Oil sands project offers challenge, opportunity

Tad Gropp looks at a bid list from Canadian Natural Resources Ltd. and drools.

Projected cost of an ore preparation plant, $50 million. Froth treatment, another $50 million. Cogeneration, a whopping $120 million.

Canadian Natural Resources is developing the Horizon Oil Sands Project in northern Alberta. The effort, according to the company, is Canada’s largest construction project, with total investment expected to reach almost $11 billion over seven years. In the second quarter alone, the company let contracts worth $400 million. Even in Canadian, that’s huge money.

“It’s just unbelievable the amount of work up there,” says Gropp, the president of Gropp Electric Inc. in Spokane. Gropp, founded in 1990, employs between 35 and 40. Recent local projects include student housing at Gonzaga University and the Coeur d’Alene Public Library.

But Gropp is willing to go much farther afield. The company has taken on work from California to North Carolina. Right now, a crew is wiring up an ice cream freezer in, of all places, Anchorage, Alaska. By comparison, Alberta is practically next door.

And that Canadian Natural Resources bid list is tempting. Gropp says he could handle an additional $5 million in work each year, and the timetable on some of those oil sands contracts works out almost perfectly.

If only he could get his company and its employees through the Canadian paper mill.

Despite encouragement from Associated Industries and the International Trade Alliance in Spokane, as well at Canadian Natural Resources, Gropp says he has been befuddled by the bureaucratic hurdles to getting his company and crews cleared to work in Canada. The problem is less one of non-cooperation, he says, than it is one of everyone in both the public and private sectors being pressed for time. And he can only do so much by phone and Internet.

Canadian contractors are so busy they are not looking for U.S. partners, he adds, and the grip unions have on oil sands work has also been a concern for non-union Gropp.

With no detectable sarcasm, Gropp says “It’s like starting a business in Washington. It can’t be any harder.”

Roberta Brooke, executive director of the International Trade Alliance, says she and Alberta’s trade minister co-chair a group of officials identifying all the issues plaguing Gropp and other regional companies interested in work across the international border. Area contractors too busy to bother with distant projects today, she says, may regret it when local work dries up while oil sands development continues, probably for decades.

Reserves, the world’s second largest, are estimated at 300 billion barrels.

Brooke says Gropp, who has tentative plans for a business trip to Calgary next month, has the right idea. “You have to learn who you’re dealing with first-hand,” she says.

The government of Alberta is working with Human Resources Canada to get more U.S. workers licensed, says Sharon Atkins, a trade specialist at the U.S. Consulate in Calgary.

“We have no workers. None,” she says. Restaurants and service stations are closed for lack of employees. “They’re having signing bonuses for cocktail waitresses, for Pete’s sake,” she says.

Atkins says oil companies are going all the way to China to get the help they need. Unions recognize the severe shortage of skilled tradesmen and have become more accommodating.

But, adds the helpful Atkins, rules are rules, even if it takes up to three months to get an employee licensed. “He’s coming from a foreign country. He still has to have his ducks in a row.”

Gropp says he plans to do just that when he can get face-to-face with those who can provide the licenses and other documentation he needs. As something of a guinea pig for Associated Industries, he also hopes he can show other contractors, as well as manufacturers, the way to the oil sands frontier.

Looking at the bid lists, Gropp says, “It’s all work that could be done in Spokane and shipped north.”

Gropp would not be the first. Rahco International delivered a $10 million conveyor system to one oil sands developer last year. But his success would be a breakthrough for smaller Spokane companies.

Who knows? Maybe cocktail waitresses will be next.