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Sharing the labor pains Northwest Territories cabinet minister hopes to work collaboratively with Alaska to solve aging workforce, tightening labor market Gary Park For Petroleum News
In a hands-across-the-border offer, Northwest Territories Industry Minister Brendan Bell is ready to work “collaboratively” with Alaska to find answers to the labor crunch that would hit both jurisdictions if the two Arctic gas projects proceed back-to-back.
As part of a five-day oil and gas trade mission to Alaska, Bell planted the idea with Gov. Frank Murkowski and several other political, Native and business leaders in the state.
He told Petroleum News he found a shared concern over an aging workforce and a tightening labor market and a willingness to share “best practices.”
Bell said Murkowski agreed to hold further discussions on several issues, including cross-border job credentials and an effort to “convince unions to work with us.”
Although it will be impossible to avoid importing labor, the first priority is to “train our own people and make sure they can take advantage of job opportunities,” he said.
To that end, Bell was intrigued by Alaska’s goal of setting aside 15 percent of public works projects for apprenticeship trainees, an idea he plans to explore in the NWT.
Mackenzie work limited to three seasons Because construction on the Mackenzie pipeline will be limited to just three seasons, not sufficient to support an apprenticeship program, he is making a case for sharing the labor pool for the two pipelines, provided there is agreement from unions over cross-border credentialing.
Bell also wants to impress on unions the importance of support for hiring northern aboriginal people.
The most recent labor statistics indicate the NWT has only 1,300 unemployed residents — far short of the number that will be needed for the Mackenzie construction — from a population of 42,000.
On one topic there was complete agreement, Bell said: “We put to rest once and for all” any suggestion that the Mackenzie and North Slope projects are in competition.
He said the real competition will more likely come from imported liquefied natural gas, which puts added pressure on the two governments to work co-operatively to find ways around escalating costs.
However, he said there is no prospect of piggy-backing steel orders because the larger Alaska line will need pipe from overseas while the Mackenzie will do its buying from Canadian manufacturers.
Where Alaska was in the 1970s On a broader basis, Bell said the development of NWT resources is currently where Alaska was in the 1970s.
He said the business members of his delegation had taken the chance to learn what Alaska had done well and what it might do differently if it had that chance again.
Bell left with the impression that the state had taken “good advantage” of its oil industry to ensure that benefits accrued to all Alaskans, particularly natives.
The Alaska Permanent Fund is a “very exciting” concept in ensuring a sustainable benefit from resource development and was an idea the NWT would raise with the Canadian government in negotiating a devolution agreement that would give the NWT greater control over its resources and direct access to the revenues, Bell said.
Despite the hurdles yet to be cleared, Bell said the Mackenzie project is “going very well” in its first three months before regulators.
“It helps that people cam see something happening,” he said. “That makes it more and more real that the project will be done.”
NWT looking for federal ratification Of the unfinished items, he has been encouraged by the “refreshing” approach taken by Canada’s newly appointed Indian Affairs and Northern Development Minister Jim Prentice since he inherited the Mackenzie file.
Prentice has a solid grasp of the “big energy picture” and understands how vital gas from the U.S. and Canadian Arctic will be, Bell said.
For the NWT, the earliest proof of Canadian government backing for the Mackenzie project will occur if the federal cabinet ratifies a promise made by the previous Liberal administration to establish a C$500 million fund to cover some of the social and economic impacts of a pipeline, said Bell, who is hoping for a decision in April.
He said talks are also under way on a fiscal regime that could include C$1.2 billion in federal “enhancements” to ensure the project is economically competitive.
Over the longer haul, he is pressing for the federal government to “step up to the plate” with financing for the completion of a road to the Arctic Ocean to help spur additional oil and gas and mining investment.
Bell said the fact that the Deh Cho First Nations are still in negotiations with Imperial Oil on benefits and access agreements is a “good sign. … They want to get the best possible deal, so they’re going to negotiate hard.”
But he cautioned that the Deh Cho can’t hold out much longer “without jeopardizing the project,” noting they face a June 30 deadline to join the Aboriginal Pipeline Group, which hopes to secure a one-third equity position in the pipeline for aboriginal communities.
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