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In front of a government panel on Tuesday, a labour group argued in favour of increasing refining operations in Alberta, instead of sending unprocessed bitumen to foreign refineries.

Alberta Federation of Labour president Gil McGowan told the province's Standing Committee on Alberta's Economic Future that upgrading bitumen locally should be a top priority for resource development and job growth.

The committee was debating whether or not Alberta should renew the Bitumen Royalty in Kind program, where the province receives oil from producers instead of royalties and then uses that bitumen to feed upgraders.

Under BRIK, the program has created capacity to upgrade up to 75,000 additional barrels per day. Established by former premier Ed Stelmach in 2007, Stelmach pledged to upgrade 72% of Alberta's bitumen locally by 2016.

Although a new, $5.7 billion refinery is currently being built near Redwater, no new refinery has been built in Alberta since 1984, despite the sudden demand for Canadian oil.

A refinery that would have been operated by several First Nations bands was dismissed by the government in early 2012, after the project's proponents failed to impress the province with their business model.

There is also talk about creating a pipeline linking the oilsands to refineries in Ontario, Quebec and New Brunswick. However, McGowan and the AFL have focused most of their criticism towards pipelines that aim to send bitumen to foreign refineries.

"This is the time to be investing in the long-term prosperity of this province," said McGowan. "75,000 barrels per day may sound like a lot, but it's really little more than a drop in the bucket."

The AFL has continually argued against projects like the proposed Northern Gateway and Keystone XL pipelines. McGowan says most of the jobs created would be short-term, temporary jobs and would only provide job growth to refineries in the United States and Asia.

Government reports obtained by the AFL through freedom of information requests show exporting bitumen provides a 35% return in value, while locally upgrading synthetic crude captures 70%.

After Premier Alison Redford told Albertans that the upcoming budget would see a $6 billion loss in resource revenue – a phenomenon she called a "bitumen bubble" – McGowan has repeatedly asked the province to look into domestic refining.

"The latest government projection is that we will only be upgrading 26% of our bitumen by 2020," said McGowan. "Something needs to be done to turn this ship around."

Although Redford told Albertans that her province would be facing "tough decisions" to solve the province's current financial woes, McGowan says the bitumen bubble may offer a silver lining.

"The price of bitumen is low right now because we're flooding the market with bitumen," McGowan told Today in early February.

"The solution they're proposing is building more pipelines to flood the market even further. That's just not how markets work," he said. "We need to refine the bitumen here, so that we're selling what the international markets want: synthetic crude."

Fort McMurray Today, Thursday, Feb. 28, 2013
Byline: Vincent McDermott

In front of a government panel on Tuesday, a labour group argued in favour of increasing refining operations in Alberta, instead of sending unprocessed bitumen to foreign refineries.

Alberta Federation of Labour president Gil McGowan told the province's Standing Committee on Alberta's Economic Future that upgrading bitumen locally should be a top priority for resource development and job growth.

The committee was debating whether or not Alberta should renew the Bitumen Royalty in Kind program, where the province receives oil from producers instead of royalties and then uses that bitumen to feed upgraders.

Under BRIK, the program has created capacity to upgrade up to 75,000 additional barrels per day. Established by former premier Ed Stelmach in 2007, Stelmach pledged to upgrade 72% of Alberta's bitumen locally by 2016.

Although a new, $5.7 billion refinery is currently being built near Redwater, no new refinery has been built in Alberta since 1984, despite the sudden demand for Canadian oil.

A refinery that would have been operated by several First Nations bands was dismissed by the government in early 2012, after the project's proponents failed to impress the province with their business model.

There is also talk about creating a pipeline linking the oilsands to refineries in Ontario, Quebec and New Brunswick. However, McGowan and the AFL have focused most of their criticism towards pipelines that aim to send bitumen to foreign refineries.

"This is the time to be investing in the long-term prosperity of this province," said McGowan. "75,000 barrels per day may sound like a lot, but it's really little more than a drop in the bucket."

The AFL has continually argued against projects like the proposed Northern Gateway and Keystone XL pipelines. McGowan says most of the jobs created would be short-term, temporary jobs and would only provide job growth to refineries in the United States and Asia.

Government reports obtained by the AFL through freedom of information requests show exporting bitumen provides a 35% return in value, while locally upgrading synthetic crude captures 70%.

After Premier Alison Redford told Albertans that the upcoming budget would see a $6 billion loss in resource revenue – a phenomenon she called a "bitumen bubble" – McGowan has repeatedly asked the province to look into domestic refining.

"The latest government projection is that we will only be upgrading 26% of our bitumen by 2020," said McGowan. "Something needs to be done to turn this ship around."

Although Redford told Albertans that her province would be facing "tough decisions" to solve the province's current financial woes, McGowan says the bitumen bubble may offer a silver lining.

"The price of bitumen is low right now because we're flooding the market with bitumen," McGowan told Today in early February.

"The solution they're proposing is building more pipelines to flood the market even further. That's just not how markets work," he said. "We need to refine the bitumen here, so that we're selling what the international markets want: synthetic crude."

Fort McMurray Today, Wednesday, Feb. 27, 2013
Byline: Vincent McDermott

 Edmonton – The Alberta Federation of Labour applauds the Obama administration’s decision to delay the Keystone XL pipeline, saying it will give the Redford government an opportunity to pursue value-added opportunities here at home, rather than shipping unprocessed bitumen south for upgrading.

“There’s been a parade of Alberta government ministers travelling to the States to sell unprocessed bitumen. Now perhaps those same ministers can stay in Alberta and consider our needs and our future ahead of those of our neighbours south of the border,” says Gil McGowan, president of the Alberta Federation of Labour (AFL), which represents 145,000 workers.

“Upgrading more bitumen in Alberta will help our province in many ways. Increasing value-added industries will provide quality, long-term jobs for Albertans and Canadians. While good relationships with our neighbours are important, the government of Alberta must promote the long-term health of our province first. Increasing value-added energy industries in Alberta will increase revenues from royalties and taxes,” he says.

“As bitumen is upgraded and moved up the value chain, more funds will flow into the Treasury through higher royalties on finished products. This is money that can be used to pay for important public services like health care and education,” says McGowan.

McGowan took particular exception to the Wildrose Party’s reaction to the delay of the Keystone XL pipeline.

“The Wildrose Party was playing fast and loose with the facts in their media release today. They should avoid fear mongering. The truth is that this pipeline is bad news for quality jobs and bad news for royalties,” says McGowan.

“Danielle Smith is trying to convince us that we’ll lose billions in royalties if the Keystone XL pipeline isn’t approved, but the opposite is true. If we export unprocessed bitumen, we ruin a great competitive advantage,” says McGowan

“The National Energy Board notes that, ‘wide differentials provide refiners with an economic incentive to build heavy oil conversion capacity.’ If we get rid of the prices differential between our bitumen and global crude, we destroy future opportunities to boost our value-added industries,” he says.

“In this context, Albertans should see the Obama administration’s decision as an opportunity, not a disappointment. It is an opportunity for us to move up the value chain and create a more prosperous and stable economic future for Albertans.”

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Media Contact:

Gil McGowan, President, Alberta Federation of Labour @ 780-218-9888 (cell)

In approving the Keystone pipeline expansion, the National Energy Board (NEB) was not persuaded the project would threaten potential upgrading jobs in Alberta, the board ruled in a 98-page decision.

As reported last week, a three-member panel of the board allowed the application by TransCanada Keystone Pipeline GP Ltd. to expand the Canadian leg of its Keystone pipeline, ultimately boosting capacity by 156,000 bbls per day, to a projected 591,000 bbls, from the previously-projected 435,000 bbls per day (DOB, July 18, 2008).

During the NEB hearing on the matter, a lawyer for the Alberta Federation of Labour (AFL), one of several intervenors, argued the NEB lacked sufficient evidence on the "more important question of broader impacts on value-added production in Canada." Yet, on that point, the board said it had all the evidence it needed to decide the matter.

Turning to the merits of the AFL's argument, the board said it was "not persuaded ... that approval of the Cushing Expansion might mean a lost opportunity to generate thousands of permanent full-time jobs in Canada, particularly in light of Keystone's evidence that the expanded ... pipeline would have the capability to ship a full range of crude oil products including synthetic crude upgraded in western Canada, and could, if required, be modified to carry refined products."

The labour group, representing more than 100,000 unionized Alberta workers, also argued that, given the unsettled nature of public (i.e. government) policy at the moment, the board should deny the application or delay a decision until more information on Canadian energy policy objectives becomes available. Alternatively, the AFL argued the board should wait until more evidence could be gathered on the "value-added" aspects of the project.

On the topic of energy policy, the board ruled it could make a well-informed public interest decision, "notwithstanding the AFL's view that energy policy may continue to evolve." As for waiting for further evidence on value-added aspects, the board said it considered the "fact that no government body, refiners or upgraders expressed opposition to the application."

No one at the AFL's Edmonton offices was available to comment on the matter by press time this morning.

Daily Oil Bulletin, Mon July 21 2008
Byline: James Mahony

The National Energy Board has approved the TransCanada Keystone Pipeline GP Ltd. Cushing application to expand the Canadian portion of the Keystone pipeline.

The expanded facilities will allow Keystone to increase its transportation capacity by 24,800 cubic metres per day, equivalent to 156,000 bbls per day. The overall transportation capacity will increase from the previously projected 435,000 to 591,000 bbls per day.

The Canadian portion of the Keystone pipeline will extend from Hardisty, Alberta to a point near Haskett, Manitoba. The expansion, consisting of seven new pump stations, increased motor sizes at seven pump stations, and the addition of pumping units at 13 previously approved pump stations, has an estimated value of $348 million.

In making its decision, the NEB heard from intervenors on several issues. The Metis Nation - Saskatchewan stated that Keystone failed to identify it as an interested stakeholder and to provide information at the start of project consultation. The Alberta Association of Pipeline Landowners and the Hadwin Cattle Co. Ltd. expressed concerns related to land use, including noise impacts. The Alberta Federation of Labour stated that the project could have negative consequences for domestic industries and employment.

The NEB said it was generally satisfied with Keystone's consultation efforts with stakeholders. In order to monitor ongoing consultation efforts, the NEB directed Keystone to provide further updates on its consultation with all potentially affected persons and groups, including the Metis Nation - Saskatchewan.

The NEB also directed Keystone to provide information from the detailed comprehensive noise assessment to the Alberta Association of Pipeline Landowners and the Hadwin Cattle Co.

On balance, the NEB determined that the Cushing Expansion will likely provide a positive economic benefit for Canadians. The NEB also determined that Keystone's proposal is consistent with tolling and tariff requirements of Part IV of the NEB Act.

Daily Oil Bulletin, Fri July 18 2008

EDMONTON-Alberta Premier Ed Stelmach got some help from the National Energy Board (NEB) yesterday when they decided to quietly release their approval of the controversial Alberta Clipper super pipeline late on a Friday afternoon - obviously hoping for as little media attention as possible.

But regardless of the way the announcement was made, the fact remains that the decision has serious - and very negative - long-term implications for Albertans, says Gil McGowan, president of the Alberta Federation of Labour.

"This is the second major bitumen pipeline to be given approval by the NEB in the last six months," says McGowan. "The Keystone pipeline was approved in September. The Alberta Clipper was approved yesterday. And a third pipeline called Southern Lights was approved earlier this week that will carry lubricant from Chicago up to Alberta. This lubricant is designed to make raw oil sands flow more easily down pipelines.

"Taken together, these three pipelines will provide the plumbing necessary to export about 1.4 million barrels of raw oil sands per day to refineries in the American mid-west and Gulf coast. That means that almost all of the expected increase in oil sands production between now and 2015 could be carried away in those pipes. But it won't be just raw bitumen going down those pipelines - we'll also be losing thousands of high-paying upgrader and refinery jobs."

McGowan says he's not particularly surprised that bureaucrats at the NEB approved the application from Enbridge Inc. to develop the Alberta Clipper. What does surprise him is Premier Ed Stelmach's apparent lack of interest in the issue.

"This is the guy who, when he was running for the Conservative leadership, said that allowing raw bitumen to be exported without first upgrading or refining it in Alberta was like 'a farmer selling off his topsoil'," said McGowan.

"He's also the guy who in a recent Conservative television ad said very clearly that - and this is a direct quote from the Premier himself - 'we'll ensure our oil sands are upgraded right here.' So what's the deal, Ed? If you're so dead set against sending Alberta jobs down the pipeline, why haven't you even raised a finger to put restrictions on pipelines that everyone knows will do just that?"

McGowan says the AFL is not opposed to all new pipelines - as an exporting province, we obviously need mechanisms to get our products to markets. What the AFL is opposed to are pipelines that will be used almost exclusively to transport raw bitumen - as opposed to upgraded crude or refined products like gasoline and diesel. McGowan says that evidence presented in NEB hearings - which the Stelmach government didn't even bother to attend - clearly shows that the Keystone and Alberta Clipper pipelines will be nothing
more than "bitumen super-highways."

"Premier Stelmach has spewed a lot of rhetoric on this issue," said McGowan. "But action speaks louder than words. And Stelmach's inaction on this issue speaks volumes about where he really stands. It's clear that he's simply not willing to stand up to Big Oil.

"These companies clearly have a plan to send massive amounts of unrefined bitumen to refineries and upgraders in the U.S. And, in the absence of any clear restrictions or regulations from the provincial government, that's exactly what they're going to do."

McGowan points out that in addition to his inaction on the Alberta Clipper and Keystone pipelines, Stelmach has also done nothing to stop or even discourage companies like Encana, Conoco Philips and Husky Energy from proceeding with plans to export hundreds of thousands of barrels of raw bitumen from their oil sands projects.

"Stelmach and the Tories are sleepwalking over a cliff - and they're taking the rest of Alberta with them," said McGowan. "The only good news is that we're still in the middle of an election campaign. So, I encourage all Albertans to demand real action from Premier Stelmach and the Conservatives on this issue. If no action is taken to keep oil sands jobs in Alberta, then the Conservative should be made to pay a price at the ballot box."

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For more information contact:

Gil McGowan, AFL President @ 780.483-3021 (office) or 780.218-9888 (cell)

NEB Hearings on pipeline to move unrefined oilsands to U.S. begin

CALGARY - Hearings begin this week before the National Energy Board in Calgary to determine whether or not the first of several "mega-pipelines" designed to move unrefined bitumen from the Alberta's oilsands to refineries in the United States will be allowed to proceed.

The pipeline under consideration is called the Keystone pipeline and is being developed by Canada's largest pipeline company, TransCanada Pipelines (TCP).

The company's application is being opposed by the Alberta Federation of Labour (AFL), the Communications Energy Paperworkers union (CEP) and the University of Alberta's Parkland Institute on the grounds that it would deprive Albertans of literally thousands of high-paying, long-term jobs in upgrading and refining.

The NEB hearings begin today, Monday, June 4, with the board considering a motion from the AFL and CEP to subpoena witnesses from major energy companies such as Conoco-Phillips and Suncor who plan to ship up to 450,000 barrels of bitumen down the Keystone pipeline to the U.S. each day.

The NEB has the power to subpoena such witnesses, but has rarely done so in previous hearings. Lawyers from the AFL and CEP will argue that testimony from companies planning to use the pipeline will be crucial in determining whether or not development of the Keystone pipeline is really in the public interest.

The hearings on the Keystone application will be held in the NEB Hearing Room, 2nd Floor, 444 Seventh Avenue S.W. Calgary AB. The schedule for the hearing is as follows (but may be subject to change). On June 4th hearings will begin at 9:30 am. All other days, hearings will begin at 8:30 am.

Monday, June 4: Motion for AFL and CEP to subpoena major bitumen shippers; cross examination of witnesses from TransCanada pipeline relating to environmental impact, commercial feasibility and socio-economic impact of pipeline.

Tuesday, June 5: Cross examination of witness from TransCanada pipeline continues.

Wednesday, June 6: Cross examination of TransCanada witnesses concludes; cross examination of intervenor witnesses begins; highlights: Gil McGowan, AFL president, will give evidence and be cross examined as will Tom Pearson, a retired Dow Chemical executive who is appearing in support of the AFL's intervention. McGowan will call on NEB to postpone a decision on the application until the federal and provincial governments develop a clearer policy about upgrading and refining Alberta bitumen in Canada.

Thursday, June 7: Evidence from the AFL's McGowan and Pearson continues. Evidence will also be heard from other intervenors.

Friday, June 8: Evidence from CEP National President Dave Coles and Mike McCracken, President of economic forecasting firm Infometrica. McCracken will present results of economic modeling which shows that if the bitumen planned for shipping through the Keystone pipeline were upgraded within Alberta, 18,000 Alberta jobs could be created.

The NEB hearing will then move to Regina for two days of hearings (June 13 and 14) with aboriginal groups. These hearings will be held at the Delta Regina, 1919 Saskatchewan Drive, Regina Sask.

The hearings will then return to Calgary on June 18 for a cross examination of TransCanada witnesses on technical and engineering issues. The hearings are expected to wrap up by June 21 or 22.

Note: The schedule for hearings is subject to change based on the length of testimony, length of cross examination and number of witnesses.

For information about the intervenor's cases and schedule call AFL president Gil McGowan at 780-218-9888. Copies of the AFL's initial submission to NEB can be viewed on the AFL's website, www.afl.org.

The hearings themselves can be viewed live on the NEB website at: http://www.neb.gc.ca/hearings/hearingwebcast_e.htm#oh_1_2007

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For more information call:

Gil McGowan, AFL President at 780.218-9888 (cell)