Refinery workers avert strike with four-year deal that adds first AI guardrails

Refinery workers across the United States will stay on the job after their union and the industry’s lead negotiator reached a four-year deal that sets wages and working conditions for much of the nation’s fuel supply and, for the first time, puts guardrails around the use of artificial intelligence inside plants.

A national pattern deal, and a strike averted

The United Steelworkers (USW) announced Feb. 6 it had reached a national “pattern” agreement with Marathon Petroleum that will cover about 30,000 refinery and petrochemical workers whose contracts were set to expire at the start of the month. The settlement heads off the possibility of a nationwide refinery strike that could have disrupted gasoline, diesel and jet fuel production from the Gulf Coast to the West Coast.

The agreement—still subject to ratification along with local contracts at individual plants—provides a 15% cumulative wage increase over four years and a $2,500 signing bonus for union-represented employees. It will serve as the template for contracts at more than 200 bargaining units that together account for roughly two-thirds of U.S. refining capacity.

“Our unity and solidarity across the country, across employers, across our industry, made this agreement possible,” said Mike Smith, chair of the union’s National Oil Bargaining Program.

How pattern bargaining works

Under the pattern bargaining system the union has used for decades, Marathon serves as lead company and negotiates a national package on wages and key working conditions. Other major refiners and petrochemical operators—including Exxon Mobil, Chevron, Valero and BP—typically follow those terms, with local talks at each facility to address issues such as scheduling, overtime and job classifications.

This round of bargaining went to the wire. The previous four-year agreement, also struck with Marathon, expired at 12:01 a.m. Feb. 1. Rather than call a strike or accept a lockout, the union agreed to work under rolling 24-hour contract extensions while talks continued.

On Jan. 29, the union’s bargaining committee unanimously rejected an earlier comprehensive proposal from Marathon. At the time, the union said it was “fighting for safety for all oil workers and our communities, real job security and fair wages that recognize our skill and sacrifices.” Marathon said then it remained committed to negotiating in good faith.

By the start of February, Marathon had put a final economic offer on the table: a four-year deal with general wage increases of 4% in the first year, 3.5% in the second, 3.5% in the third and 4% in the fourth, plus the $2,500 bonus. People familiar with the talks said the union initially sought 16% in total raises but ultimately accepted the company’s 15% offer to secure improvements on other national priorities.

Wages, safety and healthcare: what’s in the deal

The pay gains come on top of already relatively high hourly wages in the sector. Inside operators at large refineries commonly earn in the range of $50 an hour before overtime and differentials. A 15% increase over four years would raise that base by about $7.50 an hour by the end of the contract.

Beyond wages, the pattern agreement addresses healthcare costs, job security, staffing and the use of AI and digital technologies in refineries and chemical plants, according to the union and people briefed on the talks. Full contract language has not yet been released, but union leaders said they pushed to protect members from rising health insurance premiums and from outsourcing that could shift jobs to contractors.

Safety was another central issue. In recent bargaining cycles, the union has sought stronger provisions on fatigue, minimum staffing and process safety, citing a string of major refinery accidents and near-misses over the past two decades. The 2015 refinery strike—the first nationwide walkout in the sector since 1982—was largely driven by safety and staffing concerns and ultimately produced new language on fatigue and hazard controls.

AI guardrails enter refinery contracts

In this cycle, negotiators also clashed over standards for how companies can deploy artificial intelligence and advanced analytics inside high-hazard facilities. Refiners are increasingly using algorithms to monitor equipment, predict failures and optimize operations; workers and their union have argued those tools can affect both job security and safety.

The union said the new agreement includes language addressing the impact of AI on jobs and working conditions, though details were not immediately available. Media outlets that reviewed summaries of the deal reported provisions dealing with the oversight of AI systems and their effect on staffing.

Marathon, the largest U.S. refiner by capacity, said it was satisfied with the outcome.

“We are pleased to have successfully negotiated a pattern agreement for new collective bargaining agreements in the U.S. refining industry,” company spokesperson Jamal Kheiry said.

Local talks still ahead—and a potential exception at BP Whiting

The national agreement does not automatically take effect at every plant. Each bargaining unit still must negotiate a local contract covering issues such as job bidding, overtime, training, maintenance assignments and local work rules. Workers then vote on the combined package—the national pattern plus the local agreement—at their facility.

In most past bargaining rounds, major employers have adopted the pattern without significant public dispute. This year, a high-profile exception has emerged at BP’s Whiting refinery in northwest Indiana, one of the largest refineries in the country and BP’s biggest plant worldwide.

USW Local 7-1, which represents about 800 workers at Whiting, said BP has told the union it does not intend to honor the national pattern, a break from past practice.

In a notice to members, Local 7-1 President Eric Schultz said BP had put forward “concessionary proposals” that would “eliminate local jobs, reduce pay across the board and strip us of bargaining rights.” He called the company’s refusal to follow the pattern unprecedented and urged members to prepare for the possibility of a strike or a lockout.

BP has said it is bargaining in good faith at Whiting but has not publicly released its proposals. The company has not disputed that it is seeking different terms than the national pattern.

Any prolonged shutdown at Whiting would likely ripple through regional fuel markets. The refinery processes roughly 440,000 to 450,000 barrels of crude oil a day and is a key supplier of gasoline and diesel to the Chicago area and the broader Midwest. The facility has also drawn scrutiny from nearby residents and environmental groups, who have cited repeated equipment problems, flaring and air emissions.

Why the pattern matters to the industry

A local standoff in Indiana would not carry the same nationwide impact as a coordinated strike at multiple refineries. But it could test the strength of the pattern-bargaining model that USW has used for more than half a century to set industrywide standards.

Under that system, the union bargains national economics and core conditions with a lead company—once Shell, now Marathon—and then insists that other refiners match those terms. The approach aims to prevent companies from playing workers at different plants against each other and to provide predictable labor costs across the sector.

If a major operator successfully breaks from the pattern at a large, strategically important plant, other companies could be encouraged to seek deeper concessions at the local level in future rounds.

Industry analysts say the wage increases and bonus agreed to this year are meaningful but unlikely, by themselves, to drive a jump in pump prices. Labor is one component of refining costs alongside crude prices, energy, maintenance, environmental compliance and transportation. After a period of exceptionally high refining margins in 2022 and 2023, profit margins have narrowed but remain healthy, and several refineries have closed or converted to other uses, tightening capacity.

For workers and their communities, the new agreement offers several years of pay increases and the prospect of enhanced safety and job security language in an industry that faces both economic and regulatory uncertainty. For oil companies, it delivers labor peace at the national level and a measure of predictability as they navigate volatile fuel demand, environmental rules and long-term questions about the transition away from fossil fuels.

The real test of the deal will unfold over the coming weeks and months as local unions negotiate plant-specific contracts and members vote. The national strike that refiners and politicians feared did not materialize. Whether the pattern holds everywhere—from Marathon’s Gulf Coast complexes to BP’s Whiting plant on Lake Michigan—will determine how durable this latest truce between oil workers and their employers proves to be.