Northern Gateway remains committed to sourcing its pipe in Canada, despite the fact no mill in the country is currently able to produce the appropriate wall thickness required for the mega-project.
Northern Gateway engineering manager Ray Doering said Friday during National Energy Board hearings that the Evraz mill in Regina is the preferred option for building the pipe for the proposed 1,172 km pipeline from Alberta's oilsands to Kitimat.
"Our desire is to source our pipe from that mill, subject to a variety of market conditions at the time," he said under cross-examination from the Fort St. James Sustainability Group.
Evraz has been the Enbridge's preferred supplier for the past 10 years and company spokesman Ivan Giesbrecht said Northern Gateway is "fully confident in [Evraz's] ability to meet our needs," noting that in the past the mill has upgraded its capabilities for other Enbridge projects.
Buying the pipe domestically plays an important part in the economic case the company is building for the $6.5 billion project. They built their economic input/output model which shows 62,694 Canadian person years of employment will be affected by project on the basis that the pipe will be built in this country.
"We're assuming the pipe will come from Canadian mills, certainly that's our preference," Doering said.
Brenda Gouglas of the Fort St. James group spent two hours asking the company questions about the economic benefit to Canadians in general and this region in particular. She wanted to know how any employment projections would change if the company or its contractors hired foreign workers for either the construction or operations phases of the project. She cited media reports which indicated Daewood International of South Korea and PetroChina could be potential contractors should the project go ahead.
While not ruling out the possibility of importing foreign workers to build the pipeline, consultant John Thompson said it's unlikely the company or its contractors would go that route.
"Based on what we see now . . . the probability of that happening is very low," he said. "There should be very little reliance on foreign workers."
Enbridge senior manager strategic safety and construction management Tom Fiddler said where workers come from, could depend on how the Canadian economy is doing at the time of construction.
"There are cycles in the economy where [contractors] need to recruit and employ foreign workers," Fiddler said, noting that if that's the case the company will take a U.S.-first approach importing workers.
Thompson said any contractor would be bound by Northern Gateway's pledges to hire Canadian workers and set aside at least 15 per cent of jobs for Aboriginals.
Some contracts will likely go to non-Canadian firms. For instance, Fiddler said there's a limited number of Canadian companies that build large diameter hydrocarbon tanks, which could make it difficult for Northern Gateway to source the Kitimat tank farm locally. Other components of the project - for instance electrical switches or some large valves - will almost certainly be sourced internationally, since there isn't any capacity to build them in Canada.
Although the company wants to employ as many local First Nations people as possible, Fiddler said it's possible they may need to look further afield to meet the 15 per cent commitment.
"There may or may not be capacity from adjacent communities to meet that [employment demand]," he said, noting First Nations people from places like Treaty 8 in northern B.C., Alberta and Saskatchewan may supplement the workforce.
Under questioning from Gouglas, Thompson said not all of the nearly 63,000 person years of employment affected by the project would be in new jobs created by the project - in some cases he said it can refer to people "working harder."
The number of jobs affected could either rise of fall depending on how the final contracts are awarded.
"It's a very good starting point," Thompson said of the socio-economic impact study currently in evidence before the Joint Review Panel. "Will it vary a lot? Probably not."
Locally, Thompson pointed out that unemployment rates in northern and coastal B.C. have remained constant, but that fewer people are actually working. He said that could mean workers have been leaving the region for jobs and said a project like Northern Gateway has the possibility to reverse that trend.
"This could provide the opportunity for some of those workers to come home," he said.