often measures taken under more dire circumstances, either when bargaining has completely stalled or is being conducted in bad faith, USW proposed a one-year contract extension. But Exxon rejected the offer, holding out for huge changes to contractual language regarding seniority, safety and layoffs. ?“It’s a control issue,” Gross adds. ?“Exxon wants control.”

As the oil industry attempts to deskill (and ultimately deunionize) its labor force, refinery workers like those in Beaumont find themselves under siege. Not only is their industry buckling beneath the weight of a global health crisis, but climate change has come to threaten their very livelihoods. Many workers remain skeptical of existing plans for a just transition.

Since the coronavirus pandemic began in March 2020, refiners have taken drastic measures to offset steep drops in the price of oil by reducing production, selling assets and even closing some facilities. While the unionization rate in the oil and gas industry is currently higher than the rest of the U.S. workforce (15% compared with nearly 11%, per Reuters), BP, Marathon Petroleum Corporation and Cenovus Energy have cut labor costs by either downsizing or subcontracting to non-union workers.

Exxon appears to be following along. Local 13?–?243 member J.T. Coleman, who has worked at the Beaumont refinery for a decade now, fears that hiring so many of these non-union workers to operate the facility could get somebody hurt. ?“We’re familiar with the equipment,” he says. ?“They’re not trained like we are.”

USW has filed complaints with the National Labor Relations Board accusing Exxon of refusing to bargain, modifying their agreement with the union and coercion. Exxon did not immediately respond to a request for comment from In These Times.

The complaints come at a time when the future of oil, in Texas and beyond, has never been more uncertain. In February, three severe winter storms walloped the state, killing 100 people and leaving millions without power. Similar storms hit Texas in both 1989 and 2011, but state lawmakers failed to heed calls from experts to upgrade the power grid at the time. When temperatures plunged below freezing this February, many sources of power in the state failed, including those generated from natural gas. 

Production at the Beaumont refinery was shut down for a week, but many of its operators continued their shifts, some staying in the plant for 24 hours at a time. ?“We weren’t set up for the freeze, so they were defrosting lines and pumps, de-icing stuff so they could get moving on the product again,” says Hoot Landry, a staff representative for USW. ?“But we don’t get any credit for that.”

Nearly 40 million barrels of oil were lost during the production freeze. Perhaps in a sign of things to come, refinery workers shifted from producing and manufacturing oil products to restoring power for those affected by the extreme weather.

The impact of these storms has not been lost on the Sunrise Movement, which has become a political home for young people in the fight against climate inaction. On May 10, 20 Sunrise Movement activists began a 400-mile march from New Orleans to Houston to demand the Biden administration adopt the Green New Deal.

“[Our members aim to] learn from our neighbors here in the Gulf South about what they’re facing, the solutions that they’re already pioneering, the fights they’ve won, and the fights they still need help fighting,” says katie wills evans, a volunteer local press coordinator for the group. ?“We’re doing all of that to bring attention to the need for a Green New Deal and a good jobs guarantee.”

If the Sunrise Movement ultimately succeeds in getting some version of the Green New Deal passed, then, in theory, the Beaumont refinery would be closed and members of Local 13?–?243 would be trained for different work. According to wills evans, these jobs would be ?“more fulfilling, more purposeful, less damaging to our planet and less dangerous to workers.”

“We want to work next to you,” wills evans continues. ?“We want you to make the same amount of money and have the protection of a union and have healthcare for your family.”

While oil workers and environmental activists are understandably suspicious of one another, wills evans believes they have more in common than they may think?—?namely, a shared enemy in oil bosses like Exxon. As Sunrise Movement activists make their way to Houston by the end of June, wills evans hopes they will meet with the locked-out refinery workers to offer their solidarity and support. 

“I’m the great granddaughter of a coal miner, I come from Appalachia where coal mining fed us,” wills evans says. ?“But [refinery workers] are on a picket line locked out right now, so can they say they have a good job?”

Good or not, neither the refinery workers nor USW staff who spoke with In These Times see oil jobs going anywhere any time soon. They don’t especially want them to go anywhere, either?—?even if they recognize the dangers of climate change. ?“I think we have to start moving towards a cleaner environment,” Gross says. “[But] oil is going to be around a really long time; I don’t think it is going to go away overnight.”

Prior to USW, Gross worked at a separate refinery in Port Arthur, Texas, which is par for the course in the Gulf South. Alabama, Florida, Louisiana, Texas and Mississippi are home to more than half a million jobs in the oil and gas industry. And no matter how unstable these jobs may feel?—?no matter how destructive they may be to the environment long term?—?many communities rely on them for their survival.

“I would entertain other jobs, but I take pride in my work,” Coleman says. ?“I don’t work for Exxon because I love the company. I work for it for its benefits. And as long as those benefits exist, it’s going to be a part of my life.”

Perhaps the biggest obstacle to oil refiners aligning themselves with an organization like the Sunrise Movement is the lack of clarity surrounding a just transition. Many want to know what will happen to workers in extractive industries, and they fear promises made to them now will not be kept. Still, the lockout in Beaumont makes clear that a distinctly unjust transition is already underway: refiners are losing control over their worksite as employers seek to reduce their exposure in an increasingly unstable industry.

“We want to be back to work, but we want to do it with a fair agreement that is not solely beneficial to one side,” Coleman adds. ?“We are willing to work. We all want to return to work. But we want to do it with something that ensures our security, our seniority and our safety.”

But as climate change accelerates and weather patterns become more extreme, these jobs may never be safe or secure again.

This blog originally appeared at In These Times on May 24, 2024. Reprinted with permission.

About the author: Mindy Isser works in the labor movement and lives in Philadelphia.


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One of the world’s largest banks thinks the writing is on the wall for the oil industry

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romm_joe_bio

Plunging prices for batteries and renewables are driving an electric vehicle (EV) revolution so rapidly that the economics of oil “are now in relentless and irreversible decline.”

That’s the startling conclusion of a detailed new analysis for “professional investors” of the economics of EVs versus gasoline cars produced by BNP Paribas, the world’s eighth largest bank by total assets.

The report is good news for humanity because it means peak oil demand may be less than a decade away, which in turn means ambitious climate goals will be more affordable than previously thought.

But the bank’s analysis, “Wells, Wires and Wheels,” is devastating for Big Oil. It concludes that “the oil industry has never before in its history faced the kind of threat that renewable electricity in tandem with EVs poses to its business model.”

Within a few years, electric vehicles (EVs) will be superior to gasoline powered cars in every respect. In part, that’s because electric motors are vastly more efficient than gasoline engines. And it’s also in part because solar and wind power and batteries have seen staggering price drops in the past decade — and are projected to see equally big drops in the coming years.

But one of the most startling findings is that because the cost of running EVs on solar or wind power is dropping so rapidly, the only way gasoline cars can compete with these renewable energy-powered EVs in the 2020s is if the price of oil were to drop to $11 to $12 per barrel. The current price of oil is over $50.

Even worse for oil, this economic analysis doesn’t even factor in many of the other benefits of running cars on renewable power rather than oil. These include the vast public health benefits of not breathing air pollution from burning oil, along with the benefits of not having huge oil spills and of not destroying a livable climate.

The report is written by Mark Lewis, global head of sustainability research at the bank. Lewis formerly worked as head of European utilities research at Barclays and as global head of energy research at Deutsche Bank.

Lewis notes that many independent analyses — including Bloomberg New Energy Finance and the risk management firm DNV GL — have concluded that in the 2022-2024 timeframe, the total lifecycle cost of owning an EV will be cheaper than that of owning a gasoline-fueled car.

The report also looks at the lifecycle costs of oil (drilling, production, and transportation) versus the life-cycle cost of renewable power plants (building and operating).

“We think the economics of renewables are impossible for oil to compete with when looked at over the cycle,” the study concludes.

If the future is so bad for oil, then why hasn’t there been a crash in either the price of petroleum, or the stock prices of major oil companies?

“There is a catch, and it is a big one,” explains the report, “oil has a massive incumbency advantage.”

Right now, oil is benefiting from the fact that its entire production and delivery system was built over decades and that investment gives oil a big short-term advantage over EVs, which have yet to build-out their fueling infrastructure globally.

“The clear conclusion of our analysis is that if we were building out the global energy system from scratch today,” Lewis explains, “economics alone would dictate that at a minimum the road-transportation infrastructure would be built up around EVs powered by wind- and solar-generated electricity.”

But oil has a big head start. And, of course, Big Oil uses its vast current income to buy political power so that it can slow down investment and government policies aimed at advancing electric cars.

Lewis, however, argues that from a policy perspective, governments need to start making much bigger investments in electric cars and their fueling infrastructure, simply because the economics are becoming so good for EVs and the public health and climate benefits are so huge.

Since BNP Paribas is a big bank and the report is for investors, though, a key point of the analysis is that oil companies are investing staggering amounts of money in finding and producing new wells — and most of them are going to lose a lot of that money.

“By the late 2020s” Lewis explains, a significant fraction of the oil produced today “might only be competitive at a price below [oil companies’] full cost of production.” Even worse, this fraction “will rise over the lifetime of these projects as the penetration rate of EVs increases.”

If you can’t produce oil profitably at under $10 or $20 a barrel, your oil company is in big trouble.

From a broader perspective, Lewis warns that all this money currently being spent on finding and producing new oil is a huge waste — “an opportunity cost to society as a whole.”

Exactly how big a cost? BNP Paribas calculates “the size of that opportunity cost is $24 trillion over the next 25 years on gasoline alone.” And that’s without counting the cost of saving a livable climate.

It’s time for investors and governments to walk away from Big Oil before the crash — and before it’s simply too late to save our children and future generations from catastrophe.

This article appeared originally in Think Progress on August 9, 2019. Reprinted with permission.

Dr. Joe Romm is a Fellow at American Progress and is the founding editor of Climate Progress, which New York Times columnist Tom Friedman called “the indispensable blog” and Time magazine named one of the 25 “Best Blogs of 2010.” In 2009, Rolling Stone put Romm #88 on its list of 100 “people who are reinventing America.” Time named him a “Hero of the Environment? and “The Web’s most influential climate-change blogger.” Romm was acting assistant secretary of energy for energy efficiency and renewable energy in 1997, where he oversaw $1 billion in R&D, demonstration, and deployment of low-carbon technology. He holds a Ph.D. in physics from MIT.


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