BC releases special report on LNG jobs and training

BC LNG reportThe BC Ministry of Jobs, Tourism and Skills Training today released a special report on the job prospects for the LNG industry and the policies needed on training, job mobility and use of temporary foreign workers.

A news release says:

Premier Christy Clark today accepted all recommendations in ‘The Premier’s Liquefied Natural Gas Working Group: Final Report’ as a road map to making sure British Columbia has the skilled labour force it needs to seize the opportunity of liquefied natural gas.

The report, produced by representatives of government, LNG proponents, organized labour, and the Haisla Nation, maps out 15 recommendations on planning, skills training, marketing and developing best practices within the LNG sector to attract a mobile workforce.

“To bring home the opportunity presented by LNG, we have to work together — government, industry, First Nations and labour,” said Premier Clark. “Everyone here today is working toward the same goal – making sure British Columbians benefit from this generational opportunity.”

Premier Clark called together the working group after her first meeting with representatives of organized labour in September 2013. At that historic meeting it was agreed that all parties would to work together to map out how they could work together to solve some of the complex challenges associated with the LNG opportunity.

“I want to thank the Premier for setting up the working group. I also want to thank the representatives of the Haisla Nation, industry, labour and government as it has been quite a process to come to agreement on the recommendations,” said Jim Sinclair, president of the BC Federation of Labour. “We were able to get beyond our differences by keeping our focus on what B.C. workers need to take advantage of the potential that lies in LNG. Now we have to ensure that the 15 recommendations are implemented. This investment in the workers of British Columbia will lead to good jobs. As we know, good jobs build a better B.C.”

The report includes one recommendation on developing a working group moving forward, four recommendations on skills training planning and implementation, two recommendations on marketing and promotions, three recommendations on apprenticeship trades and mentoring, two recommendations on a mobile workforce, one recommendation on timelines and two recommendations on the use of workers from other jurisdictions. The recommendations will be reflected in the 10-year skills training plan that will be released soon.

“Premier Clark recognized early the need for LNG workforce development in collaboration with industry, labour, and government,” said David Keane, vice president, policy and corporate affairs for BG Canada’s Prince Rupert LNG project. “Skills training is critical to ensure citizens of the province might realize the full economic benefits of LNG.”

From the report…..

Top 10 Construction-
Related Jobs with the
Greatest Demand

1.Steamfitters &
2.Construction traders
helpers & labourers
(including riggers)
4.Concrete finishers
5.Heavy equipment
7.Truck drivers
8.Purchasing agents &
9.Gas fitters
10.Crane operators

Read the full report



Why BC should watch the Australian election: LNG and natural gas are suddenly a top issue

Could the future of northwestern British Columbia’s hoped for natural gas boom depend on the outcome of this weekend’s Australian general election?

While the mainstream media in North America has mostly been following the personal feud between Prime Minister Kevin Rudd and Opposition Leader Tony Abbott or speculating whether or not Wikileaks founder Julian Assange’s party will make a ripple or a splish, a natural gas crisis has rocketed high on to the Australian election agenda.

I’ll be the first to admit that I know very little about Aussie politics, but I couldn’t ignore all the LNG and natural gas Australian election related stories that suddenly started showing up in my alerts.

LNG train “on ice”

This morning came the alert that Chevron has put the development of another train at its giant Gorgon LNG facility “on ice” (as a pun enabled headline writer in the Western Australian put it)

Chevron and its partners in the Gorgon LNG project on Barrow Island are expected to postpone work on detailed design and engineering of a fourth processing line at the mega project until at least next year as they battle to contain the soaring cost of the foundation development.
As reported by WestBusiness at the weekend, Chevron’s latest internal cost review is understood to have placed a final cost on Gorgon’s three-train venture of up to $US59 billion ($65.6 billion), or 13 per cent above the last confirmed budget revision of $US52 billion.
Chevron is refusing to discuss the status of the cost review and is understood to have told its Gorgon team to “value engineer” in the hope of substantially reducing the latest overrun on a project that was originally supposed to cost $US37 billion to complete.


Raw logs all over again

For a resident of northwestern BC, one thought comes to mind from the media reports on the LNG situation in the Australian election, it’s raw logs all over again.

It appears from those media reports that while Australia has huge reserves of shale-based natural gas, the way the country has structured its LNG boom, major industries and consumers are becoming alarmed that domestic natural gas prices for both will soon skyrocket. There are calls for whatever party wins the election to pass legislation that would create “domestic gas reservation” so that Australians won’t see the gas exported while they pay higher prices for what’s left over.

Most of the shale gas reserves are in Western Australia, while the population—and industry– are concentrated far away on the east coast.

That is leading to another controversy, demands that eastern Australia develop its coal gas reserves, which, of course, brings to mind Shell’s decision to forgo development of coal gas deposits in the Sacred Headwaters and the ongoing fight by the Tahltan First Nation to stop Fortune Minerals’ open pit coal mine in the Sacred Headwaters at Klappan.

Then there’s another vexing issue that northwestern BC is facing and soon have to deal with. In the election, some Australian politicians and unions are calling for curbs on the use for temporary (and not so temporary) foreign workers.

Another factor is the growing cost of natural gas extraction and LNG export, which has, in the midst of the election campaign, pitted Chevron against Australian unions, with Chevron executives (as they did in other contexts before the election call) pointing to Canada—that means Kitimat, folks — as the cheaper alternative.

Rising prices

The Australian has reported that a poll, commissioned by the nation’s manufacturers, so it is somewhat suspect, that:

Manufacturers  will today claim that most Australians want a policy of domestic gas reservation and that this would sway voter intentions, a move set to renew the acrimonious debate over rising gas prices.
Manufacturing Australia will release a survey it commissioned where 35 per cent of people said it was “quite likely” and 13 per cent “extremely likely” that it would sway their decision at the election if a party made a policy pledge on the issue.Those uncertain stood at 21 per cent.

In one Australian riding, a local candidate wants one per cent of Australia’s gas be reserved just for the State of Queensland.

Bob Katter flew through Gladstone as fast as the wind whistled through Spinnaker Park on Monday, where he told local media he wanted to reserve a domestic gas supply for Australia and scrap the 457 visas that bring foreign workers into the country….

Mr Katter said mineral processing was under enormous pressure in Australia with copper processing wiped out in northern Queensland and to counter that, the Katter Australia Party would reserve 1% of the gas supply for Queensland.
“Because of the escalating skyrocketing cost of coal, gas and electricity in the past eight years, one per cent of the gas will be reserved for the benefit of the people in Queensland if not Australia,” he said.

“That gas will be used to produce electricity at prices our retirees can afford, and young families can afford, and most importantly that our mineral processing plants have prices for processing they can afford.”


Coal gas

Another story in The Australian quotes James Baulderstone of the Australian energy company Santos:

THE NSW gas industry has warned of higher gas prices, job cuts and a significant risk to the state’s energy security if the coal-seam gas sector is not developed.
James Baulderstone, vice-president of eastern Australia at Santos, said without indigenous gas of its own, NSW had no ability to control its energy supply security.
“NSW faces prospective gas shortages as long-term contracts underpinning the state’s gas supply expire over the next two to three years, the very time in which the commencement of LNG exports from Queensland will see annual gas demand in eastern Australia triple,” he said.
“Looming natural gas shortages in NSW could be avoided by the timely and balanced development of the state’s already discovered reserves of natural gas.”

The Australian Liberal Party (which like BC’s is actually conservative) supports coal gas projects. But it also wants to force energy companies to develop gas reserves they have leased.

Chevron and the unions

Also embroiling the election is the growing dispute between Chevron and the Australian unions.
As the Australian Financial Review reported, Chevron is claiming that high costs are slowing the LNG projects and blaming the government of Prime Minister Kevin Rudd.

The federal government has rejected claims from Chevron that Australia’s high-cost economy is threatening the nation’s biggest energy project, Gorgon, even as the Maritime Union of Australia demands a 26 per cent pay rise and more than 100 other benefits for its members, including Qantas Club memberships and iTunes store credits.

As Chevron’s $52 billion Gorgon project became embroiled in the ­election campaign, trade union officials accused Chevron of seeking to dodge responsibility for poor labour productivity and high costs.

The union’s demands for employees working for 19 offshore oil and gas contractors around Australia include a 26 per cent raise over four years, no foreign labour without consultation, union control of hiring and four weeks holiday for every four weeks work.

(Note there are accusations of biased reporting during this election, especially from the media owned by Rupert Murdoch. I could find no independent confirmation of union demands for airline memberships and iTunes credits) 

The Australian Labour minister, Gary Gray, who is from Western Australia, and according to reports, in a tough re-election fight, is blaming Chevron and the other energy companies for “failing to control the costs of their staff and contractors.”

“We do need our companies to get better in managing their productivity issues,” he said.

Prime Minister Kevin Rudd said he had studied China’s latest five-year economic plan and concluded Australia’s industrial relations system wasn’t hurting the industry.

Boom or bust?

The Australian Financial Review quotes Chevron Australia managing director Roy Krzywosinski as saying Australia has a two-year window to get ­policy settings right and fix industrial relations and productivity or risk losing out on billions of further investment in liquefied natural gas projects.

It goes on to make a reference to Shell and operations in Canada—again that’s Kitimat folks.

after the unprecedented rush of LNG investment in the past four years, Australia has become the most costly place worldwide for new plants, while new competition is emerging in North America and east Africa.

Shell, which has slowed its $20 billion-plus Arrow LNG project in Queensland, said construction costs in Australia are now up to 30 per cent higher than in the US and Canada.

Mr Krzywosinski said LNG projects are “long-term projects that transcend governments” and Chevron would work with all sides of politics to get policy settings right.

This Australian blogger warns:

The investment surge in LNG – often favourably compared with the Apollo moon program in its magnitude – is in some ways a bubble. Firms have rushed in, extrapolated an endless supply/demand imbalance for their product, ignored global competition, over-paid for assets and developed with little thought to what others were doing, grossly inflating input costs in the process.

The blogger goes on to say

This fallout is typical of the “built it and they will come” attitude that seized energy and mining executives in the final stages of the “commodity super cycle” boom. A similar story, with different dynamics, is playing out in coal and next year in iron ore.
The unions are largely not to blame for the cost blowouts even if they are a party to them. They are, after all, unions. What does capital think will happen if it hands them such a card to play?

Sound familiar?
Australia a mirror of the BC election?

Again it appears from this far off shore, that the Australian election is somewhat mirroring the recent BC provincial election and not only because of the issue of LNG. The Labour PM Kevin Rudd returned to power after three years on the back benches,  coming back after the party dumped PM Julia Gillard.

Like BC, the Australian Liberal Party is really conservative. The Liberal Leader Tony Abbott, wants to abolish Australia’s carbon tax but Abbott is also threatening to fine companies that don’t lower prices if (or when) the carbon tax is abolished.

The polls show that the Liberal Party is leading, but that Kevin Rudd is more popular than Tony Abbott. Rudd is running an attack campaign against Abbott, warning of the consequences of an (conservative) Liberal victory. Sounds a bit like Christy Clark.

Given the split in the polls, with the leader of one party more popular than the leader of the party that is leading the polls, this video of the editors of The Australian which accompanies this story  shows their senior editors are awfully confident, perhaps over confident, about the polls. I know given what happened in BC, Alberta and even Israel, I’d be a lot more skeptical.

We’ll know the outcome of the Australian election by this time next week. As for LNG, given the volatility of the market, who knows?


(Editor’s Note: Tony Abbott and the Australian Liberal Party won a landslide victory in the weekend vote)

 (Note some of the Australian media sites appear to be metered and allow only one viewing)

RTA issues lockout notice, CAW responds with strike notice as Alcan smelter contract deadline looms

Negotiations between Rio Tinto Alcan and Canadian Auto Workers Local 2301 are going down to the wire. The current contact expires Monday, July 23.

The CAW says 96 per cent of members voted in favour of strike action during voting Thursday and Friday. The Local represents 1150 workers at the Alcan smelter. One of the main issues in the negotiations is a reduction in the workforce to 699.

CAW Local 2301 president Rick Belmont said the union received a 72 hour lockout notice this afternoon and the union responded with a strike notice.

RTA spokeperson Colleen Nyce says issuing lockout and strike notice is standard practice during negotiations.

Both sides say negotiations will continue through the weekend.

If there are picket lines it could be a confusing and possibly volatile situation because the Kitimat Modernization Project is on the same site with a work camp full of construction workers on RTA property.

Most construction workers are employed or contracted by Bechtel, the construction contractor and are not members of CAW 2301.

Bechtel, RTA want to bring in Foreign Temporary Workers for Kitimat Modernization Project

Updated with Rio Tinto Alcan statement and CAW negotiations bulletin

Bechtel logoRio Tinto Alcan and Bechtel are proposing to bring in temporary foreign workers for the Kitimat Modernization Project, because, according to a letter from Bechtel obtained by Northwest Coast Energy News, a “labour shortage” is “a possible risk to the project schedule.”

The letter was sent by Dawn Perry, Field Contracts Manager, to Bechtel/RTA contractors on April 30.

The key paragraph in the letter says

Over the past several months, Bechtel and RTA have been working with government agencies to understand and establish a process to bring Temporary Foreign Workers to the project in the event there is a shortage of qualified craft workers in British Columbia and Canada. The process will benefit Contractors on the KMP that may experience labour shortages.

The Bechtel letter does say the company is consulting with trades unions involved

It is imperative that we all work together to identify labour needs in advance to provide the Building Trades Unions sufficient time to provide qualified labour.

Bringing in temporary foreign workers, whether by RTA, Bechtel or a contractor,  must be approved by Citizenship and Immigration Canada.

In past news conferences, RTA managers have said there are problems in getting skilled workers or contractors for the $3.3 billion project, due to high demand locally from the proposed liquified natural gas projects and labour shortage as far away as the bitumen sands at Fort McMurray. On the other hand, there are continuing complaints from contractors who say that even trying to bid on a KMP project is a bureaucratic nightmare. There are also complaints that people from the Kitimat region that they are still are on waiting lists for jobs at KMP.

Rio Tinto Alcan logo

Colleen Nyce, a spokesperson for Rio Tinto Alcan in Kitimat said, “We actually hope to not have to hire temporary foreign workers. We prefer to hire from the local area and BC. This will, among other things, keep our costs down to hire from this jurisdiction.

“As of the present time, we have 54 per cent local workforce on the Kitimat Modernization Project. We are very proud of this. However, we are now entering the stage where, within the next four months we will be seriously ramping up the construction schedule and will need to hire qualified craft on a quick turn around basis.

“Since Notice to Proceed was given to KMP on December 1st, 2011, our Project burn rate is $3.1 million/day. We therefore cannot risk the project with workforce shortage issues and delays.

“As a precautionary measure, and given the length of time to receive government approvals, we made application for Temporary Foreign Workers, from the United States only, back in January. Our application for this has been supported by the unions affiliated with our project. We routinely have labour studies and labour surveys completed, as do the unions, and all intelligence is advising us that we will most likely be facing a skilled labour shortage.

Nyce says RTA is  looking at: “All craft – electricians, carpenters, pipefitters; operators to name a few. We must search across Canada first. We are partnered with 16 different building trades unions. All of these unions have connections and members across the province, country and some into the United States.”

The date of the letter is already causing concern in Kitimat, coming as it does at almost the same time as Rio Tinto Alcan presented Canadian Auto Workers Local 2301 with a series of tough initial contract proposals that would see all but the most core jobs at the aluminum smelter contracted out.

Nyce, however, says, “This has absolutely nothing to do with BC Operations negotiations with CAW Local 2301.”

RTA locked out 780 United Steelworker members at the Alma, Quebec, smelter on December 31. The USW says talks with RTA broke down over the use of subcontractors and contracting out. RTA says its over all aluminum production dropped 12 per cent to 520,000 tonnes in the first quarter of 2012, mainly due to the lockout in Quebec, where smelter production dropped by about two-thirds.

There are already rumours in Kitimat that the temporary foreign workers would be used to keep the Kitimat Modernization Project on schedule in the case of a lockout or strike at the smelter itself.


UPDATE: CAW Local 2301 has issued its latest negotiation bulletin.In the bulletin, the local expresses its feelings of betrayal after negotiating a transition agreement with the company in 2007.The number of jobs at the new smelter will drop from a miniumum of 850 (although 1,000 jobs was the figure used most often) to 699.

The company’s position on the modernized smelter was an insult to the Union, tore away any sense of credibility that may have existed and has set the stage for a collision at this set of negotiations.

Rio Tinto Alcan has presented the union with a long list of jobs that would be contracted out but where those contractors would be working alongside union members in the new smelter and nearby locations.

CAW 2301 is now considering its response to RTA. There are membership meeting this week.

The letter also comes at time when the national level of the Canadian Auto Workers is expressing doubts about the Conservative government’s push to increase the number of Temporary Foreign Workers.

In an phone interview, Ken Lewenza, president of the CAW, said Tuesday, “I am not totally convinced that there is a shortage of worker problem with a little under 10 per cent unemployment. The real problem is where is the work and how do we fit the skills of our Canadian work force to meet those particular requirements and if for any reason we can’t do that based on knowledge, based on recognizing the kind of skills that are needed and how you prepare workers who are working in precarious situations who are unemployed, how we can better prepare for these kind of work opportunities, I think what government is doing, employers contractors, are seeing foreign workers as the first priority when it should be that absolute last.”

As for the rumours that temporary foreign workers could be used to keep the KMP going or even become possible replacement workers, Lewenza said, “If foreign workers were to replace our members at 2301 at a time we’re in labour negotiations, as replacement workers, then that would lead to a huge confrontation, at a time when quite frankly it’s not necessary. The whole idea of bringing in foreign workers is if there is a shortage of labour, a labour disruption isn’t a shortage of labor, it’s a shortage of getting a collective bargaining agreement.”

The RTA contract proposals were also on the table at Monday’s District of Kitimat Council meeting, where Councillor Phil Germuth led off the discussion by saying that he was disappointed by the RTA proposals, saying that over the past several years council has granted RTA every variance and development proposal it wanted and has agreed to forgo $7 million in tax revenue for the Kitimat Modernization Project, and, “We were promised there was going to be about 1000 jobs, now they are down to 700. I find it hard to believe that they would propose 300 job losses and not expect any problems at all, This council and previous councils have been working with them and now to have another 300 jobs cut that’s a big disappointment.”

Sources have told Northwest Coast Energy News that some members of middle and upper management at the Kitimat smelter are also not happy with the contract proposals, which together with the Alma lockout, are bringing back a corporate culture clash between the former Alcan management and the different attitudes brought to Canada by Rio Tinto, a London based multinational.

Olympic medals

A group calling itself Off the Podium, led by former Olympian Bruce Kidd, is asking the London 2012 Olympic committee  (LOCOG)  to drop RTA as the official supplier of gold, silver and bronze for athletes’ medals.

Signed by Steelworkers National Director Ken Neumann, the complaint asserts that Rio Tinto’s actions in Alma violate the Games’ ethical procurement standards because they consist of an illegally-declared lockout, serious and significant violations of the workers’ health and safety, shirking its obligations by sub-contracting out work to low paid workers, and paying wages and benefits below industry benchmark standards.
Neumann’s complaint letter goes on to request that LOCOG follow its ethical guidelines to reject Rio Tinto as a supplier.


Bechtel letter to contractors
Bechtel’s April 30 letter to contractors about bringing in Foreign Temporary Workers