$7 Billion Keystone XL Labor Agreement Announced

September 2010 Vol. 237 No. 9

A $7 billion project labor agreement (PLA) was signed September 14 between the United Association and TransCanada Corporation to begin construction on the Keystone Gulf Coast Expansion Pipeline (Keystone XL).

In a time when the contruction industry is facing record unemployment, this project is expected to create thousands of jobs for the members of labor organizations.

This extensive oil pipeline project is projected to require over seven million work hours and distributed in 13,000 new jobs. When completed, the pipeline system will increase capacity by an additional 500,000 barrels per day and increase the U.S. gross national product by nearly $10 billion per year.

“The United Association of Plumbers, Pipefitters and Sprinklerfitters (UA) is proud to be a part of this collaboration and looks forward to adding thousands of well-paying construction jobs to this country,” said UA General President William P. Hite. “Our highly-skilled workforce is ready to begin work and help boost our local and state economies.”

A report from the Perryman Group finds that construction of the Keystone XL pipeline will provide short-term contributions to the U.S. economy valued at over $20 billion. The pipeline – stretching from Alberta, Canada, through Montana and other Great Plains states, down to Texas – is estimated to make an initial impact to state economies of:
• Montana: $421 million
• South Dakota: $470 million
• Nebraska: $468 million
• Kansas: $683 million
• Oklahoma: $1.2 billion
• Texas: $2.3 billion

The companies estimate the long-term benefits to the U.S. economy to include 250,000 permanent jobs and an annual increase in total spending of $100 billion

TransCanada signed a PLA with the UA and other organizations to establish a comprehensive pre-hire collective bargaining agreement that includes terms and conditions of employment and construction. The agreement is intended to prevent strikes and work stoppage.

The PLA was signed by TransCanada, the UA, the Laborers International Union of North America, the International Brotherhood of Teamsters and the International Union of Operating Engineers. Firm timelines have been established and the initial phase of construction will begin in the first quarter of 2011 with completion planned by early 2013.