Thursday, December 16, 2021

ITS NOT GREEN EXCEPT FOR THE GLOW
Shunned after Fukushima, nuclear industry hopes smaller reactors can play role in energy transition

Proponents say small reactors are safer, but skeptics say the risks outweigh the benefits

Author of the article: Gabriel Friedman

Publishing date:Dec 15, 2021 
An artist's rendering of USNC-Power's small nuclear reactor
. PHOTO BY COURTESY USNC-POWER


At the Ultra Safe Nuclear Corporation, a large part of Ken Darlington’s job involves convincing the public that the latest generation of nuclear technology is safe — so safe, in fact, that it can be mass produced.

The USNC-Power, as the U.S.-based company is known in Canada, is developing the smallest nuclear reactors around — designed to produce enough power to provide electricity for about 5,000 homes, or roughly five megawatts. If all goes according to Darlington’s plans, as vice president of corporate development in Canada, there could be around 100 reactors around the country in two decades.

That’s a huge jump: Canada has roughly 19 large reactors, each around 900 megawatts, at six plants. As efforts to reduce emissions gather momentum, Darlington and others are advocating for nuclear power as a less carbon-intensive alternative to fossil fuels. But the high cost of nuclear power, as well as the catastrophic safety record, as seen in the 2011 Fukushima disaster in Japan as well as the Chernobyl meltdown in 1986 and others, has stopped the industry’s expansion.


“I think it’s going to come down to the perception of the safety issue,” Darlington told the Financial Post. “That’s where a lot of the work needs to happen.”

It’s been about a decade since a tsunami off the coast of Japan triggered the Fukushima nuclear power plant meltdown — the latest in a string of nuclear disasters stretching back to Chernobyl in 1986 — which resulted in hydrogen-chemical explosions, the release of radiation, the evacuation of more than 140,000 people, and which is still being cleaned up.

Workers walk near No. 2 and No. 3 reactor buildings at the tsunami-crippled Fukushima Daiichi nuclear power plant in March. 
PHOTO BY SAKURA MURAKAMI/REUTERS

There are also issues around nuclear waste: for more than a decade, Canada has been searching for a permanent underground repository where it can leave the radioactive waste, a byproduct of nuclear power generation, to decay — a process that is estimated to take hundreds of thousands of years. For now, nuclear waste remains stored nearby where it is produced.

Despite these issues, Darlington is helping lead an effort to revive nuclear power in Canada, through small modular reactors. The idea is to gain a licence for a design, and then deploy the model to outposts that are not connected to the electrical grid — to mines, oil projects and remote communities dependent on diesel.

“Anytime you have a new reactor design it needs to go through licensing,” Darlington said. “The whole idea is to have a consistent design, so you’re producing the same thing, every time.”

In 2020, his company’s Canadian subsidiary and Ontario Power Generation struck a joint venture to acquire Global First Power Limited, which aims to develop a micro modular nuclear reactor: it’s about the size of a tanker truck turned on its side, vertically, Darlington said.

It is planning to install a commercial demonstration project at Canadian Nuclear Laboratories’ Chalk River site, outside Ottawa, that will take up approximately two football fields, and consist of one plant that generates 15 megawatts of thermal heat, and an adjacent plant that converts the heat into five megawatts of electricity.

The Canadian Nuclear Safety Commission is currently reviewing a licence application for the reactor, and Canadian Nuclear Labs is conducting a process to site the micro modular reactor on its property. The power would be deployed into the grid.

An aerial view of the Chalk River site on the shores of the Ottawa River. 
PHOTO BY CANADIAN NUCLEAR LABORATORIES

Meanwhile, separately, Ontario Power Generation, announced a deal earlier this month, in which General Electric and Hitachi would build a small nuclear capable of generating enough power to produce 300 megawatts of electricity — at its Darlington plant.

Proponents such as Darlington say that small reactors rely on new technology that reduces the possibility of the runaway chain reactions and other failures that led to disasters in the past.

Nuclear fission works by splitting atoms through a process that generates enormous amounts of heat, which in turn is used generate electricity. For instance, the heat can create steam to power a turbine.

An artist’s rendering of USNC-Power’s small nuclear reactor. 
PHOTO BY COURTESY USNC-POWER

But containing the heat creates risks: in Japan, floods from the tsunami knocked out the emergency diesel generators that were powering the cooling process, which led to a meltdown of the reactor.

Darlington says Global First Power is safer than past nuclear projects of larger scale: it uses passive, cooling systems, which make runaway meltdowns impossible, he said. Plus, it uses small pellets as fuel, which Darlington said are safer than the rods used at larger reactors.

Also, it’s cheaper, he said, because the reactors are designed to be produced at scale, whereas in the past all nuclear projects have been one-of-a-kind, subject to cost overruns and construction delays. He projected a reactor would cost about $200 million.

There are many skeptics.


M.V. Ramana, a professor of public policy at the University of British Columbia’s School of Public Policy and Global Affairs, said nuclear power is inherently expensive, and past projects were designed to be larger in order to reduce costs by capturing economies of scale.

He also said past projects have tried to use passive cooling systems, but nuclear fission is inherently dangerous and it’s difficult to judge the safety of reactors that haven’t been licensed or produced yet.

“What we know about nuclear accidents is just about every one of them is unique in the way it happened,” said Ramana. “There are many ways of having an accident.”

For that reason, he said the risks outweigh the benefits: even if 100 small modular reactors were deployed, it would constitute just a small portion of the country’s electricity supply, but each reactor would generate radioactive waste and pose the threat of an accident.


What we know about nuclear accidents is just about every one of them is unique in the way it happened
M.V. RAMANA

Neil Beveridge, an analyst at research firm Sanford C. Bernstein & Co, LLC, wrote that small modular nuclear reactors are attracting a lot of attention amid a flood of investment into decarbonization technology.

“While nuclear has many problems, including safety and cost competitiveness, the one big advantage is that it offers baseload clean energy supply, which is hard to replicate,” Beveridge wrote in a note to investors earlier this month.

Given the variable nature of wind and solar power, dependent on weather, there is growing interest in whether nuclear can be harnessed as a clean baseload power source, he wrote, adding that the promise of cost-competitiveness and safety remain untested.

Darlington said USNC was founded in 2011 by a family office in Seattle, and its technology spun out of U.S. National Laboratories. So far, he said, the company has raised $100 million from U.S., but the company’s investors and balance sheet remains private.

Given the history of nuclear disasters, in which radioactive material has leaked into the environment, he said persuading the public on the safety of new small modular reactors will be a critical factor in adoption. Still, Darlington declined to disclose information about his company’s founders or investors.

Similarly, Ontario Power Generation, structured as a corporation but owned by the province, declined to disclose the terms of its deal with USNC-Power to acquire Global First Power in 2020, including the price of the acquisition or other details about the proposed Chalk commercial demonstration reactor at the Chalk River Lab.

Robin Manley, vice president of new nuclear at OPG, said the aim is to use small modular nuclear reactors for industrial purposes, whether powering a remote mine and then maybe use the excess power generated during off-peak periods to produce hydrogen — another clean fuel.

But he acknowledged the technology remains a future option. Even at Chalk River, OPG is targeting 2026 as a start date for the 5 MW micro modular reactors, while the GE Hitachi small modular reactor, of around 300 MW capacity, will not be ready until 2028.

‘It’s going to be cost-competitive or cheaper than diesel,” he said, but added, “When you haven’t actually built a project yet, you don’t yet know the full cost.”


 Thunder Bay·In Depth

Small northwestern Ontario town considers if it's willing to house nuclear waste from across Canada

Decision on whether Ignace will have nuclear waste repository will come in the next year

Janet Griffiths, William Marsh, Brad Pareis and Sheila Krahn, left to right, have mixed feelings about a plan to store nuclear waste in northwestern Ontario. (Jeff Walters/CBC News )

A small town in northwestern Ontario is facing a big question: How to determine whether people in the community want to host a site that would store nearly 5.5 million spent nuclear fuel bundles from across Canada. 

The issue's been ongoing for years in Ignace, with a population of about 1,300, 250 kilometres northwest of Thunder Bay.

But now, it's one of two communities left in the search by Canada's Nuclear Waste Management Organization (NWMO) to find a host community for its proposed deep geological repository.

Canada's nuclear electricity producers created the non-profit in 2002. It's responsible for coming up with a long-term management plan for Canada's used nuclear fuel. 

The fuel bundles are about the size of a fire log, and each bundle holds about 20 kilograms of uranium. The final two sites for the proposed storage facility are in Ignace and South Bruce, about 100 kilometres from Kitchener. 

A spokesperson for the NWMO said that unless the community is willing to host the site, the project won't go ahead. Organization officials have repeatedly said they welcome public discourse and debate, while promising a safe solution in line with international best practices. 

Right now, a consultant is in the process of determining what criteria need to be met to prove the community does, in fact, support the project. 

The entire process to gauge whether Ignace could be the site of the facility started a decade ago. 

Within the last few years, drilling has taken place at six sites surrounding the community, some of which are halfway between Dryden, the closest major centre, about 100 kilometres away, and Ignace.

For many, the saga has dragged on, but it is nearing the finish line. A final decision is expected in about a year.

In the meantime, CBC News visited Ignace and nearby Dryden to talk to residents about the project and what they're looking to see from officials going forward. 

An 'informed and willing host'? 

"Ignace is the community that said, 'We want to be involved, we want to be an informed and willing host,'" said Brad Greaves, chair of the Ignace Community Nuclear Liaison Committee.

"But the actual engagement outside of our community is the [nuclear waste management organization's] responsibility."

The community liaison committee was established by the Township of Ignace as a go-between for townspeople and the local government. It's made up of people who live in the community and has representatives from nearby Wabigoon and Dryden. 

Greaves said his committee will determine if the community is willing to have the town affiliated with the nuclear waste site.

He said the site is an opportunity for a community with little industry and a shrinking population. 

"Anything, whether it be a mine or forestry, when industry comes to a town, a real spark of life come back," he said. "Socioeconomics is a big part of this project too. It's not just the fact that there's going to be nuclear fuel put underground for long-term storage. And, it's not just Ignace — it'll be the whole area."

But Greaves's opinion on the project is far from the consensus needed. The decision to bury nuclear waste is contentious, and he said it is probably the biggest decision ever made by the township.

Marsh, outside his home in Ignace, is concerned the Nuclear Waste Management Organization (NWMO) is taking advantage of a small community, with a struggling economy, by offering to create jobs in exchange for burying nuclear waste. (Jeff Walters/CBC)

William Marsh has lived in Ignace off and on for a number of years, and feels moving the waste to a small town in northwestern Ontario would be an out-of-sight, out-of-mind decision for the nuclear waste organization. 

"Why should they have to put it here?" he asked. "Because we're in the middle of nowhere? Right?" 

Why should they have to put it here? Because we're in the middle of nowhere? Right? - William Marsh, Ignace, Ont., resident 

He said he doesn't trust the information coming from the NWMO and does not support the project. 

"Just because they say it's not going to leak, doesn't mean it's not going to leak."  

Marsh, like others who have worries about the project, is concerned about a potential leak or spill and what could happen to ground and surface water, despite assurances the proposal is safe. 

"We believe in this project. We believe in the safety of this project, and that's why we're here," said Alexander Blyth, a section manager with the NWMO.

"We need to show and demonstrate the quality of this rock and our understanding of the area to demonstrate to the community and to our regulators, because the site will have to go to an impact assessment, and we'll have to prove how good this site is."

Blyth, a hydro geologist, said he's heard the concerns people have about their fears of groundwater contamination.

"From a technical standpoint, ultimately, the water issue is a really important one, and it ties into the safety assessments that are done, it ties into the engineering work that is going to be done underground, so it is all about the water."

Pareis, who lives in Dryden about 45 kilometres from the proposed nuclear storage facility, says he thinks his community should have just as much of a say about the site as Ignace, which is only five kilometres closer to the proposed deep geological repository. (Jeff Walters/CBC)

The debate has spread from Ignace to Dryden, about 100 kilometres away.

People in Dryden, which has nearly 8,000 residents, are concerned about the proposed site too, and want a greater say on the matter. 

"We have a river here in town, the Wabigoon that's been rendered basically a dead river by industrial waste already, so it surprises me that people aren't taking the example of that and extrapolating," said Brad Pareis, who lives in Dryden.

Pareis said he's only learned in the last few months how close the proposed site is to his home community.

"We're told by our council that this isn't our [Dryden's] decision to make, and that seems a little ironic," he said. "We are a neighbouring community, we have about eight times the population of Ignace, so I think it should be partially our decision. It should be a provincial decision, because it's going on Crown land."

Pareis said he is uncomfortable with the way the NWMO is able to easily distribute its information without challenge. He said his children were taken on a field trip a couple of years ago to one of the borehole sites and were given information by the NWMO, but not opposing environmental groups. 

"Politically speaking, it really is a hot topic. Nobody really wants this in their backyard."

Mark Zimmerman, who owns a camp about 15 kilometres north of the proposed repository site, said he's heard nothing from the nuclear waste organization regarding the proposal. He said he wasn't even told when the organization was drilling a test hole about five kilometres from his doorstep.

"Why are we even thinking of bringing this nuclear waste up here? It's got nothing to do with northwestern Ontario. Keep it down there where it belongs."

Krahn, who is opposed to the idea of burying nuclear fuel near Ignace, stands on the deck of her home, complete with signs opposing the the NWMO site. (Jeff Walters/CBC)

Back in Ignace, Sheila Krahn, who has lived in the community for more than 30 years, said she's totally opposed to the concept. 

"Ignace should ask, 'What are they going to get?' I don't see anything coming to Ignace from this," Krahn said. Her concerns are environmental and worries about what will happen to water in the area if there is a spill or accident.

Ignace should ask, "What are they going to get?" I don't see anything coming to Ignace from this- Sheila Krahn, Ignace resident 

The opinion in the community is mixed, she said, with some for, some against, and some indifferent to the project.

Just down the street from Krahn, Naomi Peters sees the site as an economic boom, and it's an opportunity too good to pass up. 

"It's the economic stability that this project will add to this area that's been economically depressed for years. It's important for Ignace not to be a one-horse town," Peters said.

Still, she too has worries about the project, and wants the township to hire an independent nuclear expert to ensure all questions regarding safety can be answered. 

Naomi Peters relaxes along with her three dogs at her home in Ignace. She believes the NWMO project brings opportunity to the community. (Jeff Walters/CBC)

"The foundation of the project is informed consent," Peters said. "That word informed is important. It means that the vocal minority needs to sit down and take nuclear 101. They need to go through all of the training, all of that, and understand what, how and where this whole project entails."

Janet Griffiths, who has lived in Ignace for decades, is more indifferent to the idea of burying nuclear fuel. She remembers the so-called "good times" in the community, when a nearby gold mine employed hundreds and the township was booming.

Griffiths, who has lived in Ignace for decades, says she believes economic opportunities will come from the proposed NWMO nuclear site. (Jeff Walters/CBC)

"It needs to be moved from the shores of Lake Ontario, and needs to be put into an area that is bedrock and is secure. We have that here," Griffiths said.

If the plan proceeds in Ignace, "It's not going to happen in my lifetime," she figures, as it would take a decade for all the licensing and environmental approvals to the completed, plus another decade for construction of the repository itself.

"But the actual movement of that stuff, I'm going to be long gone," Griffiths said.



PUTIN'S POLLUTION
Russian ships traversing the Arctic leave marine trash in their wake: report

Amount of marine trash from all nations transiting Bering Strait is climbing as shipping increases 58 per cent in three years

Reuters
Yereth Rosen and Timothy Gardner
Publishing date: Dec 15, 2021
An increasing number of tankers are sailing through the Bering Sea, 
carelessly or intentionally leaving detritus as they go.
 
PHOTO BY GETTY IMAGES

Following another year of stark climate impacts in the Arctic, scientists warned Tuesday of a new scourge hitting the region: marine trash.

With the region warming twice as fast as the rest of the world, sea ice that has long blanketed the Arctic Ocean is disappearing, opening new routes to shipping. Scientists began noticing the trash bobbing in the icy water or piling up on beaches in the Bering Strait area last year.

“That’s a direct result of increased human maritime activities,” said climate scientist Rick Thoman of the Alaska Center for Climate Assessment and Policy, one of the lead editors of the 2021 Arctic Report Card released by the National Oceanic and Atmospheric Administration (NOAA).

The garbage shows “what climate change is allowing people to do in the region,” he said. Russian was the most common language on debris found in the Bering Strait on items where language could be identified, NOAA has said.

A direct result of increased human maritime activities

NOAA REPORT

Between 2016 and 2019, voyages by fishing, cargo and military ships jumped 58 per cent along the region’s busiest lane along the Siberian coast, and experts say the traffic will rise further as global temperatures continue to climb.

With the shipping traffic also comes noise . Underwater soundscapes in the Arctic have also become busier, with the rumble of ships passing, a problem for marine mammals who rely on sound to navigate and socialize, Thoman said.

The annual report, released at the conference of the American Geophysical Union, noted a new springtime sea ice record low in 2021, among other signs that climate change is fast transforming the region.

This year also saw the first rainfall on record over Greenland’s highest elevation. And earlier Tuesday, the World Meteorological Organization confirmed a new record high temperature for the Arctic in June 2020, when the Siberian town of Verkhoyansk hit a sweltering 38 Celsius.

“People who are living in the Arctic are already experiencing major challenges,” said report co-author Anna Liljedahl, a climate scientist with the Woodwell Climate Research Center.

By most annual metrics, 2021 was not an extraordinary year for Arctic warming. But it fit squarely with the trend of warming well beyond the rate of the global average. Average air temperatures were the seventh warmest on record over the past year, but hit a record high for fall 2020, the report said.

Along with other passages, melting sea ice is allowing for an increasingly straight shipping route from Europe’s largest port, Rotterdam, through the Bering Strait (at top) and into the Pacific Ocean. 
PHOTO BY COURTESY SCOTT STEPHENSON/UCLA)

And while the annual sea ice minimum in September was the 12th lowest on record, scientists noted that all 15 of the lowest minimums have occurred in the past 15 years.

“The loss of the great white cap that once covered the top of the world is one of the most iconic indicators of climate change,” said Rick Spinrad, the NOAA administrator.

Meanwhile, thawing permafrost and melting glaciers are undermining infrastructure and damaging livelihoods, the report warned. Especially worrying are landslides from once-frozen coastal cliffsides or mountains that now threaten to trigger tsunamis, as happened in 2017 in western Greenland, where a landslide-triggered tsunami at Karrat Fjord killed four people.

Arctic willow growing on the Kamchatka Peninsula in Russia’s far east region that borders the Bering Sea. 
PHOTO BY GETTY IMAGES

The last two summers also displayed exceptional “greenness” on the Arctic tundra — a measure of plant productivity. The greenness measure for the summer of 2020 was the highest on record, and preliminary data suggest 2021 had the second-highest greenness, according to the report.

The five highest tundra greening years on record have all occurred in the past 10 years.

That greening comes with consequences, not least the appearance of more beavers whose dam-building results creates ponds that result in even more thawing, the report said.

“Almost anytime you pool water on the tundra, put a new pond in place, you’re going to begin to rapidly thaw the permafrost surrounding it,” said Ken Tape, one of the report’s authors. It’s still unclear how much beaver activity might contribute to the release of carbon dioxide and methane from the once-frozen ground.
Bernie Sanders to join striking workers in Battle Creek as political pressure on Kellogg increases

Norah Mulinda, Bloomberg
and Josh Funk, Associated Press

Rey Del Rio/Getty Images via Bloomberg
Kellogg's cereal plant workers demonstrate in front of the cereal plant in Battle Creek in October.

Sen. Bernie Sanders plans to rally with striking Kellogg Co. workers in Battle Creek on Friday, highlighting an issue that also has drawn the attention of President Joe Biden.

Kellogg is facing increasing political pressure to resume contract talks with its 1,400 cereal plant workers who walked out Oct. 5.


Bernie Sanders

Sanders, a former Democratic presidential candidate, heads to Michigan after Kellogg said last month it was planning to hire replacement workers "where appropriate."

"Kellogg's workers made the company billions during a pandemic by working 12-hour shifts, some for more than 100 days in a row," Sanders said in a tweet Tuesday. The company is "now choosing corporate greed over the workers they once called 'heroes'."


Last week, Biden said he was "troubled" by Kellogg's plan to replace the striking workers and urged the two sides to reach an agreement.

Meanwhile, Nebraska Gov. Pete Ricketts sent a letter to the company's CEO this week urging the company to return to the bargaining table with workers at its four plants nationwide, including one in his state.

Ricketts said in his letter that the Battle Creek-based company should recognize the contributions its workers have made during the pandemic by continuing to produce its well-known brands of cereal and try to retain them during this period when many companies are struggling to hire enough workers.

"Despite the challenges of the global pandemic, they showed up day after day to do their jobs so that across the country there was food on the shelves," said Ricketts, a Republican. "These workers helped Kellogg's increase sales and revenue (and grow net income by over 30 percent) from 2019 to 2020 — a time when many businesses endured losses due to the financial headwinds of the pandemic."

Michigan Gov. Gretchen Whitmer, a Democrat, has not publicly weighed in on the work stoppage.

Members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union overwhelmingly rejected a contract offer from the company last week that would have delivered 3 percent raises and preserved their current health benefits.

Union members have said they remain concerned about the company's two-tiered system of wages that has been a sticking point during contract talks. The company said its offer would have allowed all workers with at least four years of experience move up to the higher legacy pay level, but union officials said the plan wouldn't let other workers move up quickly enough. And the company proposed eliminating the current 30 percent cap on the number of workers at each plant who receive those lower wages.

Biden said in a statement Friday he believes Kellogg was undermining the collective bargaining process with its plan to hire permanent replacements for the striking workers.

"I am deeply troubled by reports of Kellogg's plans to permanently replace striking workers from the Bakery, Confectionery, Tobacco Workers and Grain Millers International during their ongoing collective bargaining negotiations," said Biden, the Democrat who has long been a strong supporter of unions. "Permanently replacing striking workers is an existential attack on the union and its members' jobs and livelihoods."

Throughout the strike, Kellogg has been trying to keep its plants operating with salaried employees and outside workers, but it said after the contract vote that it would move forward with plans to hire permanent replacements.

Kellogg spokeswoman Kris Bahner said the company believes its contract offers have been fair and it remains willing to negotiate with the union although no additional talks are scheduled at the moment. She said last week's offer would have improved workers' wages and benefits.

"We are very disappointed that it was ultimately rejected. We have an obligation to our customers and consumers to continue to provide the cereals that they know and love — as well as to the thousands of people we employ," Bahner said.

The strike includes four plants in Battle Creek; Omaha, Neb.; Lancaster, Pa.; and Memphis, Tenn., that make all of Kellogg's brands of cereal, including Rice Krispies and Apple Jacks.

The Kellogg’s strike is testing the union’s theory of a labor shortage


Michelle Cheng
Wed, December 15, 2021

Striking Kellogg workers picket outside a plant in Michigan

In a tight US labor market, unionized workers have been demanding more. But labor is perhaps starting to lose the upper hand.

Following the failure to reach a contract with its union, Kellogg’s said it is permanently replacing striking workers. Some 1,400 hourly employees, who are part of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, walked off the job across four cereal plants in Michigan, Nebraska, Pennsylvania, and Tennessee starting Oct. 5.

The rejected contract offer would have included a 3% wage hike for legacy employees and increases for newer hires. The company proposed eliminating the cap on the share of lower-tier workers, but some union employees were worried that would put downward pressure on veteran workers’ wages if lower-tier workers became a majority.


The food manufacturer has been on a hiring spree to replace the striking workers. The hourly rates for replacement workers posted on the Kellogg’s job board are $21.72 an hour for “general labor” and $34 to $37 for “skilled labor”, depending on the role. That’s comparable to the pay for the unionized legacy employees, who make on average $35.26 an hour, according to Kris Bahner, a company spokesperson.


The fact that the replacement wages are more or less the same as the previous pay suggests the labor market may not be as tight as union activists believe.

The unemployment rate in Battle Creek, Michigan is worse than the US average

In Battle Creek, Michigan, where Kellogg’s is headquartered, the labor situation has been challenging.

The unemployment rate in the city was 6% in October, which is higher than the national average of 4.6%, according to data from the US Bureau of Labor Statistics. The job opening rate, or the share of available jobs of all filled and unfilled positions, in the nondurable good industry—which includes Kellogg’s, one of the largest employers in the city—was 8%, higher than the national average of 6.9%. Meanwhile, the hourly earnings of all private-sector workers in Battle Creek was $26.22 in October, suggesting that Kellogg’s workers are highly compensated compared to the relative jobs in the area. That may boost the company’s confidence it will find workers to replace the ones striking, and undermine the union’s bargaining power.

“There’s a lot of potential labor supply for these jobs,” says Donald Grimes, a regional economic specialist at University of Michigan. “The idea that people are not going to take these replacement jobs is a bit inaccurate.”

Still, while the pay is high, it’s possible Kellogg’s is bluffing, Ruth Milkman, a professor at the City University of New York’s School of Labor and Urban Studies, wrote in an email. She said that while permanently replacing striking workers is both standard operating procedure and legal, recent strikes have not seen this outcome because it’s hard to find workers.

Labor resurgence?


From Nabisco to Amazon, the heightened labor activity in part stems from the pandemic, which has forced workers into more unsafe working conditions or less favorable schedules. Meanwhile, lower-wage workers, like those in the restaurant or retail industry, have been quitting at record rates, signaling that they feel confident they can find better jobs elsewhere—and can do so without a union.

But there are reasons to think that Kellogg’s union should have perhaps taken the deal.

The union may have had confidence its workers would not want to cross the picket line, but it’s not clear if that will be the case since the region’s unemployment rate is high and wages for Kellogg’s workers are better than the average job in the area. “I would just be a little bit careful if I was on the high end of the payscale if I was a union member,” says Grimes. “You could go overboard.”

And, despite most Americans supporting unions, union enrollment has been on a decline for decades. Just 10.8% of US employees are part of unions, according to the latest BLS data. Part of the reason for that is just how organizations have become more fragmented, according to Grimes. He adds, an increasingly larger share of jobs are in industries that have smaller firms, and it’s just harder to unionize smaller shops.

The bakery union still represents tens of thousands of workers at other companies, but the risk for striking workers is not just other workers filling their spots but also more investment in robots and automation to replace those workers, says Grimes. It’s possible that even if Kellogg’s union workers win this battle, they could still lose the war.

Ken Klippenstein discusses demands of striking Kellogg workers

12/15/2021

Investigative reporter Ken Klippenstein on Monday delved into the demands of striking Kellogg workers, as well as the company's reaction to their efforts.

In an interview on Hill TV's "Rising," Klippenstein, who has been covering the strike, said he is hearing frustration from workers that "management was getting its side of the story across" more successfully. He noted that the company is "calling in over 1,000" replacement workers and "looking to hire them permanently."

Last week, Kellogg North America President Chris Hood said the company would need to move forward its regular operations after having 19 negotiation sessions with striking workers.

About two months ago, roughly 1,440 Kellogg employees began striking when the company and their union, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, had a contract dispute.

After the employees rejected a proposed five-year contract, Hood said that Kellogg had "no choice but to continue executing the next phase of our contingency plan including hiring replacement employees in positions vacated by striking workers."

During his interview, Klippenstein said such a decision is "something that's illegal in a lot of countries."

He said the employees "voted against a proposal from the company which would set up a two track pay system wherein new hires, new employees would not enjoy the same benefits which not only senior employees had enjoyed but junior ones in the past historically had been given."

"This strike really is an act of sympathy from the older workers who want there to be one pay system partly out of solidarity with the younger workers but also because they recognize that setting up a two track pay system has a sort of downward and depressing effect on their wages at the top too," he said.


Striking Kellogg’s Workers Vow to Hold Out for Better Contract, Urge Boycott of Company Products

Kellogg’s announced it would begin permanently replacing the 1,400 workers who have been on strike for over two months to demand fair wages and better working conditions. The move comes after an overwhelming majority of Kellogg’s workers rejected a new five-year agreement they say falls short of their demands and sparked widespread public backlash, including from President Biden. “We are fighting for equal pay and equal benefits regardless of what the company is putting out there, and trying to replace us is something that they’re using as a scare tactic,” says Kevin Bradshaw, a striking Kellogg’s worker and president of Local 252G in Memphis, Tennessee. #DemocracyNow Democracy Now! is an independent global news hour that airs on nearly 1,400 TV and radio stations Monday through Friday. Watch our livestream 8-9AM ET: https://democracynow.org
 

What workers are striking against: A global profile of the Kellogg Company

Tom Hall
WSWS.ORG

“The pandemic presented us with a sampling event like none other and we saw increases in household penetration that outpaced most of our categories...” This is how Kellogg’s CEO Steve Cahillane summed up the company’s performance during 2020, when widespread lockdowns drove demand for packaged foods as millions sheltered in their own homes. Net income for the breakfast cereal giant increased 30 percent to $1.25 billion, and revenue jumped slightly to $13.77 billion.

This rosy description of the coronavirus pandemic, which has killed 800,000 in the US alone, is an example of the cold logic driving forward the company’s attempts to smash the two-month strike by 1,400 cereal workers in the United States. It responded to their overwhelming rejection of a concessions contract brokered by the Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union (BCTGM)—that would have eliminated restrictions on the hiring of lower-paid, second tier workers—by declaring it would accelerate plans to fire and replace the strikers en masse. This autocratic move sparked outrage among workers around the country and the world.

Kellogg World Headquarters, Battle Creek, Michigan, USA (source: Wikpedia)

But this ruthless campaign is not the product of a company struggling for survival. Indeed, Kellogg’s remains as highly profitable as it has been in its more than 110-year history, and it has expanded its operations significantly in recent years, driven by ruthless cost-cutting. Indeed, breakfast cereal is among the most profitable segments in the food processing industry, which Yahoo! in turn recently rated the 14th most profitable industry in the world.

In 1995, when the International Committee initiated a campaign against Kellogg’s global job-cutting campaign at the time, we noted that Kellogg’s had already vastly increased its international scope. Of its global workforce of 15,000 at the time, 7,000 lived outside of the United States, and the company was expanding aggressively into emerging markets such as southeast Asia and the former Soviet Union. The company had made $705 million in net profits the year before, on worldwide sales of $6.6 billion.

At the same time, the company controlled 42 percent of the global cereal market and was locked in a bitter struggle over market share with rival General Mills.

Since then, both the company’s revenue and profits have roughly doubled. Kellogg’s earnings before interest and taxes (EBIT) were $1.6 billion, with an 11.6 percent profit margin. By comparison, Ford Motor Company reported of $1.63 billion on $115.8 billion in revenue, making the world’s fourth-largest auto manufacturer slightly more than one-tenth as profitable as Kellogg’s.

Dividends, meanwhile, have increased for decades, and now stand at $2.31 cents a share. At a share value of $63.37, this means Kellogg’s dividend yield is 3.5 percent, more than twice the average of the S&P 500. Even though many other large companies suspended dividend payments last year to conserve cash during the pandemic, Kellogg’s continued to dole out tens of millions of dollars to its shareholders.
A globalized food company

In spite of this, Kellogg’s market share in breakfast cereals has continuously eroded since the 1990s. Its US market share declined from 36 percent in 1995 to 30 percent in 2017. This is one factor in the company’s growing diversification into different segments of the prepared foods market. It has done this through a series of high-profile mergers and acquisitions that will continue to play a critical role in the company’s current “Deploy for Growth” strategy, which targets accelerated growth rates of between 1 and 3 percent.
Map of Kellogg's international factories (source: Kellogg's)

These mergers have expanded Kellogg’s from a cereal maker primarily centered around on the US market to a multinational producing a wide variety of packaged foods for different markets across the world. The most high profile of these acquisitions was arguably its $2.7 billion purchase of potato chip brand Pringles in 2012 from Proctor & Gamble. Most of its recent acquisitions, however, have focused on international brands and joint ventures.

These include:
A joint venture announced in 2012 with Singapore-based Wilmar International focused on the growing Chinese snack market;
Another joint ventured in 2015 with Tolaram Africa focused on West Africa. Kellogg’s later invested another $420 million into the venture;
The purchase of majority stakes in Egyptian food companies Bisco Misr and Mass Food Group, also in 2015;
A 2016 acquisition of a controlling stake in Brazilian food company Parati for $429 million

As a result of these moves, breakfast cereals occupy a substantially smaller portion of the company’s sales than it did less than 20 years ago. According to a 2018 slide show for investors, the proportion of cereal as a total of net sales declined from roughly two-thirds in 2005 to less than half in 2017, while snacks, a category that includes products such as Cheezits, Pringles, Town House crackers and Nutri-grain bars, doubled to 52 percent. The volume of products sold in the United States as a share of worldwide also declined in this period.

The company’s workforce has also doubled since 1995 to approximately 30,000 today. Currently, it operates 52 plants worldwide, half of which are located outside of North America. These include three plants in Russia, three in South America, three in Africa and two in India. Slightly less than half, or 25 of these plants, actually produce cereal, with others producing frozen foods and pre-packaged snacks. Only five of the company’s 26 factories in the US and Canada, four of which are involved in the current strike, produce cereal (the fifth, a new plant located in Belleville, Canada, is not a party to the same labor contract as the US plants).

The 1,400 workers on strike in the four US cereal plants comprise less than five percent of Kellogg’s the global workforce. This is, in part, the product of relentless job-cutting campaigns, such as the one in 1995 that eliminated 1,075 jobs worldwide. The cuts have reduced the workforce of these plants to a fraction of what they were a generation ago. The company’s flagship plant in Battle Creek, Michigan currently employs only 410 workers, less than a quarter of the 1,700 people who worked there in 1995.

Kellogg's plant in Querétaro, Mexico (source: Kellogg's)

Kellogg’s global workforce has been subjected to repeated job cuts. The most recent of these, “Project K” which was completed just before the pandemic in 2019, eliminated 7 percent of the global workforce, resulting in an estimated cost savings of $700 million per year, according to the company.

At the same time, Kellogg’s has demanded repeated concessions from workers’ wages and benefits, supposedly in the name of “saving” jobs. Before and during the 2015 contract talks, it locked out workers at the Memphis plant and threatened to close an unnamed US plant if workers did not accept the establishment of a new second tier of lower-paid “transitional” workers. The BCTGM obliged, pushing the contract through, but its repeated acceptance of concessions has not saved a single job.

In part to deflect attention from this record, the BCTGM is promoting a ferocious anti-Mexican campaign, calling on Kellogg’s and other companies to cease production in Mexico and blaming foreign workers for the loss of jobs and wages in the United States. This racist agitation has been taken up by the far-right news outlet Breitbart, which is a key media promoter of Trump’s ongoing attempts to build a fascist, extra-constitutional movement. In fact, Trump’s nationalist “America First” tirades, directed against Mexico in particular, had been the stock in trade of the American unions for decades before Trump emerged as a major political figure in the Republican Party.

In reality, Kellogg’s presence in Mexico goes back decades, and it was the first non-English speaking market that the company expanded into. The Kellogg’s plant in Queretaro, Mexico was built in 1951, making it decades older than the US plant in Lancaster, Pennsylvania.

While the company has, almost from the start, conducted business on a multinational scale, the international expansion of Kellogg’s and the global integration of capitalist production over the past four decades has rendered the national-based strategy of the BCTGM, and indeed the trade unions as a whole, hopelessly obsolete. It serves only to isolate the striking workers in the United States from their most powerful allies in Kellogg’s global workforce and the international working class as a whole, all of whom would be outraged to learn of the company’s strikebreaking efforts. Indeed, Kellogg’s is attempting to weather the strike by utilizing its international supply chains to compensate for lost production in the United States.

Kellogg's facility in Lagos, Nigeria (source: user on Nairaland messageboard)

But the international dimensions of Kellogg’s operations are a source of strength for workers, not weakness. Kellogg’s, like any other major international company, is extremely vulnerable to disruptions in its global supply chains and a global campaign among Kellogg’s workers to unite with workers in the US would have a powerful impact.

Workers in Mexico have repeatedly demonstrated their determination to oppose their exploitation. In January 2019, auto parts and electronics workers in Matamoros, just across the border from Brownsville, Texas revolted against the poverty wages and sweatshop conditions at the US and other foreign-owned maquiladoras. They staged a series of wildcat strikes in defiance of the company-controlled unions and marched to the border where they appealed to their class brothers and sisters in the US to join them.

In the summer and fall of 2019, workers at the General Motors factory in Silao, Mexico refused to work overtime during the strike by 45,000 GM workers in the US. For their courageous act of class solidarity, GM fired and blacklisted the leaders of the struggle. In response, rank-and-file workers in the US called for their reinstatement and donated money to support the victimized Mexican workers.

The American media, the BCTGM, the United Auto Workers and other US unions blacked out any information about these struggles in order to keep perpetuating the poisonous lie that Mexican and American workers are enemies.

Among striking Kellogg’s workers in the US there is enormous sympathy for their coworkers in Mexico and the developing world, whom they regard as a super-exploited “third tier” of workers.

Kellogg’s has an international strategy to pit workers against each other in a race to the bottom. To defeat this, workers need their own international strategy. That means rejecting the divide-and-conquer nationalism promoted by the BCTGM and reaching out to their class brothers and sisters around the world to defend the jobs, living standards and working conditions of all workers.

This requires taking the conduct of the strike out of the hands of the pro-company union by establishing a rank-and-file strike committee, independent of the BCTGM, to establish lines of communication and joint action by workers across Kellogg’s global empire.
CAPITALI$T CRI$I$; OVERPRODUCTION
About half of U.S. oil pipeline space is empty after boom time building spree


By Stephanie Kelly
© Reuters/Nick Oxford FILE PHOTO: Pipelines run to Enbridge Inc.'s crude oil storage tanks at their tank farm in Cushing

NEW YORK (Reuters) - About half of U.S. oil pipeline space is sitting unused, heating up competition for barrels in higher-output areas like the Permian Basin in Texas.

Overall U.S. pipeline capacity utilization is at around 50%, compared with a range of 60% to 70% headed into early 2020 before the coronavirus pandemic hit, according to consultancy Wood Mackenzie.

Pipelines overall are now half-full, as production, which surged to 13 million barrels per day in early 2020 to make the United States the top oil producer, has averaged just 11 million bpd in 2021.

Oil and gas shippers often find themselves building pipelines amid a production boom only to find there is too much capacity when downturns occur. Numerous pipelines were built in the Permian in Texas and New Mexico - the largest U.S. oilfield - to export locales while production surged between 2017 and 2020.

© Reuters/Nick Oxford FILE PHOTO: A sign built out of a pipeline that reads "pipeline crossroads of the world" welcomes visitors to town in Cushing   IT IS CROSSROADS OF NORTH AMERICAN OIL PRODUCTION

Some pipeline operators in areas like the Permian Basin have responded by cutting pre-pandemic shipping rates, as the U.S. oil industry has been slow to recover from the coronavirus outbreak.

Generally, basins that are overbuilt, like the Permian, have lower uncommitted shipping rates than before the pandemic, but basins with less pipeline capacity have managed to raise rates, because there are fewer shipping options, said Ryan Saxton, head of oil data at Wood Mackenzie.

During the pandemic, companies began offering discounted rates to committed shippers as an incentive, said Jesse Mercer, senior director of oil markets at Enverus. As production continues to return, companies are likely to wind down those offers, he said.

The best-performing pipeline in the Permian right now at around 94% utilization, is Phillips 66's Gray Oak Pipeline, Saxton said.

The uncommitted tariff rate to ship on Gray Oak is about $2.97 per barrel, he said, compared with the more than $4.00-per-barrel on the BridgeTex, another Permian pipeline.

In its third quarter earnings, Phillips 66 noted its midstream transportation pre-tax income rose $30 million from the second quarter, in part due to Gray Oak, one of the largest pipelines in the basin with a capacity of 900,000 bpd.

BridgeTex, a joint venture from Magellan Midstream Partners LP, is at around 70% utilization, Saxton said. The 440,000-bpd line delivers crude to Magellan's terminal in East Houston.

BridgeTex volumes in the third quarter 2021 fell to just over 315,000 bpd, about 5% below volumes in 2020 due to a decrease in uncommitted shipments in the quarter and unfavorable pricing differentials, Magellan said in its most recent earnings call. The company's crude transportation and terminals revenue decreased $38 million in the third quarter.

"The utilization of a pipeline directly impacts the performance of those midstream operators," Saxton said.

However, earnings are starting to recover from lower utilization, said Colton Bean, director of infrastructure research at Tudor, Pickering, Holt & Co.

North Dakota's Bakken production is lagging pre-pandemic levels, and Energy Transfer LP's Dakota Access Pipeline, which can carry about 570,000 bpd out of the region, is at about 77% of utilization, compared with nearly full utilization before the pandemic, Saxton said.

However, Dakota Access' uncommitted tariff rate is $6.64 per barrel, above the around $6.28 per barrel before the pandemic, Saxton said. There are fewer pipes out of the Bakken than in the Permian. Energy Transfer declined to comment for this article.

(Reporting by Stephanie Kelly; Editing by Marguerita Choy)