(Adds comment from executives at oil companies)
By Erwin Seba
HOUSTON, Feb 3 (Reuters) - At tense meetings just daysbefore the first major U.S. refinery strike in 35 years wascalled on Sunday, union leaders grew increasingly pessimisticabout getting a new labor contract and a sizable wage increase.
"The chances of there being an agreement are that of asnowball in hell," one of them complained as the deadlineimposed by the expiring contract loomed.
Officials from Royal Dutch Shell Plc , thelead negotiator for the oil companies, were repeatedly saying it would be too hard to meet the union's demands for a newthree-year contract to lift pay and tighten safety practices,several union officials told Reuters.
But what most frustrated the United Steelworkers union (USW)was something they had never seen before: an intransigent Shell.
The USW had always viewed Shell as the most flexible of thebig oil companies, much easier to negotiate with than ExxonMobil Corp or Marathon Petroleum Corp. In fact,the union picks the company to head up negotiations andspecifically chose Shell this year for its perceivedflexibility.
"We were very, very shocked," USW International PresidentLeo Gerard said about Shell's decision to cut off talks onSunday.
"Shell has been a responsible lead company in years past. Wehave been able to have rational, reasonable negotiations withthem," Gerard told Reuters on Monday.
A Shell official declined to comment on the details of thelabor negotiations. Before it suspended talks, Shell had madefive offers that were all rejected by the union.
Late on Monday, Shell said it had resumed contact with theunion "in hopes of coming to a mutually satisfactory contractagreement." The USW said on Tuesday that no meetings have beenscheduled for new contract negotiations.
Oil industry executives said they were surprised at howtough going the talks were, adding that representatives from thenational union appeared to be taking a harder line than localunion leaders.
Disagreements over how to monitor worker fatigue, which istied to accidents, were especially thorny, they said.
Unlike in previous negotiations, there is a "big disconnect"between the locals and the national union, according to tworefining executives.
A text message seen by Reuters sent by the union to itsmembers on Jan. 25 said companies were "play(ing) games" atlocal negotiating tables.
HISTORY OF FLEXIBILITY
Shell had forged deals with the union in 2006, 2009 and2012. Those contracts were considered successes, especiallyafter a months-long walkout in 1980, a time people still talkabout as a low point for disputes in the sector.
This year, however, was different. John Abbott took over asShell's refining chief in 2013 and Ben van Beurden became chiefexecutive officer in 2014.
This time, there were new faces on the negotiating team fromShell, and a 50 percent slide in oil prices sinceJune cast a shadow over the talks as companies slashed spending.
Feeling they had no other option, the union called a strikeat nine plants with a combined 10 percent of U.S. refiningcapacity.
Mystified by Shell's change in tone from previous contracttalks, some striking workers on Monday said they think that oilcompanies, seeing that many older refinery workers are retiring,are trying to test the strength of younger union members.
Cutting off talks that began Jan. 21 may have just been aploy, they said, so that the companies can push for a deal thatlimits new costs - a move that would please shareholders.
Indeed, some people picketing on Monday near Houston saidShell may have given the union a big head fake and that thecompany would soon reopen talks.
The union is seeking annual pay raises of 6 percent, doublethe size of those in the last agreement. It also wants work thathas been given in the past to non-union contractors to startgoing to USW members, a tighter policy to prevent workplacefatigue, and reductions in members' out-of-pocket payments forhealthcare. (Additional reporting by Jessica Resnick-Ault; Writing by TerryWade; Editing by Lisa Shumaker, Bernard Orr)
