Monday, 21 September 2020


It is ironic that the oil industry, whose excesses have helped distort economies in many parts of the world, including ours, now has its hand out to the same governments they have “played-off” against each other for decades.

Still, two groups of local workers – operations and construction - rely heavily on the industry for their livelihood and, understandably, want it rescued. This post is a commentary on the plight of the latter category.

While oil will be in demand for many years yet, the problems of the industry, including price, are not going away. No matter how you feel about environmentalists, many of whom naively believe that economies can switch to other job producing opportunities as fast as turning on a light bulb, the replacement of dirty oil is both necessary and unstoppable.

But naivety isn’t the exclusive purview of just one group. The oil industry, prohibited from engaging in monopolistic practices in free enterprise economies, have for years climbed on the backs of OPEC, particularly Saudi Arabia, to keep benchmark prices as high as possible. The added fear is that countries like Iran and Venezuela, who have vast unproductive oil reserves, will get their act to together.

Those realities, and others to be described, announce that on the jobs front: “Houston, we have a long-term problem”.

In plaintiff tones, Trades NL spokesperson, Darin King, says that 85% of trade workers in NL - over 15,000 - are laid-off. Anecdotally, the parade of those giving up on the Alberta oil patch and returning home has barely begun.

Those workers are now realizing that after thirty years NL’s offshore construction industry, except for temporary flourishes (Hibernia, Terra Nova, Hebron and White Rose), is largely non-existent.

For CAPP, NOIA and Trades NL, the plea for Government intervention is about a resolution to the immediate crisis. What they need to acknowledge, at the start, is that they are trapped within a “sunset” industry diminished by their own short-sightedness.

Forget NOIA; there is no vision there and none is expected. Trades NL has offered no better insights but the organization has a huge vested interest in thinking bigger and longer-term quickly, because they represent many people who have a lot at stake.  

Strangely, it has taken the near total collapse of the offshore oil industry to get Trades NL to even link the idea of jobs with the Terra Nova FPSO and Bay du Nord.

Oil Workers Demonstrate (Photo Credit: VOCM)
The Terra Nova FPSO has been sitting idle offshore, or off Bell Island, since January. The industry knew that the vessel was heading for Spain eight months ago, or earlier. Why weren’t those jobs important to Trades NL then?

Why did this “umbrella labour organization” stay quiet when Premier Ball accepted a few paltry hours of local work in the deal with Equinor on Bay du Nord? Why did they not tell him to do it over? Even had they failed, they would have at least demonstrated a capacity for the bigger picture.

Similarly, not a whimper was heard from them when Premier Ball allowed the retractable gates to be dropped from the Argentia construction site – killing the prospect of further work, except if another very large structure is built.

Then, too, a more forward-thinking Trades NL would have skewered the Government for staging the Muskrat Falls Project in the hottest economy in Newfoundland history, taking a goodly amount of labour from elsewhere. Now, Darin King counsels “local preference” as Trades NL looks for Federal money. That should work well with Canadian taxpayers!

It is one thing to maintain lists of available workers, as Trades NL does, and place them when the call comes in from industry; it might even work when markets are efficient, invested and expanding.

What if no one cares that the “bloom might come off the rose”? What if the Government is unwise and short-sighted? If not Trades NL, what other organization is going to influence sensible jobs-oriented public policy in NL? If “not us” is the Union’s answer, then you have learned well from the public sector. Those Unions will soon regret thinking that good public policy – in this case fiscal policy - does not apply to them.

The idea of pursuing the Atlantic Accord in the 1980s was to spur a new local construction and offshore services industry – amidst high unemployment - in which a host of new, and old skills, could be both learned and employed. No one ever said that the industry should stay local or that it had no place in an international economy. In fact, the outlook was far more optimistic then.

What took place was far different than the promise. The locals rested on their laurels content with the work that the Atlantic Accord “wrestled” from the offshore oil companies, while they levered almost nothing except the ability to train and send skilled tradespeople to Alberta, occasionally Ontario, or elsewhere.

Where did we go wrong? Why can we not even lever our 70-odd cent dollar to crack into the American, or any other market?

The truth is that not just government, Trades NL and the 16 trades unions whom they represent, need to take – not all – but some of the responsibility for this problem. They need to ask themselves: are we able to do things differently?

Last week’s rally heard no Plan. It had but a single demand: Government, throw money at our industry.

This is not good enough. What construction tradespeople are facing is a 30-year old Bull Arm befitting a third-world country rather than one with most every first-world advantage. The problem is not just non-existent facilities – professional offices, modern heavy lift cranes, etc. or the absence of retractable gates allowing easy entry/exit of vessels and other platforms. It is that the sheer mention of competitiveness, especially “productivity”, attracts only guffaw and derision.

Why is it so difficult for Union and Management to come to grips with that issue? Perhaps, with both parties backed into a corner, there is still time to get it resolved. The urgency is compelling.

The Marystown Shipyard has given up trying to compete internationally. It is now servicing the local aquaculture industry. The jury is still out on whether Kiewit Offshore Services is able to bring any continuous international business to the Cow Head offshore facility.

Norway, on the other hand, with 4 million people, build most of their offshore installations AND are able to compete for work all over the world, in the oil industry.

Enough time has passed for Bull Arm to have become a modern, competitive yard, ready to compete with any in North America, Europe, or Scandinavia. As it stands, WE send work to THEM; hence the Terra Nova FPSO awaits its crossing.

Demonstrations have their purpose and get attention, but when “too good to be true” isn’t any longer, sanity must prevail. Disciplined investments are the ones managed by a disciplined management team and a productive workforce - the latter possessing leadership that does not turn a blind-eye to the partisan priorities of political Parties, is engaged in public policy issues able to fix our economic short-comings, and is not preoccupied only with the Collective Agreement. Sound public policy – not short-termism of any kind, is what will give certainty to peoples’ lives – the ability to pay their mortgages and the constancy of the next job.

If Trades NL fails to become a part of a new era for Bull Arm – and Argentia – one that will have positive long-term implications, “temporary” is all that local tradespeople will ever have; for those who remember the decades of the 50s through to the 90s, it will be deja vous all over again!

Federal Natural Resources Minister Shamus O’Reagan is too much of a novice to be this candid; too nubile even to bang the Federal Cabinet over the head in the tradition of either Don Jamieson or John Crosbie. But another Federal Minister might tell him to tell us: Newfoundland, get your act together.

As much as people don’t want to hear the grim facts, further inaction by the Provincial Government, the oil industry, and Trades NL – combined - will have us all watching as the free-market – not the Federal Government - sorts out the winners and the losers.