Oil Sands Truth: Shut Down the Tar Sands

Not enough Labour, Building entire Towns in the Tar Pits

Labour Pool Will Continue To Be Stretched As More Projects Come On Board
By Paul Wells //July 23 2007

The shear volume and complexity of large-scale projects planned or occurring in the oilsands combined with booming construction in other sectors in Alberta will only increase the strain on an already stretched labour pool, PennWell Corporation's oil sands and heavy oil technologies conference heard last week.

"If you look at what we have on the books right now in Alberta, we have 857 major projects totaling over $169 billion, including about $105 billion in oilsands development and that excludes some of the recent major infrastructure (projects) that have been announced by the province," said Stephen Kushner, president of Merit Contractors Association. Merit is an Alberta based not-for-profit association comprising of nearly 1,200 contractor member firms that employ over 32,000 people in commercial, institutional and industrial construction sectors.

"Right now in the construction industry, the holy grail is to get the right mix of workers that are available and willing to work on your project in sufficient numbers to build (these) energy projects on time and on budget. It's a huge task, an absolutely monumental task," he added.

Although some recent projections suggest that Alberta's construction industry will need an additional 40,000 workers by 2011, Kushner said that given the historical inaccuracy of such projections that forecast may well be underestimating the actual numbers that will be required.

"Forecasting is a huge challenge, an incredible challenge with the magnitude of projects that are announced ... and recognizing the demands placed on the construction industry from other sectors such as the residential sector, the commercial sector, the civil sector," he said.

"When you take a look at some of the previous workforce planning assumptions, on a lot of the major projects one of the things that seems to be a common thread is that in the planning stages they have been underestimating the number of people required," Kushner added.

"Most of the major projects, when they have actually got to the execution stage, their actual peak manpower requirements were significantly greater than what had been forecast. That's the trend and the history we've seen in Alberta, so those are some of the further challenges we have, even when we're doing the current forecasting."

Although Alberta has experienced economic boom periods and the resulting labour issues in the past, Kushner warns that this go-around is different in that the national construction sector labour force has more demands placed on it because Canada's overall economy is performing well.

"What we're facing right now is something that's unprecedented. If you look at other periods of boom, typically we had certain regions of the construction industry that have been hot and certain regions that have been cool and we've been able to attract people from those areas were there's been less employment opportunities," Kushner explained.

"The challenge that we're having right now is where we used to attract a lot of people from Atlantic Canada, now they have lots of job opportunities. Some of those are there, some of those are in other provinces -- British Columbia, Saskatchewan and even Manitoba, they're going strong."

Ramzi Fawaz, vice-president of projects for Shell Canada, said labour issues are a continual concern and a growing challenge as the Athabasca Oil Sands Project (AOSP) Expansion 1 project gains momentum.

"There are many challenges (including) labour shortages. We need 6,000 workers and ... it's proving to be a challenge to find those at the right time for stability and to man operations. It's a big challenge," Fawaz said.

"The availability of trades and engineering professional resources is also proving also to be a big challenge. We're working very hard to either find the right people to work on our projects, creating the right environment where the project becomes the project of choice for people to join us."

The 100,000 bbl per day AOSP mine and upgrader expansion, which should be in operation by 2010, is estimated to cost up to $12.8 billion.

Royal Dutch Shell Plc is operator of the Athabasca project with 60% , while Western Oil Sands Inc. and Chevron Corp. each have a 20% stake.

Like many of its oilsands brethren, Shell and its partners are going the extra mile in its efforts to entice would-be workers into the fold. For example, Fawaz said, the project's Albian Village will serve as a home away from home for many AOSP expansion workers.

"We've just commissioned the first phases of our Albian Village, as we call it. This is where we house our workers who work on the upstream side of our project, the mine side of the project," he said. It's a very good facility ... it's a large improvement of what we used to do in terms if labour camps previously."

The village, to be located 10 kilometres southeast of Shell's existing Muskeg River Mine, will accommodate 800 people in the first phase and in a second phase will be expanded to house another 1,660, for a total of 2,460.

Rooms will include flat-panel televisions, double beds and the majority will have semi-private bathrooms -- meaning it is only shared with one other room. As workers will be on shift rotations, the goal is to try and stagger the accommodations so that the two people sharing a bathroom facility will be on opposite rotations.

In addition, plans call for a hockey rink, baseball field and other recreational amenities will include a lounge, lecture hall and dining area.

"We're hoping this will be a project of choice by providing a home for our workers," Fawaz said. "This is one of the things we do to attract people to come and work at our sites."

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