Tuesday, March 1, 2016

Bottom of the Barrel

The world is drowning in oil, leaving Canadians and their governments drowning in debt. For people in the oilsands, it’s adapt or go broke

“Loonie hits lowest level since 2003 as Canadian oil trades below $20 US a barrel.”

“The death of the Alberta dream.”

“Alberta feels oil price pain.”

“Life at $20 a barrel.”

This sampling of headlines in January 2016 echoes what the papers have been saying for months. Canada’s oil patch is in trouble.

Less than two years ago, oil was $100 per barrel. Companies couldn’t build projects, pump oil, and find workers fast enough to meet demand.

How quickly things change.

In January 2016, oil was hovering in the $30 per barrel range. Unemployment has soared in oil-dependent provinces. Bankruptcy and consumer debt are climbing, and salaries and housing prices are dropping.

Running through the headlines is the common theme of what the drop in the price of oil means for the Canadian economy. More importantly, what does it mean for workers in the oil patch? After all, the economy is not just dollars and cents. It’s jobs and lives and families—including those of thousands of CLAC Local 63 members.

As the largest union in the construction of the oilsands, the downturn in oil prices has hit Local 63 members hard.

Neil Thomson is a journeyman electrician and steward employed by Basilian Industrial Services Ltd. He, along with many workers in northern Alberta, hails from the east coast, where jobs are scarce—and high-paying jobs even scarcer.

For the past two-and-a-half years, Neil has worked on ConocoPhillips’ Surmount 2 site. It’s the largest single-phase steam-assisted gravity drainage (SAGD) project ever undertaken. Work on the megaproject began in 2010, and in September 2015, oil began to flow.

But with construction of the project drawing to a close, workers are getting nervous.

“Layoffs are on everyone’s mind,” he says. “The typical conversation centres around who’s going. With most of the guys that have left, a few have found work, but I would say the majority are not working, and everybody knows that. We know that when we start a job, we’re eventually going to be done, and you just hope you can find something else quick. But it’s not so easy these days.”

For Neil, who is a steward, the end of a shift may mean bringing someone back to camp and letting them know they won’t be coming back.

“I probably know 250 to 300 guys here—I know them all by name. It’s the best part about being a steward. But the worst thing is taking guys back to camp and telling them they’re laid off. When I first became a steward, I really didn’t know everybody. Now, I’m taking buddies back to camp that I know—fellas that I eat supper with every day—and all of a sudden I’m telling them that they’re done. It gets hard because you develop a lot of friendships here. You spend two-thirds of the year with these guys—more time than you spend at home—so you develop some close friendships.”

Neil himself is near retirement, so the prospect of a layoff does not worry him. “My goal in life was always to retire at 55. I’m 56 now and a year over my goal. But at my age, my commitments are done; my kids are grown up. I come out here to work, and this is just extra money for me for the toys I’d like to have—and to pad my wallet a little more. I’d like to work for another few years, but if I don’t, that’s okay.

For some of the younger workers on site, it’s a different story. The downturn and layoffs have been a disaster.

“Some of the fellas come out here and they start making big money and they start spending it,” says Neil. “Then they’re in debt, and they don’t have a choice—they get used to that lifestyle, and they’re stuck here.”

During the boom, many tradespeople were making six-figure salaries. Plus, because they lived in camps for two-thirds of the year, their living expenses were low. Some saved the money. But others did not. Some because they have families and other commitments to support back home. Others because they never considered the need to save and bought big trucks, big homes, and big televisions instead. They didn’t save for a rainy day because at the time, it seemed like the boom would go on forever.

Daniel Gallagher has worked in the oil patch for seven years, and he’s seen it happen all too often. “People buy things believing their future will never end here,” says Daniel, a pipefitter, steward, and safety officer who is also employed by Basilian. “The layoffs hit them really hard.”

What does the future hold? Is it all doom and gloom? There’s no guaranteed prediction of where the market is heading. No one saw the downturn coming, and the price of oil could swing back up just as quickly, although no one is predicting that it will.

Oil is a commodity that’s very susceptible to fluctuations caused by the strength or weakness of global economies, leading to ups and downs in supply and demand. It’s also susceptible to wild card geopolitical forces, such as turmoil in the Middle East or with Russia, two major suppliers of crude.

These ups and downs are exaggerated by people’s general tendencies to view downturns and boom times as being worse/better than they actually are. Adding to the sense of doom and gloom, or euphoria, are sensationalist headlines quoting extremist predictions by “experts.” Regardless of how long the current downturn will last or where the market is headed long term, Jay Bueckert, CLAC’s Fort McMurray regional director, sees a growing trend in construction work on the oilsands.

“We’ve reached a turning point,” he says. “We’re getting closer to the end of megaprojects. Construction jobs today look different than they did three or four years ago.”

In the past decade, thousands of workers have constructed numerous oilsands megaprojects. Each project took billions of dollars, years of construction, and employed thousands of workers at any given time.

“There are not a lot of big projects on the books,” says Jay. “It’s a lot of smaller projects, shorter durations, and smaller crews. Where the opportunity lies now is in the maintenance work. Once these projects get built, they need people to maintain them.”

Bitumen, and the processes used to extract it, are very hard on machines and facilities. Parts need constant monitoring, repair, and replacement. It’s a tough, messy job that requires a lot of skilled labour.

“We’ve got plenty of guys who are used to the industrial construction world,” says Jay. “But we would like to see them start to consider what their lives might look like once these projects have been completed. We need them to be ready for maintenance jobs.”

Neil agrees, but sees one problem. “There’s work there if you really want to travel. The big thing is the flights. There’s no flights this time for the maritime crowd to find work out here. A lot of guys won’t pay for their own flights.”

When times were good, most collective agreements had provisions in which companies covered travel costs to the remote site from workers’ hometowns. But companies are no longer competing for workers. Many cannot afford to pay for flights. Logic dictates that $30 oil means the end of travel packages, and this has hit east-coast workers the hardest. For workers from Alberta, the loss of travel packages is easier to swallow. Richard DeWolfe is a first-year apprentice steamfitter-pipefitter and a steward employed by AM-CAN Construction Labour ULC working at Canadian Natural Resources’ Horizon Oil Sands project. He originally comes from Halifax and thinks workers will accept packages without travel compensation to keep working.

“There’s no money back home,” he says. “A lot of people will still come out west because they need the work. Obviously, they’ll look first for jobs with flights, but if not, they’ll take the second best thing. Home is not an option for many. There’s a bit of work, but you can’t have the lifestyle you have now on the money you make there.”

No matter which province they come from, seasoned workers agree that if you want to keep working, one of the keys is having a diverse skill set.

Ian Stewart, an equipment operator employed by Golderado Contracting Corp., has been in Alberta since 1989. He’s lived through booms and busts before.

“It’s always a battle,” he says. “The way jobs go nowadays, you don’t get into a field and stay there for the rest of your life. You tend to change professions three, four, even five times maybe. If you’re not willing to adapt, you’re not going to work.”

For Ian, that means knowing how to operate all types of equipment—from small skidsteers to large excavators. Within his profession, he can take on a variety of jobs and avoid early layoff. He counts himself lucky for being able to pursue and gain the training through the various companies he’s worked for.

Some companies are not as interested in training workers as others, making it hard for workers to gain the skills they need for other work or to move up the ladder and grow their careers. Paul Saunders, a skilled labourer also employed by Golderado working on Surmount 2, is a master at adapting. He has done everything from construction to massage therapy. And within construction, he’s done a variety of jobs, including quality control, labourer, hazmat, and safety.

“There’s always opportunity; there’s always something,” he says. “It’s just a matter of not being fixed in your thinking. If you are, you’re in trouble. You have to be willing to change perspectives and be able to say, okay, this field is grinding to a halt. What else is there? Where can I go to challenge myself? What’s something I can do that I’ve never done before?

“All work is a blessing once you keep that mind-set. Every job has boring times and repetition, no matter what you do. You have to decide, do I want to grow? Do I want to take a chance? Am I willing to look at things as if everything’s new, everything’s different?”

Paul’s advice to those caught in the oil price downturn and suddenly looking for work: “Find something you’re in to and go chase it. Sometimes, you have to sacrifice money, but you’ll find something interesting and you’ll grow. If you get stuck in one thing, you won’t grow—and you won’t work. You’ll just get old and grumpy.”

With oil prices hitting the bottom of the barrel, most workers realize they don’t have a choice. It’s adapt or go broke. Until the next oil boom.