Return of oil and gas jobs? New pipelines and new technology are essential conditions

The headline of a Calgary Herald story on March 30 warns: “ Another 8,700 oil jobs are at risk if prices drop below US$50 for a sustained period, according to new study” .  Based on a labour market study by Enform consultancy,  the Herald states that this possible job loss would follow the loss of 52,500 direct jobs between 2015 and 2016, without even taking into account the job turmoil caused by the 2017 mergers and acquisitions in the Canadian oil sands: Canadian Natural Resources and Shell  ; Cenovus Energy and Conoco Phillips; and most recently, Enbridge and Spectra Energy  .

oil sandsThe original Enform study on which the newspaper article is based provides much more detail.  Labour Market Outlook 2017 to 2021 for Canada’s Oil and Gas Industry  was prepared by PetroLMI, a Division of Enform, and was partly funded by Canada’s Sectoral Initiatives program.  It reports that the oil and gas industry directly employed an estimated 174,000 workers at the end of 2016, (down by 25 per cent from the industry peak of over 226,000 in 2014). It forecasts job growth for two different scenarios – oil prices well above or well below  US$50 per barrel from  2017- 2021 .  The “modest recovery” scenario, (prices above US $50) ìs forecast to support an annual average of 554,000 direct and indirect jobs in the next five years; the “Delayed Recovery” is forecast to support 508,000 jobs.  The report provides detailed statistics by subsectors, occupations, and regions.  The report also notes the shrinking labour pool, as workers are discouraged from remaining or entering the sector, and as older workers retire.  Although the forecast expects limited job recovery in the next two years, it concludes that the peak employment levels will not return.  “Heading towards 2021 and beyond, accessing world markets via new pipelines will be critical for full job recovery. Equally important will be investing in technology, innovation and a highly-skilled and technical workforce to sustain the productivity and efficiency gains achieved in the last few years. These things will be critical if the industry is to compete globally and make a transition through carbon regulations.”  See the full suite of forecasts for the oil and gas industry, including the LNG industry, here .

 

 

National Energy Board Modernization – Hearings are underway

Public hearings by the Expert Panel on the Modernization of the National Energy Board   began in Saskatoon in January and will conclude in Montreal at the end of March (the schedule is here ).  With transparency and accountability a key concern about the NEB, it is surprising that no transcripts or submissions will be made available online, only government- prepared summaries . Fortunately, press reports are providing the public with some information:  an important example, a report by Andrew Nikoforuk from the Vancouver hearings appeared in The Tyee on  February 9, summarizing the testimony of Marc Eliesen, a former chair of Ontario and BC Hydro and a critic of the NEB since the 2014 Trans Mountain Pipeline hearings.  As quoted in  “Time to Reform Our ‘Captured’ National Energy Board, Says Expert” ,    Mr. Eliesen reiterated his earlier criticism that the NEB  a “captured regulator” that no longer operates in the public interest. “The attitudinal bias that stems from a close interaction between NEB board members, NEB staff and the energy industry, means the goals and aspirations of the Alberta energy sector have become those of the board.” Eliesen recommended that all current NEB board members should be replaced by people from a broader range of expertise, not just the oil and gas industry. He also recommended that the NEB’s head office be moved from Calgary back to Ottawa. In “How to Fix the National Energy Board, Canada’s ‘Captured Regulator’”  , DeSmog Blog (Feb 8) also summarized Eliesen’s testimony, as well as that of  Eugene Kung, staff counsel at West Coast Environmental Law.

Proposals for improving the discredited NEB have come from a Pembina Institute report:  Good Governance  in the era of low carbon: a Vision for a modernized National Energy Board   . From Pembina: “significant reforms to the NEB Act, and to the operating culture and practices at the Board, are required.”  The report lays out 9 essential conditions to transform energy regulation, including : “Energy regulators must be independent of bias and interferences from government and non-government stakeholders. …Energy regulators should proactively  and predictably support involvement of all interested parties and the public as a fundamental component of evidence gathering, decision-making and monitoring.”  Environmental Defence  has also weighed in with “Six key ways to modernize energy regulation in Canada”, and has also called for the restart of the Energy East Pipeline review process to wait until new rules for the NEB are in place. (the previous Energy East Review was declared void in January 2017).   The report and recommendations of the Expert Panel on Modernization of the National Energy Board is scheduled for  submission to the Minister of Natural Resources by mid-May 2017.

A whiff of the bias that so many have noted at the NEB continues, in one of the “related documents” provided at the Expert Panel website: the Interim Report of the Standing Senate Committee on Transport and Communications, titled Pipelines for Oil: Protecting our Economy, Respecting our Environment   (Dec. 2016).  It begins: “Petroleum pipelines, like highways, railways and power line corridors, are long established in Canada. They are instrumental to the quality of life and the standard of living we enjoy in Canada today. Pipelines have no equal when it comes to the safe, reliable and cost-efficient movement of petroleum over long distances. They are critically important to the creation of wealth in Canada and their use and development are in the public interest and the greater good of all Canadians.”  It pronounces on the concepts of social license, the public good, confidence in the regulatory process, then proposes an oil transportation strategy which includes pipelines and tankers.  From the conclusion:  “The Committee believes that new pipelines will act as a lifeline to the Canadian economy, which has been hard hit in the oil and gas sector. Pipelines to the east and west coasts will ensure that Canadian oil producers get the full value of this resource on world markets, reduce refineries’ dependence on oil imports and improve public safety. The Committee has made recommendations to Natural Resources Canada, Transport Canada, and Fisheries and Oceans Canada. The Committee believes that these recommendations will help form a strategy to improve public confidence and break the paralysis preventing the construction of pipelines in Canada.”

Finally, the National Energy Board Modernization process is underway

The Review process for the Modernization of the National Energy Board has begun.  The Terms of Reference  are here, summarized on the website as focussing on “ governance and structure; mandate and future opportunities; decision-making roles, including on major projects; compliance, enforcement, and ongoing monitoring; engagement with Indigenous peoples; and, public participation.” Twelve Discussion Papers are available   to guide input.  Comments can be submitted online here , with a deadline of  March 31, 2017;   cross-country “engagement sessions” for the public will begin in Saskatoon on January 25, and end in Montreal on March 29.  The Expert Panel will deliver its report to the Minister of Natural Resources, with a  May 15 deadline.     See an article in the  National Observer (Jan. 16) , which notes that the process launch comes amidst legal challenges: Two First Nations of Northern Ontario have named the National Energy Board and the government of Canada as defendants in their suit against TransCanada pipeline, for failing to consult with them before  allowing work on a 30-kilometre stretch of the pipeline that runs through their traditional territories  (details here) .  A second  court challenge was filed on January 10 by community group Transition Initiative Kenora, asking that the entire Energy East consultation process be voided and re-started, because of the conflict of interest allegations of the Charest Affair  in  Fall 2016.     (more details about the court challenge from Energy Mix here or from Ecojustice here  )

Kinder Morgan Pipeline approval: a new chapter in the struggle against pipelines

On November 29, the government of Canada announced  the highly anticipated decision   to approve the expansion of  two pipeline projects:   Line 3 (with 37 conditions) and the Kinder Morgan Trans Mountain Expansion pipeline project (with 157 conditions). The Northern Gateway project was finally, officially dismissed.

Reaction, focused on Kinder Morgan,  was swift and strong and very critical on many grounds: economic, environmental, and as a betrayal of the rights of First Nations.  The Globe and Mail summarized reaction and quoted a Stand.earth representative that the decision “signals the beginning of a new phase in the struggle against pipelines” – which will include protests, the courts, and the ballot box.  And immediately, on December 1, a rally to support the Dakota Access Pipeline protests expanded to include Kinder Morgan protest, with over 1000 people on the streets of Victoria, B.C., according to the National Observer.  See also “Trudeau’s pipeline approvals spark protests” , which quotes the president of the Canadian Union of Postal Workers: “”You can either be serious about climate change, or you can expand the tarsands. But you cannot do both.”  Others have written with the same message: UBC Professor Kathryn Harrison in the Globe and Mail   ; Simon Donner  in  “Blowing the Budget on Pipelines”  (Nov. 30) in Policy Options;  Seth Klein and Shannon Daub of the Canadian Centre for Policy Analysis (CCPA) in a Policy Note article, “The New Climate Denialism“;  Tzeporah Berman, “Pipelines of Paris: Can Canada have its cake and eat it too? “. David Hughes’June 2016 report, Can Canada Expand Oil and Gas Production, Build Pipelines and Keep Its Climate Change Commitments? is again being widely cited.

The same message comes from a a Dec. 13 article, “ With Oil Sands Ambitions on a Collision Course With Climate Change, Exxon Still Stepping on the Gas”  by Inside Climate News (the Pulitizer Prize winning news organization whose reporting has sparked the current U.S. investigations into Exxon).  This highly detailed historical look at Imperial Oil investments and operations in Canada (complete with photos of Murray Westgate), concludes by noting the recent pipelines approvals, and states:  “Canadian officials, who have committed the nation to emissions cuts, continue to promote growth, even though environmentalists say the two are incompatible….Politicans are not being honest with Canadians.”

orcas-against-vancouver-skylineOpposition in the courts – with seven cases already underway – is being led by First Nations.  In an OpEd in the Globe and Mail, Grand Chief Stewart Phillip of the Union of British Columbia Indian Chiefs wrote: “ Prime Minister Justin Trudeau failed to protect the health and safety of Canadians or uphold his government’s vaunted new relationship with First Peoples when he announced approval for the Trans Mountain pipeline expansion.”  He stated that there are  more than 10,000 “Coastal Protectors”   who are ready “to do what needs to be done to stop Kinder Morgan”. This is in addition to  the Treaty Alliance Against Tar Sands Expansion  formed  by 50 First Nations and tribes from all over Canada  and the Northern U.S. in in September 2016 – now over 100 –   to work together to stop all proposed tar sands pipeline , tanker and rail projects in their respective territorial lands and waters. And see  DeSmog blog,  “ Federal Liberals Approval of Kinder Morgan Is Final Nail in the Coffin of ‘Reconciliation’ . For a first-person account of First Nations reactions and mobilization, see “Field notes: A week of pipeline action and cross-Canada solidarity” from West Coast Environmental Law.

From Greenpeace :  “With this announcement, Prime Minister Trudeau has broken his climate commitments, broken his commitments to Indigenous rights, and has declared war on B.C. If Prime Minister Trudeau wanted to bring Standing Rock-like protests to Canada, he succeeded.”    Similarly, Common Dreams published  “Kinder Morgan Pipeline Might Be Canada’s DAPL ” (Dec. 4) , and  from ThinkProgress  , ” The next Standing Rock: Fossil fuel battles loom across North America“.

Representing reaction from ground zero, British Columbia:  The B.C. office of the Canadian Centre for Policy Alternatives blogged: “Trudeau disappoints a generation, betrays rights and title of Indigenous people with Kinder Morgan decision” .  Andrew Nikoforuk wrote in  The Tyee , “Kinder Morgan Approval Insults Democracy, Science and Economic Logic”   (Nov. 30) , that the decision “put his government on a collision course with First Nations and British Columbia’s coastal communities.” Robyn Allan, quoted by Nikoforuk, states:  “Trudeau has out-trumped Stephen Harper.”

 

Why has the Dakota Access Pipeline become a divisive issue for U.S. Labour?

Protests against the Dakota Access Pipeline in North Dakota are continuing, according to Democracy Now on October 7.  On October 5, three U.S. federal judges heard arguments  over whether to stop the construction, but they are not expected to make a ruling for three or four months.  Meanwhile, Jeremy Brecher of the Labor Network for Sustainability released a new post , Dakota Access Pipeline and the Future of American Labor,  which asks “Why has this become a divisive issue within labor, and can it have a silver lining for a troubled labor movement?”  The article discusses the AFL-CIO’s  statement  in support of the pipeline, and points to the growing influence of the North America’s Building Trades Unions’ within the AFL-CIO through their campaign of “stealth disaffiliation”.  It also cites an “ unprecedented decision” by the Labor Coalition for Community Action,  an official constituency group of the AFL-CIO , to issue their own statement in support of the rights of the Standing Rock Sioux Tribe, in direct opposition to the main AFL-CIO position. The Climate Justice Alliance, an environmental justice group of 40 organizations, has also written to the AFL-CIO in an attempt to begin discussions.  Brecher’s article concludes that the allies and activist members of the AFL-CIO are exerting increasing pressure, and asks “Isn’t it time?” for a dialogue which will shift direction and build a new fossil-free infrastructure which  will also create jobs in the U.S.    For unions interested in supporting the protests against the Dakota Access Pipeline, a sample resolution for local unions is available from the Climate Workers website.