Waschuk Pipeline

In the pipeline┬áPipeline construction is a tough industry, but for those who get it right, the rewards are enormous. Wes Waschuk tells Gay Sutton how a small family company has grown to become CanadaÔÇÖs largest oil and gas pipeline builder. Canada is in a fortunate situation, rich in oil resources at a time when the world is clamoring for security and continuity of supply. ÔÇ£Right now weÔÇÖre in a really exciting time for Alberta,ÔÇØ says Wes Waschuk, president of Waschuk Pipeline, headquartered in Red Deer, Alberta.   ÔÇ£WeÔÇÖve had a prosperous five years; weÔÇÖre situated in the right part of the world because weÔÇÖre sitting on oil reserves that are the second-largest proven in the world next to the Middle East.ÔÇØThe continuing boom in Canadian oil production has led to the growth of a range of highly skilled companies working across all areas of the industry. One such is Waschuk Pipeline, which was launched in 1966 and has grown to become CanadaÔÇÖs largest privately owned specialist pipeline construction company.In spite of its size, it is still very much a family-owned and family-run business. ÔÇ£My dad was a welder on the pipelines when I was a little boy,ÔÇØ Waschuk explains. ÔÇ£He formed the company in 1966 with a very small bank loan and set about growing the business, taking on larger and larger projects and investing the profits into equipment.ÔÇØ By the late 1980s and early ÔÇÖ90s the company was in a strong position to take advantage of the huge expansion in AlbertaÔÇÖs oil industry. Today it owns a large fleet of equipment worth over $75 million and is jointly owned by Waschuk, his father, brother and sister. ÔÇ£Although my father is no longer involved in the day-to-day running of the company, he still works part-time for us and helps with estimating for jobs.ÔÇØWaschuk, meanwhile, began working on the pipeline for his father at the age of 14, spending each summer vacation throughout his school years learning at the hard end of the business. Although engineering was not his interest, he was always destined to work in the family company. He went to the University of Calgary at the age of 18, studied for a degree in commerce, and returned with valuable business and financial skills. ÔÇ£IÔÇÖve worked here full-time ever since, so IÔÇÖve been with the company for 31 years,ÔÇØ he says.Waschuk concentrates purely on the financial aspects of the business, but all those years working on the pipeline have given him a deep insight into the pipeline construction industryÔÇöessential for writing estimates and negotiating contracts. Pipeline construction is tough work. Temperatures in the winter can drop below minus 40 degrees Celsius (ÔÇô40┬░ Fahrenheit)ÔÇöat which point the work stopsÔÇöand then in the summer regularly exceed 38┬░C (100┬░F), and the workforce is out in all weather. During busy periods the company employs over 700 staff members, all of whom are supplied by the union and are paid according to a collective bargaining agreement that is renewed every three years and sets the price for labor. But the work is cyclical. ÔÇ£Between projects around 95 percent of those staff members are laid off, and we then have to park our equipment and weather the hard times.ÔÇØThe cyclical nature of the work and the harsh operating environment means that the workforce is starting to age. ÔÇ£There arenÔÇÖt a lot of young people coming into the business,ÔÇØ Waschuk says, ÔÇ£because they donÔÇÖt want to work outside in all weather and they want steady employment.ÔÇØ But for those who do join, the rewards are very good. While they are engaged in a contract theyÔÇÖre paid roughly five times the normal salary. ÔÇ£But they have to have another career or other source of income to go to once the project is completed.ÔÇØThe company is currently engaged in the construction of a major portion of the Alberta Clipper Pipeline for Enbridge, the worldÔÇÖs largest crude oil and liquids pipeline operator. The new pipeline will originate at Hardisty, Alberta, and extend across Saskatchewan and Manitoba to terminate at Superior, Wisconsin, where it will connect with a main pipeline that extends south to the Chicago area. The 36-inch diameter pipeline will eventually carry refined crude oil from the upgraders in Edmonton to customers in the United States.Waschuk Pipeline is one of five companies participating in the construction of the 1,070-kilometer (665-mile) Canadian portion of the pipeline, and the company is responsible for laying almost a third of that, a 345-km section in Saskatchewan. Company responsibilities, however, extend beyond construction to protecting the natural environment. Topsoil, for example, is carefully conserved and replaced once the work is completed, the pipeline is laid in such a way that it avoids endangered plants, and the workforce is careful not to disturb animals such as frogs, owls and eagles.Already five months into the job, the work is scheduled for completion in November 2009. The weather is perhaps the greatest risk that has to be factored into the work schedule, but in recent months Waschuk Pipeline and one of the other participating companies have been delayed by actions of the native population, who demand a share of the profits for crossing their reserve. ÔÇ£They blockaded the company for four days in October. In the end, Enbridge came and negotiated a deal, they took the blockade down, and we havenÔÇÖt had any problems since.ÔÇØ Looking beyond that 2009 completion date, the tough economic climate seems to be having some impact on the oil industry. ÔÇ£Six months ago there were several more big projects to bid on with the same owner. One pipeline was to have been constructed from the oil sands region to Edmonton, and another was to go from Edmonton out to the Pacific Ocean. Those jobs were supposed to start in December 2009 and continue for three to five years. But now, with this economic climate, those projects have been pushed out six months to one yearÔÇömaybe even longer.ÔÇØWaschuk is, however, very upbeat about the future. ÔÇ£As long as the US and the world need oil, weÔÇÖre going to have nothing but good things happening for many years to come,ÔÇØ he says. ÔÇ£Tens of billions of dollars are being spent developing the oil sands region, and all that oil will require transportation via pipeline.ÔÇØ┬á