TransCanada Corp. added dimensions of buy-Canadian and union-made Thursday to the Energy East proposal for partial conversion and extension of its national natural gas Mainline to oil service from Alberta to the Atlantic Coast.
An agreement unveiled in Ottawa pledges construction work on the C$15.7 billion (US$12 billion) project will be awarded to the Pipe Line Contractors Association of Canada, which represents union shops.
The memorandum of understanding includes four of the principal crafts involved in pipeline installations: the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Labourers International Union of North America, International Union of Operating Engineers, and Teamsters Canada.
A TransCanada statement also promised, “Additional unions across the country will also be engaged to complete this work.”
Company president Russ Girling added, “We are committed to hiring the best workers this country has to offer for the over 14,000 jobs Energy East will create annually across Canada during the nine years it will take to develop and build the pipeline.”
Girling also described the agreement as assuring the highest safety and quality standards will be followed by the project.
Plumbers and pipefitters vice-president John Telford called the labor agreement a “historic step for the benefit of Canadians and the Canadian middle class.”
Operating engineers director Lionel Railton predicted, "Beyond the significant number of jobs this project will create through its first few years, there are over 3,300 direct and indirect jobs that will be created annually during the first 20 years of operations. These jobs can't be ignored and they ensure a basis for strong work opportunities for our membership decades into the future.”
Teamsters official Gary Kitchen likewise pointed spin-off work that the project is bound to generate far beyond the construction right-of-way: “Work across our membership such as trucking and transportation, construction materials, manufacturing, food services, airlines, hotels, automotive and communications will all benefit from the construction of the Energy East project.”
Pipeline contractors association executive director Neil Lane described the Energy East work pledges as Canadian “nation building” in a way that supports roles his group’s members have played in pipeline installation for more than 60 years.
In Oakville, an Ontario industrial center, local operating engineers chief Mike Gallagher reported that a training center has already been set up to provide three-week courses in running specialized pipeline construction hardware.
TransCanada reported spending on Energy East regulatory activities and work preparations has reached C$800 million (US$616 million) since the project was announced in 2013.
The new labor agreement, on top of nearly 2,000 meetings and open houses, responds to widespread feelings in Ontario and Quebec that safety, environmental and utility cost risks associated with Energy East outweigh its potential benefits.
The Ontario Energy Board (OEB) documented the skepticism in a report to the provincial government, as guidance for intervening in forthcoming Energy East hearings before the National Energy Board.
After canvassing interest groups, municipal leaders, community representatives and aboriginal settlements, the OEB concluded, “the pipeline will result in only modest economic benefits for the province.”
The OEB report, completed in mid-2015, said, “As with all pipelines, the benefits will largely accrue to the region producing the goods going into the pipeline and the region taking the goods out of it. This leads to an imbalance between the economic and environmental risks of the Project, and the expected benefits for Ontarians.”
Unlike the pipeline contractors and unionized workers, the provincial agency did not accept TransCanada’s case that the 1.1-million b/d pipeline conversion and extension will make contributions to livelihoods and tax revenues that outweigh popular concerns.
The OEB said, “While there may be economic benefits, Energy East has costs and risks that Ontarians, and the province’s natural gas consumers, do not currently have to bear. As a result, their concerns about access to natural gas, pipeline safety and the natural environment assume an increased importance.”