By Erwin Seba
HOUSTON, Feb 2 (Reuters) - Union workers were on strike fora second day on Monday at nine U.S. refineries and chemicalplants in an attempt to force oil companies to sign a newnational contract covering laborers at 63 plants.
The walkouts were the first held in support of a nationwidepact since 1980 and target plants with a combined 10 percent ofU.S. refining capacity.
Talks broke down against a backdrop of plunging crudeprices, which have fallen by half since June, prompting oilcompanies to cut spending.
The United Steelworkers union (USW) said Royal Dutch ShellPlc, the lead industry negotiator, halted negotiations early on Sunday after the union rejected a fifth proposal fromthe company. Shell said it would like to restart talks.
Shell activated a strike contingency plan at its jointventure refinery and chemical plant in Deer Park, Texas, to keepoperating normally.
Other companies said they called on trained managers asreplacement workers, so the strikes are not expected to causegasoline prices to surge.
Still, oil prices fell early on Monday in Asia, with tradersciting the strikes, which could potentially dent demand, andstrong price gains last week.
Brent crude oil futures were trading at $51.63 abarrel at 0130 GMT, down $1.36, while U.S. West TexasIntermediate futures had dropped $1.37 to $46.87 abarrel.
Tesoro Corp said management was operating itsrefinery in Carson, California, and that managers would takeover from union workers at its plant in Anacortes, Washington,in the next 24-48 hours. It said its Martinez, California,refinery, which was undergoing maintenance work, would be shutdown.
Besides Shell and Tesoro, the USW said strikes were calledat three plants belonging to Marathon Petroleum in Texasand Kentucky, and LyondellBasell's plant near Houston.At least two of the plants on the list have a history of deadlyaccidents.
The USW said all other refineries it represents - includingExxon Mobil Corp's refinery in Beaumont, Texas - wouldoperate under rolling 24-hour contract extensions.
The expiring three-year national contract covers about30,000 hourly workers at plants that together have two-thirds ofU.S. refining capacity.
The latest rejected proposal was the fifth turned down sincenegotiations for a new three-year agreement began on Jan. 21.
The USW is seeking annual pay raises double the size ofthose in the last agreement. It also wants work that has beengiven in the past to non-union contractors to start going to USWmembers, a tighter policy to prevent workplace fatigue, andreductions in members' out-of-pocket payments for healthcare.
Gene Oliver, president of the union chapter atLyondellBasell, said the company brought 10 issues to the tableand did not want to discuss all of the 36 points the unionraised.
"They were unwilling to work on the issues," he said.
Independent refiners, such as Valero Energy Corp, have made big profits recently by tapping cheap crudes from theU.S. shale revolution, while refining units at integratedcompanies such as Exxon have provided a cushion against lowprices hurting upstream operations.
But the drop in oil prices since last summer, when they wereabove $100 per barrel, has hurt the union's hand, analysts said. (Writing by Terry Wade; Editing by Eric Walsh)
