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CALGARY — Premier Alison Redford was ready to declare the inaugural Alberta economic summit a success Saturday even without a consensus from the prominent Albertans who spent the day hashing out the province's spending and revenue issues.

But the call of many participants to introduce a provincial sales tax left lingering questions from the opposition parties about the Tory government's intentions around a consumption tax.

The focus of the summit — called by Redford because the province is dealing with a major revenue shortfall due to lower-than-expected energy prices and a deep discount for Alberta bitumen — was the long-term future of the province's economy, not the March 7 budget.

Speaking to reporters following the seven-hour conference at Mount Royal University, Redford said she was intrigued by suggestions around increased delivery of services by the non-profit sector and greater use of public-private partnerships (P3s), as well as the emphasis on gaining new market access for Alberta energy.

She said the repeated emphasis on a sales tax by many panellists did not necessarily point the direction the province will ultimately take.

"I also heard a lot today about spending cuts, I heard about reducing provincial income tax or eliminating provincial income tax, reducing corporate tax," said Redford.

"Do we need to have a conversation about revenue? I don't know the answer to that yet. But I think there's a lot of smart people engaged in that room who want to keep having that conversation. We're going to keep talking to Albertans."

The summit saw over 350 Albertans from academia, the business community and the non-profit sector — as well as MLAs from all parties in the legislature — in attendance. The event was also streamed online and Redford touted the social media success of the summit, noting in her closing address that 72,000 individual Twitter accounts used the hashtag #absummit.

The event saw four five-person panels discussing the state of the provincial economy, the public's expectation of services, Alberta's revenue mix and the government's spending habits.

Many of the panellists argued for a consumption tax even if they differed over whether the province's $40-billion budget is out of line.

George Gosbee, president and CEO of AltaCorp Capital, said the province could no longer rely on natural resource revenues to pay for programs and government should introduce a five per cent sales tax, as well as consider bringing back the health-care premiums scrapped by former premier Ed Stelmach.

"We had a free ride and we had a great ride. Now's the time to get off of it," Gosbee said.

Other panellists who advocated a consumption tax included the former dean of the University of Alberta business school Mike Percy, interim dean Joseph Doucet and AIMCo CEO Leo de Bever.

Jack Mintz, director of the University of Calgary's School of Public Policy, said Alberta has a spending problem but does need a fundamental reform of the tax system.

He said a sales tax harmonized with the federal GST would be more efficient and should be introduced with the aim of gradually eliminating the provincial income tax entirely.

But Derek Fildebrandt of the Canadian Taxpayers Federation doubted the possibility of a revenue-neutral sales tax being implemented in the province and suggested the Tory government would face an electoral revolt if it introduced a PST.

"The government has no mandate to bring in a sales tax," he said.

"The premier, I imagine, likes her job in government."

Redford has said the government faces a $6-billion shortfall in revenue in 2013-14 because a glut of oil in the United States has depressed the benchmark West Texas Intermediate price of oil and widened the differential in price between WTI and Western Canadian Select, which includes Alberta bitumen.

The government has made gaining access to new markets, particularly in Asia, its priority. That means the provincial go-ahead for pipeline proposals such as the Keystone XL line to the U.S. Gulf Coast, Northern Gateway and an expanded Trans-Mountain pipeline in British Columbia, and a reversed line to Eastern Canada.

However, all those projects face fierce opposition because of the environmental impact of the oilsands.

Jim Prentice, a former federal Conservative cabinet minister who is a close ally of Redford, said in his keynote address that "energy leadership and environmental leadership are now two sides of the same coin."

"We will either be an environmental leader or we will have other jurisdictions dictate our environmental policies, dictate our energy policies and dictate the markets we are able to access," he said.

The tone of the debate was always civil but the most striking differences were seen on the last panel of the day, which dealt with government spending.

Tom Flanagan, the University of Calgary political scientist who managed the Wildrose campaign in the spring election, said the solution to the government's financial woes could be found 20 years ago.

The cross-the-board cuts of Premier Ralph Klein and Finance Minister Jim Dinning in the early '90s balanced the province's books and set the stage for the province's economic boom, he said.

But Gil McGowan, president of the Alberta Federation of Labour, said the Klein-era cuts devastated the province's infrastructure and services.

"Albertans are willing to make tough sacrifices when necessary. We're prepared to take it on the chin when we've been convinced it's the right thing to do, he said.

"But allowing yourself to get punched in the face when it's not necessary is not brave and it's not noble. It's stupid."

Wildrose Leader Danielle Smith said she was pleased overall with the summit and noted that most Albertans would have found at least one or two panellists they agreed with.

"I was disappointed to see how often the conversation turned to this being a revenue problem and the solution being either taking out debt or raising taxes," she said.

"I don't support a sales tax because it is regressive. It actually does hit the lowest income people the hardest."

NDP Leader Brian Mason was more blunt, suggesting the summit had been "stacked" to deliver a message favouring a sales tax and pipelines.

"But we didn't learn what it was that created the dependence on royalty revenue in the first place, which was of course cuts to income tax for the wealthy and for corporations. That didn't even come up," said Mason, who noted there was also little discussion about increasing refining in the province to deal with the differential issue.

"My sense is that they're trying to set the stage for a sales tax, which is not something we support."

The Calgary Herald, Monday, Feb. 11, 2013
Byline: James Wood

CALGARY - The inability to get western Canadian crude to the right markets is costing the country's economy dearly, according to a new report paid for by the Saskatchewan government.

Each stalled pipeline project means a loss to the Canadian economy of between $30 million and $70 million every day, said the report penned by the Canada West Foundation, a Calgary-based think-tank.

"The economic impact is just devastating," foundation CEO Dylan Jones said in an interview Thursday.

The Saskatchewan government paid $50,000 to commission the report.

Premier Brad Wall has been an outspoken supporter of new pipeline projects, most recently signing a letter, along with 10 U.S. governors, urging U.S. President Barack Obama to approve the Keystone XL pipeline.

Alberta's oilsands, the third-largest reserves on the planet, get most of the attention when it comes to the pipeline debate.

But Saskatchewan, which has considerable oil resources of its own, is affected by the pipeline pinch as well, Wall said in Regina.

"We hope that this helps get the message out, even to a greater degree than it is now, that we have a pipeline capacity issue in western North America and that's costing Saskatchewan people a lot of money," he said.

"Because of the pipeline capacity issue, we're losing up to 19 to 20 per cent return on the taxpayer's resource."

In recent months, oilsands crude has been trading at a painfully steep discount to both U.S. and global light crude benchmarks. It's a trend that has both eroded oilpatch profits and caused the Alberta government to warn of a $6 billion revenue shortfall this year.

At the heart of the problem is a lack of adequate pipeline capacity to get that crude to the markets that want it most. Proposals of eastbound, westbound and southbound pipelines are in varying stages of development, but environmental opposition and political wrangling makes their fates uncertain.

Most pipeline capacity out of Western Canada heads to the U.S. Midwest, which Jones calls "the worst place in the world to be selling oil" as booming production from areas like North Dakota floods the market.

The Canada West Foundation says new pipelines need to be built in the right directions.

A massive expansion to Trans Mountain and Enbridge's Northern Gateway proposal would enable crude to be transported to Asia via tankers from the West Coast, but they face stiff opposition within B.C. on environmental grounds.

TransCanada Corp. is awaiting final U.S. government approval for the northern leg of its Keystone XL pipeline, which would allow Canadian crude to flow to refineries on the Gulf Coast that are thirsty for heavy oil. Construction on the southern leg between Oklahoma and the Gulf is underway.

Refineries in eastern Canada and the U.S. Eastern Seaboard rely on pricey imported crude from overseas, which is hurting their economics. Both TransCanada and Enbridge have projects in the works to send western crude eastward through reconfigured pipes that are already in the ground. It's possible those lines could extend all the way to New Brunswick, home to Canada's largest refinery.

"If pipeline project proposals such as Trans Mountain, Keystone XL and Northern Gateway don't move forward, Canada will be foregoing $1.3 trillion in economic output, 7.4 million person-years of employment and $281 billion in tax revenue between now and 2035," said Michael Holden, the foundation's senior economist and author of the report.

While most of the benefits would accrue to Alberta, Holden said those three projects would add a combined $84 billion to economies elsewhere in Canada.

The report calls on provinces to work together to tackle the problem, the way Alberta Premier Alison Redford and New Brunswick Premier David Alward did earlier this week in touting an eastbound oil pipeline.

Keith Stewart, climate and energy campaign co-ordinator at Greenpeace, says the Canada West Foundation report "misses the point."

"If we want to avoid climate chaos, we have to stop building fossil fuel infrastructure like new tar sands pipelines," he said.

"Canada can, and should be a winner by building the climate-safe, green energy economy that our kids need and deserve."

The Alberta Federation of Labour also has a different view of the issue.

The group said in a report earlier this week that Alberta should require energy companies to upgrade oil in the province before they are allowed to ship it.

Federation president Gil McGowan said the Alberta government continues to approve in situ oilsands projects without requiring associated upgrading, which converts bitumen from the oilsands into light oil refineries can use. That's flooding the U.S. market and driving down the price.

Environmental opposition has been particularly strong to pipelines that would ship oilsands bitumen, the thick, tarry stuff that needs to be diluted in order to flow.

And that alone might force governments to take a hard look at upgrading and refining opportunities at home, said Wall.

"There's all manner of politics, some of it based on reality, some of it not," said Wall.

"If we can't get pipelines built because of it, we just have to start not moving bitumen, but moving a refined product."

Times Colonist, Thursday, Feb. 7, 2013
Byline: Lauren Krugel, The Canadian Press with files from Jennifer Graham in Regina

CALGARY - A research paper is reinforcing the idea that Canada's resource industry is at risk of being left behind internationally if it doesn't find a way to get oil to receptive markets in the Pacific Rim.

The report from the School of Public Policy at the University of Calgary says demand for heavy oil from Alberta's oilsands lies primarily in southeast Asia, but warns the window of opportunity will begin to close.

Author Michal Moore says Canada needs to find a way to get into those markets in the next two to five years.

"If we can get our products into the market in that stream we're going to be competitive," Moore, a professor of energy economics at the school, said Wednesday when the paper was released.

"The equivalent of being late is you have to take a bigger and bigger discount on your product, or switch and start supplying a more higher valued-added product."

The Alberta government has turned up the volume in recent weeks about the hole the oilsands oil discount is eating in the province's bottom line. Premier Alison Redford has warned of a $6-billion revenue shortfall this year because oilsands crude has been fetching a significantly lower price than the U.S. and global benchmarks.

She's also referred to the buildup of crude in Alberta as customers get a cheaper product elsewhere as a "bitumen bubble."

Moore says competition is an issue for Canada.

"There's a lot of that oil out there in the market. There's plenty of capacity in the Pacific Rim/Asian markets for heavy oil like ours, but it's not infinite and it's certainly competitive."

Maya heavy oil from Mexico and Arab Heavy are very close to Alberta's product in weight and sulphur content, Moore said.

The challenge becomes getting Alberta oil to ports so it can be loaded onto ships and sent to willing customers in China, Japan or Korea. Moore said the most cost-effective way of doing that is through pipelines, but delays in the proposed Northern Gateway project to the West Coast present a problem.

Some Alberta heavy oil is already being processed at refineries in California. Moore also pointed to the possibility of shipping Alberta oil eastward to New Brunswick. And there is talk of a rail link to a port in Alaska.

New Brunswick Premier David Alward was in Alberta this week and said he'd welcome a pipeline carrying oilsands bitumen to the 300,000-barrel-per-day Irving Oil refinery in Saint John - the largest in Canada - with the possibility of exporting some of that crude by tanker.

But the Alberta Federation of Labour says Alberta should require energy companies to upgrade oil in the province before they are allowed to ship it.

Citing an Alberta Energy Department analysis obtained under freedom of information laws, the group argued Wednesday that oilsands mining projects with upgraders will become hugely profitable as the light-heavy oil price differential expands.

Federation president Gil McGowan said the Alberta government continues to approve in situ oilsands projects without requiring associated upgrading, which is flooding the U.S. market and driving down the price.

"These projects become less economically viable as the price difference between bitumen and crude expands," McGowan said in a release.

"And yet these projects have mushroomed throughout the province. We are flooding the market, and these documents show that the government knows it."

Alberta NDP Leader Brian Mason said the government's refusal to increase Alberta's upgrading capacity is part of a "bitumen bungle."

"Here we have a clear message from the market, from industry, from policy analysts and from the government's own research, yet Redford continues to bury her head in the oilsands and stubbornly insist that we can only talk about moving bitumen because that is what is in the ground," Mason said in a release.

Lethbridge Herald, Wednesday, Feb. 06, 3013
Byline: Bill Graveland, The Canadian Press

EDMONTON - The Alberta Federation of Labour says the discounted price Alberta bitumen is fetching of the world market could provide an opportunity for more upgrading and additional jobs in the province.

About two weeks after Premier Alison Redford warned Albertans of a tough budget March 7, in which resource royalties are expected to plunge by $6-billion in the next fiscal year largely due to the lower price paid for the province's bitumen compared to other benchmark crudes, the AFL said there is a "silver lining" to the dismal fiscal projections.

Federation president Gil McGowan said a 2011 internal government report, obtained through a Freedom of Information request, shows that as the price differential between Alberta heavy oil and the benchmark West Texas Intermediate crude grows, mining projects that both extract and upgrade bitumen become more economically viable. Mines alone become less economically profitable, the data shows.

"The numbers do add up that there is a strong economic case for the type of development that Albertans want, which is upgrading and refining, and that the government knows that the economics are strong but has been telling us something else," McGowan said.

The AFL has long argued for more upgrading capacity in the province, saying it will create more long-term jobs and net better value for Alberta bitumen since the refined product garners a stronger price. However, on the same day as the AFL released its documents, Suncor Energy Inc. announced that a final decision on its planned multibillion dollar Voyageur upgrading project won't be made until the end of March due to a gush of higher quality light oil that has eroded the economic argument for the upgrader.

Alberta Energy Department spokesman Mike Deising said the private sector has the "paramount responsibility" to determine if building upgraders in the province is economically feasible.

"You don't make economic decisions on billion-dollar refineries or upgraders based on a price differential at one point in time," he said. "These are 30-year or longer assets and companies look 30 years out onto the horizon. Just because we're seeing a widening of the differential right now, that's not going to affect the business case that's going to be a 30-year asset, it's just going to be part of the decision-making process."

The differential between the two types of oil has been growing and spiked sharply in December. McGowan said it currently hovers in the range of 30 per cent. He called it an "incredible loss of value, an incredible loss of jobs and an incredible loss of opportunity" if the trend of refining less bitumen in the province continues.

The chairman of North West Upgrading Inc. spoke out this week about the benefits of refining more oil in Alberta.

The company is partnering with Canadian Natural Resources Ltd. to build the $5.7-billion Sturgeon upgrader and refiner through the province's bitumen-royalty-in-kind program. The scheme sends provincially owned bitumen to private sector refineries to be turned into higher-quality products. The Sturgeon facility is the only project that's coming to fruition through the program, which was started in 2010.

It is the first new refinery to be built in Alberta in 30 years.

McGowan said the bitumen royalty-in-kind program needs to be expanded.

Edmonton Journal, Wednesday, Feb. 6, 2013
Byline: Alexandra Zabjek with files from the Calgary Herald

AFL to release Government of Alberta analysis of bitumen economy

Edmonton – Secret government documents that show upgrading is economically viable will be released by the Alberta Federation of Labour at 10 a.m. on Wednesday, Feb. 6.

The documents, which were obtained by the AFL under the Freedom of Information and Privacy Act, include a Department of Energy analysis that deals with the economics of the energy industry. This analysis of taxes, royalties and upgrading policy was deemed 'secret' by the Government of Alberta.

"These documents paint a picture of a Government that knows what needs to be done, but is afraid to act," AFL president Gil McGowan said. "This 'bitumen bubble' has a silver lining, and the province knows it – they wrote the documents to prove it. Now they just need to have the courage to follow through on the evidence of their own research."

Who: Alberta Federation of Labour President Gil McGowan

Where: River Valley Room, Lobby Level,

Crowne Plaza Chateau Lacombe Hotel

10111 Bellamy Hill Rd NW, Edmonton

When: Wednesday, Feb. 6, 2013 at 10 a.m.

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MEDIA CONTACT:

Olav Rokne, AFL Communications Director at 780-289-6528 (cell) or via email [email protected].

Wants province to invest in oilsands refining capacity

CALGARY - The Alberta Federation of Labour called Wednesday for the province to burst the so-called "bitumen bubble" by creating a Crown corporation that could partner with industry to invest in oilsands upgrading and refinery capacity.

At a news conference in Calgary, AFL president Gil McGowan suggested the PC government take their cues from former premier Peter Lougheed, who created the Alberta Energy Company Ltd in 1973 to boost investment in the province's oil and gas industry. With the price differential between Alberta bitumen and benchmark West Texas Intermediate crude at historic levels (and expected to take a $6 billion bite out of provincial resource revenues in 2013-14), McGowan said the province needs to develop a "value-added" oilsands strategy that would produce a more marketable commodity.

"In this case, what the provincial government should be doing is taking the advice of former premier Peter Lougheed who said over and over again — in order to get the most for our resources, we have to start thinking like owners. And owners think not only about quick sales and quick production, but about the long-term benefits like best prices and job creation," McGowan said.

McGowan said the benefits of increased refining capacity in Alberta would include better prices for the product, and long-term job creation here in the province rather than down the pipeline in another jurisdiction. Currently, less than half of Alberta's bitumen is being upgraded before it leaves the province.

"Yes, we need pipelines to get our product to market, but the first thing the government should be doing is using whatever power it has at its disposal to make sure we're upgrading here. Then we can talk about how to get the upgraded product to market," he said.

University of Alberta energy expert Richard Dixon said while it's easy to see why the low price of bitumen might lead the AFL to make the argument, there's no guarantee the current price environment will last.

"We don't know what's going to happen," said Dixon, executive director of the U of A's School of Business. "By the time you build this refinery, by the time you build this upgrader, is that (price differential) going to exist still? ... It's a huge gamble."

Dixon pointed out that Suncor Energy Inc. is currently reviewing the cost effectiveness of its proposed Voyageur upgrader. A decision on whether it will go ahead with the project is expected by the end of March. And the North West Upgrading project — which will be the first new refinery to be built in the province in 30 years — is being encouraged along by the government's "Bitumen Royalty in Kind" (BRIK) program, where the province receives oil for its share of the royalty from producers and aims to stimulate value-added activities like refining and upgrading. He said if industry isn't rushing to build refineries right now, it's because it doesn't make economic sense.

Michael Moore, senior fellow with the University of Calgary's school of public policy, agreed.

"Whether it's a crown corporation to build roads or a crown corporation to build rocket ships, you've still got to cover costs. So why would a crown corporation be more efficient at this than Nexen or Shell?" he said.

Moore said Alberta is better off continuing down the path it's on now — working to improve access to markets that are already set up to handle oilsands product.

The AFL proposal was met favourably by Alberta Liberal Leader Raj Sherman, who only last week also proposed the establishment of a Crown corporation aimed at giving Albertans an equity stake in their natural resources. He said again Wednesday that it's time for the province to have that conversation.

"Premier Lougheed did it ... we need to revisit the policies of Premier Lougheed," Sherman said. "Let's have a shared partnership with these (energy) corporations. If they're going to succeed, let's succeed with them and let's let Albertans have a share of the profits."

Mike Deising — spokesperson for Alberta Energy Minister Ken Hughes — said the discussion around value-added activities in the oilsands is nothing new. He said the government has no interest in creating a new Crown corporation, but is very interested in continuing with its BRIK program.

"Minister Hughes has been quite clear in his public comments that if there are companies out there that have economically viable proposals that could be of benefit to the province, he's fully open to sitting down with industry and having conversations on those projects," Deising said.

Wildrose Leader Danielle Smith said the creation of a new crown corporation would be a "horrendous" idea.

NDP Leader Brian Mason said his party is open to multiple ideas on ways to enhance value-added aspects of Alberta's energy industry, but is not currently advocating the creation of a Crown corporation.

The Calgary Herald, Thursday, Jan. 31, 2013
Byline: Amanda Stephenson
with files files from James Wood, Calgary Herald

An Alberta judge has ordered the Canadian arm of a Chinese state-owned oil company to pay the biggest workplace safety fine in the province's history after the death of two foreign workers at a massive construction project about five years ago.

"The fine is good, but no amount of money can make up for what they did wrong in the first place," said Wayne Prins, Alberta director of the Christian Labour Association of Canada (CLAC).

"In our view, the fine sends the right message to contractors and people in the industry that you must follow the procedures and rules in place."

Alberta Provincial Judge John Maher ordered Sinopec Shanghai Engineering Company (SSEC) to pay a $1.5 million fine in a St. Albert court room on Jan. 24.

The fine is related to the deaths of a welder named Ge Genbao, 27, and an electrical engineer named Lui Hongliang, 33, at the Canadian Natural Resources Ltd. (CNRL) Horizon oilsands project.

They were killed on April 27, 2007 at the facility located north of Fort McMurray.

The Chinese temporary foreign workers were welding the wall structure inside a massive storage tank when the roof support structure collapsed onto them.

Two other foreign workers were seriously injured.

Under Alberta's Occupational Health and Safety Act, 53 charges were laid against three companies in the deaths of Genbao and Hongliang and the injuries of the other workers.

CNRL, who was in charge of the construction site at the Horizon oilsands project, hired SSEC to build the storage tanks.

SSEC is the Canadian subsidiary of Chinese state –owned oil company Sinopec.

Sinopec hired more than 100 temporary foreign workers in China and began work on the construction of two oil storage tanks in late 2006.

SSEC pled guilty to three charges in September 2012 of failing to ensure the health and safety of workers.

The company was given the maximum $500,000 fine for each charge. Despite this fact, some people believe the fine will do nothing to deter them from practices that endanger workers.

"Sinopec didn't just import workers from the third world, they also imported third-world health and safety standards," said Alberta Federation of Labour President Gil McGowan.

"Alberta missed its chance to send a message that Chinese companies working in the oilsands need to play by Canadian rules."

McGowan argued that the fines are too small to make a difference to the massive corporation.

"One and a half million dollars doesn't even amount to a rounding error in the annual budget of a monstrous global corporation like Sinopec," he said.

"This fine does nothing to dissuade them from playing fast and loose with the safety of their workforce."

The original plan was to build the tank walls first, then use them to support the roof while it was under construction.

That plan changed when the project fell behind schedule.

CNRL approved the construction change, but SSEC did not prepare any formal written procedures that should have been certified by a professional engineer.

As a result, other charges in this case include failing to ensure that a professional engineer prepared and certified drawings and procedures; failing to ensure the roof support structure inside the tank was stable during assembly; failing to ensure that U-bolt type clips used for fastening rope wire were installed properly; and failing to ensure that wire rope being used was safe.

"We shouldn't forget the circumstances that led to the deaths of Genbao and Hongliang," McGowan added.

"The company did not get the construction plans certified by an engineer. The wires weren't strong enough to hold up against the wind. It was a complete abdication of responsibility on the part of the employer."

Crown prosecutors and SSEC lawyers came up with an agreement, which allocates $1.3 million of the fine to create an education program to train temporary foreign workers about their legal rights, as well as workplace health and safety.

The program aims to hire 45 instructors to train about 5,500 workers in a three year period.

Journal of Commerce, Wednesday, Jan. 30, 2013
Byline: Richard Gilbert

Creating upgrading jobs in Alberta has never been more viable

CALGARY – The so-called "bitumen bubble" is actually an opportunity for the province to add value and create jobs, says the Alberta Federation of Labour. R

In a new report, the AFL shows that the difference in price between bitumen and crude makes it economically viable to invest in the infrastructure needed to upgrade Alberta’s oil resources here.

“The price of bitumen is low right now because we’re flooding the market with bitumen,” Alberta Federation of Labour president Gil McGowan said. “And the solution they’re proposing is building more pipelines to flood the market even further. That’s just not how markets work. We need to refine the bitumen here, so that we’re selling what the international markets want: synthetic crude.”

Using the government’s own estimates, the report shows that Alberta can build on the Lougheed legacy and create more than 12,000 long-term stable jobs through upgrading.

“The Conservatives have promised to make sure that 65 per cent of Alberta’s bitumen is upgraded here, but have repeatedly broken that promise because they say that the price of bitumen is too high,” McGowan said. “The price isn’t high anymore, but they’re still not listening to the markets. The differential should be seen as an opportunity, not a threat."

In light of Alberta’s projected $3-billion deficit, getting a fair value for the province’s natural resources is of paramount importance. According to the report, if Alberta were selling synthetic crude oil instead of raw bitumen, producers would be earning $38 more per barrel.

“By not requiring upgrading in Alberta, we’re pumping out more of the wrong thing,” McGowan said. “We’re shipping good oil sands jobs elsewhere, when the economics of upgrading make a lot more sense.”

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 AFL report: Bitumen glut has silver lining

MEDIA CONTACTS:

Gil McGowan, President, Alberta Federation of Labour at 780-218-9888 (cell)
Olav Rokne, AFL Communications Director at 780-289-6528 (cell) or via email [email protected].

A Canadian subsidiary of Sinopec, a Chinese state-owned oil corporation, was ordered to pay $1.5-million fine Thursday, approximately six years after a collapsing tank roof killed two Chinese workers at an oilsands construction site.

According to the province, the penalty is the largest workplace safety fine in Alberta's history.

The April 2007 incident occured at Canadian Natural Resources Ltd.'s Horizon project, approximately 70 kilometres north of Fort McMurray. The workers – Ge Genbao, 28, and Lui Hongliang, 33 – were killed when the roof of a metal storage tank collapsed. Five other workers were also injured.

In late September, representatives from Sinopec Shanghai Engineering Company Canada Ltd. appeared in a St. Albert courtroom and pleaded guilty to two charges related to the deaths of the workers, plus an additional third charge for failing to ensure the safety of two seriously injured workers.

According to an agreed statement of facts filed in court, work on the storage tanks had begun to fall behind schedule at the time of the incident. SSEC Canada and CNRL began to construct the tanks walls and roofs simultaneously.

About three weeks after the new construction approach began, a cable supporting a roof snapped after strong winds and kinks weakened the wire.

The case originally involved a total of 53 charges against three different companies. During the lengthy court battle, charges against Sinopec were dropped and 29 charges against CNRL were stayed.

Despite the large fine, the Alberta Federation of Labour is calling the punishment smaller than a "rounding error in the annual budget of a monstrous global corporation like Sinopec," and that the fee will not serve as a lesson to the multi-billion dollar oilsands companies operating in northern Alberta.

"Alberta missed its chance to send a message that Chinese companies working in the oilsands need to play by Canadian rules," said AFL president Gil McGowan. "Sinopec didn't just import workers from the third-world, they also imported third-world health and safety standards."

Ft. McMurray Today, Sunday, Jan. 27, 2013
Byline: Vincent McDermott