The boom is off of the Alberta rose, with oil prices having plunged by more than 40 per cent in a matter of weeks and producers cutting dividends and capital expenditures as a result, but Larry Staples has seen it all before, and he says there’s one area of the oilsands that cannot take a hit—maintenance shutdowns.
Staples, an engineer by training who has worked in Alberta as a consultant since the mid-1970s and is now an adviser to the Construction Owners Association of Alberta (COAA), which represents most of the major companies involved in the heavy industrial construction and industrial maintenance sectors, says it really is different this time.
“In the old days, they shut the well in and hung out the ‘gone fishin’ sign,” he says. “But it is different now. Those big plants have to run, and they have to be maintained.”
2015 is expected to be a big year for oilsands maintenance.
Staples says that it’s unlikely the demand for workers in this area will change much from what was forecast in late May 2014 in a report his organization helped produce.
That report, Oil Sands Construction, Maintenance and Operations Labour Demand Outlook to 2023, projects that an estimated 93,380 jobs will be created over the next decade. In this context, “construction” includes the turnarounds workforce. The report was produced by COAA, the Petroleum Human Resources Council of Canada, BuildForce Canada and Alberta Jobs.
It concludes that the workforce required for on-site oilsands construction, turnaround and ongoing maintenance will be around 48,710 workers in 2014 and will increase to about 56,900 jobs in 2020, a 17 per cent increase over 2014 levels.
Staples says that in the current low oil price environment, ongoing maintenance and turnaround and shutdown work becomes even more critical than when prices are higher.
“The oilsands producers have their capital paid for, and they need to keep producing to keep the cash flowing,” he says.
“In the past, our forecasts were all about new construction, but the turnaround and shutdown sector is using the same workers, leading to cumulative demand for the skilled trades.”
Lance Wilson, branch head of labour market information and intelligence with the Government of Alberta, says that Alberta Jobs has started looking at the specific labour requirements in the oilsands turnaround, shutdown and maintenance areas because the sector demands a large number of skilled workers for decades going forward.
“Construction can be [variable], but turnarounds and maintenance happens two times a year, and it requires a huge workforce,” Wilson says.
The estimate is that there will be a requirement for 18,500 workers for spring 2015 oilsands turnarounds and 21,000 for the fall 2015 season, he says.
Although the time frame for the jobs can vary, the spring and fall turnaround seasons both average about four months.
Wilson says that shutdown and turnaround worker demand is expected to be slightly larger this year than in 2014, when 17,500 workers were needed in the spring and 20,000 in the fall.
In the past, his department may have been able to provide a schedule of which companies are doing shutdowns and turnarounds, but he said the federal Competition Act now doesn’t allow that information to be released (curtailment of production at a given operation would affect its production and possibly its stock price).
Dave Estabrooks, northern manager, Building Trades Alberta, which represents 75,000 skilled building trades professionals working in 21 affiliated unions in Alberta, says that most of the maintenance, repair and operations (MRO) work “is bought and paid for,” with financing already set aside, and will not be altered by the oil price drop.
Estabrooks says it is possible some companies may delay some MRO projects if prices remain depressed for a year or more, but they can only delay needed work for so long.
While also cautioning that federal laws forbid him from detailing all the shutdowns and turnarounds that will be going ahead in 2015, he says several projects are in the cards and contractors are staffing up for them already.
These include a major shutdown at Suncor Energy’s Firebag project, one at Canadian Natural Resources’ Horizon project, one at Shell Canada’s Albian Sands project as well as its Fort Saskatchewan upgrader and turnaround work on a Syncrude coker.
He estimates that at least 12,000 unionized tradespeople will be needed for those jobs this spring.