Senior Editor Richard Mandel spent several days in the town of Fort McMurray, Alberta, Canada, during the first week of December, 2006, talking with local workers and equipment suppliers about the role of welding in the development of Alberta's oil fields that may yield more petroleum than Saudi Arabia. Mandel confirms that the region is booming, that it's cold there in December, and that there is a dire need for welders for current and future projects. His reports follow.

Fort McMurray, Alberta, Canada — The shortfall of qualified welders continues to plague construction and manufacturing industries, but few face the challenges that the petroleum industry in northeast Alberta, Canada has before it. In a boom that recalls the California Gold Rush of 1849, more and more oil companies are setting up operations or investing in expansion, with projects on the books scheduled through 2015 that will run to billions of dollars.

The question that is outstanding is: Will those companies overrun their program deadlines because there aren't enough workers to build the plants, pipes and other necessary equipment?

Boomtown
Of crucial importance to the success of these projects will be welders who are skilled and certified to weld pipe, pressure vessels and structures, and to repair the equipment needed to build and service the oil industry infrastructure. Many will be coming to Fort McMurray, the primary community for Albertan petroleum activity north of the capitol of Edmonton. The town sits on one edge of the Athabasca deposit, one of three oil sand deposits that make up an oil field about the size of Florida with the potential to produce more barrels of petroleum than Saudi Arabia. A practical means to separate oil from the sand was developed only in the last half-century — the Athabasca deposit is unique because 20 percent of the oil sands are near the surface, so rather than sinking wells, mining operations primarily involve huge machines removing and transporting tons of sand to nearby extraction plants.

If one looks at Fort McMurray strictly from its census, the scale of expansion quickly becomes apparent. In 1965-1966, when the first major commercial plant was set up just north of the town, the local population was 1,200 individuals. In 1996, the reported population had swelled to more than 37,200, and by 2006, nearly 30,000 more people had been added, an 86 percent increase over a ten-year period.

Of the current population, 27.7 percent work directly for oil sands companies, and an additional 16.6 percent work as contracted labor. The next largest census divisions divide into 19 percent for service/retail and 5.8 percent for construction — key segments in a fast-growing community. Much of Fort McMurray's population comprises people who left Newfoundland about a decade ago, when that province's fishing industry was experiencing massive shut-downs.

The census numbers will continue to change, owing to attrition and the expressed desire by both the Canadian government and oil industry leaders to triple oil production by 2015. On the books are projects, scheduled to start this year, for new plants and expansions of existing facilities, work for three to six years that will cost billions of dollars. And manpower — the huge project for Canadian Natural Resources Limited, for example, anticipates a need for 4,000 full-time workers at the peak of the coming construction.

Jamie Connors, regional sales supervisor for Air Liquide Canada, Inc., said that he knew of local customers during the first week of December 2006 who had immediate need of 60 certified welders.

Where the work is
There are 40 listings under the "Welders" heading in the Fort McMurray Yellow Pages, of which a dozen are full-fledged job shops. The rest are "a guy-with-a-truck-and-a-portable-rig."

There's more than enough work to go around. Ron McKenzie, who oversees a small shop with 12 employees — half of whom are field crew — notes that even when he's on vacation, his cell phone is close by. His shop, which began in 1994 as a one-truck operation doing general fabrication and welding, for the last few years has focused almost primarily on service of rolling equipment. McKenzie's shop has a six-day workweek, and has a contract to support Finning, the local Caterpillar dealership, in new machine preparation and repair.

"Rolling equipment in this town is a good business to be in, and maintenance is a big thing," says McKenzie. "Repair work is not as glorious or clean as doing pipe or structural, but we keep busy year 'round."

Many outside contractors are involved in the oil sands, For example, crews from Midwest Management Ltd, of Acheson, Alberta, have been running pipe in the region since the late 1990's. One of their largest jobs involved welding and laying more than 280 miles of pipe, ranging from 12-in. to 24-in. in diameter. Completed in 25 months, the Corridor Pipeline Project connects a mine north of Fort McMurray to a processing plant near Fort Saskatchewan and to pipeline terminals in Sherwood Park.

The plants, themselves, also have their own weld crews to handle maintenance and facility expansion. Like the logging companies of earlier days, the larger oil companies maintain onsite housing to accommodate hundreds of workers, with camp stores, game rooms, theaters and other amenities.

The labor supply
A small trickle of welders that arrive in Ft. McMurray fresh from training programs (see related story) is not enough to meet the demand for fast industry growth. Paychecks are certainly attractive — a 16-year-old apprentice welder can earn $50,000 $60,000 Canadian (about $43,200 to $51,850 US) (based on mid-market currency exchange rates on Dec. 22, 2006), and a 25-year-old journeyman could see $100,000 to $200,000 Canadian ($86,420 to $172, 800 US) per year. By comparison, journeymen welders in Toronto may earn half or less.

Negatives? Not surprisingly, the work is hard, the hours long. The cost of living is high for the area — the price of a single-family home in town currently averages around $400,000 ($345,700 US). And the weather swings from –40 degrees C (-40 degrees F) in winter to summers that are 40 degrees C (104 degrees F) and dry — suitable for snow mobiling and hunting, but tough on welders. For such reasons, many workers sign on for a particular project, and then leave for more temperate regions when the job is completed, often augmenting their earnings with the profits made from selling a house that has increased in value during their stay.

As an alternative strategy, companies have shopped outside the North American continent to fill their work crews. Recently efforts indicate the companies are stepping up recruitment of more than just handfuls of workers at a time from China, Korea and the Philippines. Several news sources quoted Real Doucet, senior vice president for oil sands projects at Canadian Natural Resources, in April 2006, when the company announced intent of hiring 500 workers from China. "We went into 12 cities across Canada, where we have done open houses and invited the contractors," said Doucet. "We are up to $20-billion, $30-billion-a-year of work across Alberta now, so Alberta itself cannot supply the demand." He then added that there would be additional costs in training and transporting foreign workers, but that the laborers would be less costly in areas where there is high demand for a trade, such as welding.

To help ease the process for companies to bring in foreign workers, the Canadian Federal government announced plans in November to reduce the length of time required to process each worker's application. According to Immigration Minister Monte Solberg, the temporary foreign worker program will help employers bring in foreign help when there are simply no Canadians to fill the job. When representatives of the Alberta Federation of Labor warned that relaxing the rules could lead to foreign workers being exploited and underpaid, the Minister expressed hope that the labor groups would help ensure that such practices do not happen.

Not everyone expresses confidence that bringing foreign workers to fill the skilled labor gaps is a solution. Notes Ron McKenzie, "We see the guys that come through and, skill-wise, I don't think they're going to be able to do the job. The Alberta apprenticeship program is very good, and we've seen good people come through. The companies are saying that they're sending people over to test the candidates before they come to Alberta, but, if they luck out and pass the test, I don't think it's going to work. There may be some exceptional people, but I don't think the numbers are going to be that high. If they came over as apprentices, they can be brought up to local standards, as long as the communication problem is minimal."

For the time being, then, work continues apace as pipe is joined and refineries are built and expanded. Up in the remote town of Fort McMurray, there's plenty of work to be done.