By George Thomas – Special to Tradetalk
For decades, pipelines have transported commodities throughout our country; indeed, pipelines have carried Canadian energy resources not only east to west but from north to south into the United States where they have then been shipped to an energy-starved world.
Shipping our resources for world consumption has long been a challenge as for the most part, our product is destined almost exclusively to a single purchaser–the United States. And with only one customer, our resources are sold at discounted rates. The price for Western Canadian Select on Nov. 14 was $45.52 while West Texas Intermediate was $56.81. At times, the spread between WCS and WTI has even been greater. Our resources were captive to the dictates of a single market. In order to get better value for our product, we need to access the rest of the world who want Canadian energy.
Access to tide water, continued domestic supply
We have long realized the only way to export Canadian energy is to get the product to tide water. There have been multiple proposals for pipeline construction for years. The Enbridge Northern Gateway proposal was cancelled. The TransCanada Energy East proposal was cancelled. The only project that has a realistic goal of transporting Canadian Energy to tide water is the Trans Mountain Expansion (TMX) project. (The existing line was built in the 1950s by Building Trades members.)
TMX will expand the existing 1,150- kilometre pipeline from the Alberta oil sands to the Burnaby terminal. The expansion will triple the current pipeline capacity so diluted bitumen can be shipped to Asian markets. The pipeline is the only pipeline on the continent that pumps batches of crude and refined oils at the same time. So the expansion is not only for export of diluted bitumen for off-shore consumption but diesel and gas–the very stuff we put in our vehicles which affords us the opportunity to enjoy our quality of life.
To say that pipeline construction is controversial would be an understatement! Environmentalists decry the project as it will increase Canada’s Greenhouse Gas (GHGs) emissions. While it is likely Canadian GHGs will increase due to the project, it is also true that providing Asian countries with cleaner burning energy sources will lessen the amount of wood, dung and coal being used as energy sources. But let’s save that argument for another time.
The Building Trades; the Government of Canada; Kinder Morgan (The Good; The Bad; The Ugly)
Pipeline controversy was not just limited to the environmental protesters in the streets and on the Burnaby Mountain site. While hundreds demonstrated, thousands of others quietly supported the proposed project. (An Ipsos poll conducted in June of 2019 shows 60 per cent of British Columbians support the project.)
Building Trades members have been responsible for pipeline construction from the beginning. Pipeline companies have literally built tens of thousands of kilometres of pipeline using the skilled members from our local unions. But the Kinder Morgan TMX pipeline proposal was wanting to build the project very differently–they wanted to build the expansion with non-union contractors, which of course translated to those contractors employing a non-union workforce with questionable skills.
Building Trades representatives from all levels (local union business managers and agents as well as international representatives) attended numerous meetings with Kinder Morgan. “All of us know that pipelines are the most efficient and safest transport system to bring natural resources to markets…” said Tom Sigurdson, executive director for the BC Building Trades, “… it only made sense for us to be on board and supporting the expansion of Kinder Morgan’s TMX project. Little did we know how drastically that would change. ”
At one meeting, Kinder Morgan management invited local and international union representatives to attend a project update. The update lasted hours and at the end of the presentation, the Kinder Morgan officials advised that our contractors and thus our members would not be working the project. “We all left the meeting wondering just WTF happened,” said Sigurdson.
The TMX project, while it was still owned by Kinder Morgan, continued in its work to secure the necessary approvals. They continued to reach out to the Building Trades suggesting that some component of the work would be available for union members. And we in the Building Trades continued to generally support pipeline development and cautiously support the KM TMX project.
Meetings between KM TMX continued with the international reps of the four unions that build pipelines in Canada: the International Brotherhood of Teamsters (IBT), United Association of Plumbers and Pipefitters (UA), Labourers International Union of North America (LiUNA) and International Union of Operating Engineers (IUOE). Representatives Lionel Railton (IUOE), Patrick Campbell (IUOE), Heiko Wiechern (UA), Mark Olsen (LiUNA) and Gary Kitchen (IBT) had numerous meetings with the leadership of KM TMX and managed to secure small components of the project.
While continuing to support the officers and staff in the various local unions, the representatives from the four unions worked together on the TMX file. “Obviously we have a philosophical bent that this pipeline has to be built,” said Railton. “The product is important to us because it employs a lot of our men and women… The Trans Mountain Pipeline is a major project in our space, in our jurisdiction.”
Campbell said, “We’ve constructed 95 per cent of the NEB pipelines in Canada. All four trades working in oil and gas are signatory to three national collective agreements.” Not getting the work, “would have been a major blow to our industry.”
Government buys TMX
In May of 2018, the federal government announced it purchased the Trans Mountain Pipeline from Kinder Morgan and the attention turned from meeting with a private corporation to lobbying
“Big projects are extremely difficult to execute,” Railton said. “The only way is if it is done in the national interest, so the government of Canada stepped in. And kudos to the government for having the vision to do that. Now we had Spread 1 out of Alberta and Spread 4 north of Kamloops to Blue River which made up 28 per cent of the pipeline work. But we wanted Spread 7 in Burnaby to the terminal. It has the most diverse amount of work: marine, the tank farm and the tunnel. Two million metres of material is coming off Burnaby Mountain. We told Ian Anderson, who remained in charge of the project, ‘We’ve got to talk to the new owner.’”
Multiple meetings were held with cabinet ministers and high-ranking bureaucrats, and sometimes the prime minister was present. “We told them, ‘We’ve ticked off all the boxes that the government insisted on and funded. We’re engaging Indigenous communities, bringing in new skilled workers, advancing women in the trades–(If we don’t get the work) all those funds will be sunk.’ Despite our good relationship with them (government leaders), we really put their feet to the fire.”
Partners with the industry
Carrying the messages of the Canadian Association of Petroleum Producers, the international reps communicated strongly with their local union members in Alberta and B.C. “This is a nation-building project,” said Campbell. “It will be all Canadians who benefit from the royalties and 15,000 construction jobs. Construction workers won’t be spending their money in Singapore. There will be a ripple effect.”
Opposition to the project “affects growth in the oil sands,” added Wiechern (UA). “It’s scaring investors away. (But) they’re just leaving the province and reinvesting their capital down south. But there continues to be four million barrels leaving the oil sands every day. The bitumen hasn’t stopped. We’re still building capacity but it’s going by railway. There are 350,000 barrels a day moving by rail and rail companies want to increase that.”
Olsen (LiUNA) said, “It may sound like I’m pushing the corporate line but it is the most environmentally conscious project in the world. I’ve seen how they pull back the forest (in the Alberta oil sands), mine the sand in an open pit, extract the bitumen from the sand and then put the sand and boreal forest back in place. You would never know the area had been mined. It’s ethically and environmentally produced. Why would we use oil from other countries like Venezuela? We want to export to China.
“We had six years of constant pressure on the Trans Mountain team, constant lobbying of provincial and federal governments and messaging to our members. And, in the end, it paid off.”
“We have 1.6 million hours (50 per cent of the overall work) now,” said Railton. “What matters to me is, from a national perspective, we don’t want, and can’t have, the non-union sector building capacity. We can’t push it any further down the road but we will be active in trying to organize the other portions of work.” Stay tuned!