B.C. port strike cost CPKC railway $80 million, exec says

Christopher Reynolds, The Canadian Press

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The B.C. port workers' strike deprived Canadian Pacific Kansas City Ltd. of scores of millions of dollars, its chief marketing officer said, tacking on a costly coda to a tough quarter.

"At this point, we're estimating the strike had a negative impact of about $80 million in revenue, much of which we will work hard to claw back over the remainder of Q3 and Q4," John Brooks told analysts on a conference call Thursday.

The 13-week strike — plus a brief wildcat job action — earlier this month halted operations at most ports along the West Coast. In the first week alone, it depressed the number of containers hauled by Canadian railways to barely half the level reached during the same period in 2022, according to the American Railroad Association.

CPKC framed its first quarter following a major merger as a tough one, as demand for container shipments and some bulk goods fell across the rail sector.

“No doubt a challenging quarter as we dealt with a softer demand environment,” CEO Keith Creel said on the conference call.

In April, Canadian Pacific Railway Ltd.'s purchase of Kansas City Southern was completed. The US$31-billion deal — the continent's first big rail merger in more than two decades — created the only railway stretching from Canada through to the U.S. and Mexico.

In the quarter ended June 30, CPKC saw revenue nudge up two per cent compared with the two formerly separate railways' combined results from a year earlier, Brooks​​​ said. Overall volume fell five per cent.

He said revenues from container traffic dropped 10 per cent in the second quarter versus the combined figures from a year earlier, as consumers rerouted their spending toward services over products in a reversal of pandemic trends.

In better years, the corrugated steel boxes, which haul everything from kitchenware to construction materials, accounted for about a quarter of Canadian Pacific Railway's total revenues, rather than one-fifth as they did in CPKC's second quarter this year.

Grain volumes also fell five per cent year over year, while potash shipments and revenue plummeted 18 per cent — despite heightened global demand — due to a "major mechanical failure" in April at the Canpotex bulk terminal in Portland, Ore., Brooks said. The operation is not expected to come back online until 2024, as CPKC works to divert fertilizer to other ports.

“This is a long game, it’s not about the first quarter (following the merger)," Creel said, though he also acknowledged the snarls caused by the strike. “This is not to say that everything’s been perfect."

On the plus side, the railway hauled higher volumes of "frac sand" and steel as well as automotive products amid ongoing demand for parts and finished vehicles.

The benefits of a single-line service across the continent will also become more apparent as CPKC moves lumber from British Columbia to legacy markets of Kansas City Southern, Brooks said, "although we are seeing the impacts of a softer economy on residential construction and related building products."

Creel said long-term growth opportunities are "undeniable" given the greater reach of the merged outfit.

Employing roughly 20,000 people, the freshly fused rail network stretches from Vancouver and Saint John, N.B., to Houston and Mexico City, reaching the Gulf of Mexico and the Pacific Ocean.

Consistent with the trend of labour hoarding, CPKC is "carrying surplus headcount and incurring additional expense" at the moment, said chief financial officer Nadeem Velani. "However, as the growth comes on in the second half and into 2024, we will be prepared to handle it with strong ... margins," he said.

On Thursday, CPKC reported total revenues of $3.17 billion in its second quarter, compared with $2.20 billion a year earlier at CP — well before the marriage of North America's two smallest Class 1 railways in April.

Net income reached $1.33 billion versus $765 million the year before, the railway operator said.

The Calgary-based company said diluted earnings notched $1.42 per share, above the 82 cents per share of the same period in 2022.

This report by The Canadian Press was first published July 27, 2023.

 

CPKC chief exec cites 'challenging' three months following railway merger

The Canadian Press

Canadian Pacific Kansas City Ltd. framed its first quarter following a major merger as a tough one, as demand for container shipments and some bulk goods fell across the rail sector.

“No doubt it's a challenging quarter as we dealt with a softer demand environment,” said CEO Keith Creel on a conference call with analysts Thursday.

The company reported that revenues from container traffic, which moves everything from kitchenware to construction materials, fell 10 per cent in the quarter ended June 30 compared with the two railways' combined results from a year earlier as consumers spent more cash on services rather than products.

In better years, the corrugated steel containers have accounted for about a quarter of Canadian Pacific Railway's total revenues, rather than one-fifth as they did in its second quarter this year. 

Grain volumes also fell five per cent year over year while potash shipments plummeted.

“This is a long game, it’s not about the first quarter (following the merger)," Creel said, though he acknowledged the snarls caused by the B.C. port workers' strike earlier this month. “This is not to say that everything’s been perfect."

On the plus side, the railway hauled higher volumes of "frac sand" and steel as well as automotive products.

Creel said long-term growth opportunities are "undeniable" given the greater reach of the merged outfit.

CP's US$31-billion purchase of Kansas City Southern — the continent's first big railway merger in more than two decades — created the only railway stretching from Canada through to the U.S. and Mexico.

On Thursday, CPKC reported total revenues of $3.17 billion in its second quarter, compared with $2.20 billion a year earlier at CP — well before the marriage of North America's two smallest Class 1 railways in April.

Net income reached $1.33 billion versus $765 million the year before, the railway operator said.

The Calgary-based company said diluted earnings notched $1.42 per share, above the 82 cents per share of the same period in 2022.

Let's make a deal, Canada urges U.S. amid latest 'baseless' softwood lumber duties

The Canadian Press

Canada is urging the United States to make a good-faith effort at negotiating an end to the interminable bilateral dispute over softwood lumber. 

International Trade Minister Mary Ng is making the overture after a fresh U.S. Commerce Department review maintained duties on softwood imports from Canada.

Ng says the duties, while modestly lower, remain an unfair, baseless and punitive measure that hurts the economy on both sides of the border. 

She says a negotiated settlement is the only way the two countries will ever fully resolve the decades-old dispute. 

Such a deal is unlikely: the U.S. has a fundamental problem with a regulatory regime in Canada that it says puts American producers at a disadvantage.

U.S. Trade Representative Katherine Tai has said the U.S. would be willing to negotiate, but only if Canada does away with its provincial stumpage fee system. 

"An immediate negotiated solution to this long-standing trade issue is in the best interests of both our countries," Ng said in a statement.

"Canada is disappointed that the United States is not meaningfully engaging in discussions on a return to predictable cross-border trade in softwood lumber." 

The Commerce Department established a combined "all others" duty rate of 7.99 per cent, only slightly less than the 8.59 per cent established after the last administrative review. 

Ottawa, meanwhile, will keep up the fight through the dispute resolution tools in the U.S.-Mexico-Canada Agreement, the World Trade Organization and the courts in the U.S., Ng said. 

"The only fair outcome would be for the United States to cease applying these baseless duties." 

In Canada, lumber-producing provinces set so-called stumpage fees for timber harvested from Crown land — a system that U.S. producers, forced to pay market rates, say amounts to an unfair subsidy.

Federal officials in Ottawa have said Canada would never agree to implement such a fundamental change to the way a key Crown resource is managed before the two sides have even sat down.

This report by The Canadian Press was first published July 27, 2023.

Canfor Corp. reports $43.9M loss in second

quarter amid tough pulp, lumber conditions

The Canadian Press

Wildfires in Western Canada continue to disrupt Canfor Corp. operations as the company reported a loss of $43.9 million in the second quarter.

With new records set in both Alberta and B.C. for total hectares burned, the company said operational constraints are expected to continue well into the third quarter of 2023. The extreme conditions are also disrupting the company's access to fibre as well as harvest and hauling activities, Canfor said.

"While it is too early to determine the long-term fibre supply impacts, we have seen significant short-term disruptions to our operations, including a three-week curtailment of our facility in Fox Creek, Alberta in the second quarter," said Canfor president and CEO Donald Kayne on a call with analysts. 

The company said it will assess the full extent of the fires' impact on its operations, including sustainable timber supplies and future harvesting plans, over the coming months. 

The loss in the second quarter was down from the $373.8 million profit Canfor reported during the second quarter last year. However, it was an improvement from the first quarter, when Canfor reported a loss of $142 million. 

Declining global pulp market conditions weighed heavily on its results in the second quarter, the company said in a press release Thursday, as did pressure on global lumber market fundamentals and pricing. 

European and U.S. South operations were strong, helping partially offset weaker results from the company's western Canadian lumber business, Kayne said in the release. 

Sales during the second quarter were $1.45 billion, down from $2.17 billion a year earlier. 

The recent strike at B.C. ports will likely weigh on Canfor's results in the third quarter, said RBC analyst Paul Quinn in a note. 

The strike "severely impacted" the supply chain for subsidiary Canfor Pulp Products Inc., said the company's president and CEO Kevin Edgson on the analyst call. Around 70 per cent of the company's pulp is shipped through the affected ports, and so the strike led to a weeklong curtailment at the Northwood pulp mill. 

"We anticipate the supply chain challenges to persist through much of the third quarter," said Edgson. 

Canfor Pulp reported a net loss of $28.4 million in the second quarter, down from a loss of $5.7 million a year earlier. Sales were $249.5 million, down from $288.9 million last year. 

Overall, Canfor Corp.'s second-quarter earnings were better than expected, said Quinn, noting that the company expects lumber markets to benefit from a slight improvement in residential construction activity in the third quarter. 

High interest rates are expected to keep existing home inventories at low levels of supply, Canfor said in its release. 

"It is anticipated that new homebuilders will continue to offer concessions, however, in an attempt to potentially relieve some affordability pressures for prospective homeowners. As a result, residential construction activity is projected to experience a slight improvement through the third quarter of 2023 as the underlying demand for housing in North America remains."

This report by The Canadian Press was first published July 28, 2023.

TC Energy maintaining targeted schedule, latest cost estimate for Coastal GasLink

Amanda Stephenson, The Canadian Press

TC Energy Corp. remains on track to complete the Coastal GasLink pipeline by the end of this year without another escalation in construction costs, the Calgary-based company said Friday.

The update is welcome one for TC Energy, which has been under significant scrutiny from investors and credit rating agencies for its heavy debt load as well as for the spiralling costs of the Coastal Gas Link project, a 670-km pipeline spanning northern B.C. that will carry natural gas to the LNG Canada facility in Kitimat.

The company was recently downgraded by both DBRS Morningstar and Moody's Corp., in part due to the ballooning costs of the project, which has been dogged by unexpected construction issues and rising labour costs. 

Over the course of the project, the pipeline's construction has also attracted opposition and protests from environmentalists and Indigenous leaders. While many Indigenous groups along the project's pathway support the pipeline, the hereditary Wet'suwet'en chiefs, whose territory the pipeline crosses, do not.

In February, TC Energy raised the estimated project price tag to $14.5 billion, up significantly from a previous estimate of $11.2 billion and more than double the initial cost estimate of $6.2 billion.

At the time, the company said it was still hoping to complete the pipeline by the end of 2023, but warned that if it takes longer and construction extends well into 2024, it could add an additional $1.2 billion to the project's costs.

In the spring, the B.C. government issued a handful of stop-work orders on portions of the project due to sediment control and erosion problems.

But on Friday, TC Energy executive vice-president Bevin Wirzba said Coastal GasLink is managing the challenges and the project is more than 90 per cent finished. He said the company is maintaining its previously announced completion target and most recent cost estimate.

“We’ve had our share of really complex and risky parts of the project to accomplish, and I’m really proud that the team has delivered upon all of them," Wirzba said, on a conference call with analysts to discuss the company's second-quarter earnings.

"The remaining scope is not without execution risk, but we’ve been able to navigate these challenges week by week . . . We have all the plans in place to deliver and finish strong in the year-end."

Completing Coastal GasLink on time is a crucial piece in what is TC Energy's overall strategic plan to reduce its debtload and free up opportunities for growth.

On Thursday, the company announced its plans to split into two separate companies by spinning off its crude oil pipelines business.

Having two separate companies — one focused on crude oil transport, and one focused on natural gas and low-carbon forms of energy — will help TC Energy attract new investors and pursue a wider range of growth opportunities, CEO François Poirier said.

On Monday, TC Energy also announced it would sell off a 40 per cent stake in its Columbia Gas Transmission and Columbia Gulf Transmission systems to New York City-based Global Infrastructure Partners for $5.2 billion.

Poirier said he hopes to achieve an additional $3 billion in divestitures between now and the end of 2024, adding the funds will be used to pay down debt and clear the way for the growth of the two newly separated companies.

TC Energy's reported a $250 million profit in the second quarter, down from $889 million a year earlier.

The company's share price was down more than 5 per cent, at $44.84, as of midday trading Friday.

This report by The Canadian Press was first published July 28, 2023.

TC Energy's split could help with debt and improve ESG: Strategist

Daniel Johnson , BNN Bloomberg

TC Energy Corp.’s move to spin off its crude oil business and separate into two companies has various benefits, according to one strategist, including helping the company achieve its debt goals. 

On Thursday, the Calgary-based energy company announced a plan to split into two publicly traded entities. TC Energy said in a release that following the transaction, it will focus on natural gas infrastructure, while the new liquids pipeline company will focus on creating value from its asset base. 

Stephen Ellis, an equity strategist at Morningstar Research Services, said in an interview with BNN Bloomberg that the move bring several benefits for the company that include lowering leverage as well as highlighting the value of its existing gas and power assets. 

“I think it helps TC Energy achieve its debt-related goals,” Ellis said. “The oil spin-off is supposed to be capitalized at five times debt to EBITA and TC Energy has a goal of reaching 4.7 times by 2024. So there’s potential for this to help lower the leverage of TC energy and help it achieve its goal there.”

Spinning off the crude oil business also makes sense from an ESG perspective, according to Ellis. 

“It also cleanly separates … the oil assets which have more challenges from an ESG perspective from the more attractive gas and power assets, which have opportunities with carbon capture and hydrogen,” he said. 

Following the announcement, Ellis said the LNG side of the businesses is the “big growth driver.” 

“Canada I think after many years and many struggles actually has some very viable growth LNG projects coming online,” he said. 

TC Energy splitting into two companies by spinning off liquids business

Amanda Stephenson, The Canadian Press

TC Energy Corp. has announced plans to split into two separate companies by spinning off its crude oil pipelines business.

The Calgary-based pipeline giant made the announcement — which it called "transformational" — after the close of markets Thursday, one day before its scheduled conference call to discuss the company's second-quarter earnings.

According to the company, the transaction will be completed on a tax-free basis, and will result in the creation of two publicly traded companies. TC Energy will look more like a utility company, with a focus on natural gas infrastructure as well as nuclear, pumped hydro energy storage and new low-carbon energy opportunities.

The new liquids pipeline business will be headquartered in Calgary with an office in Houston, Texas. It will focus on enhancing the value of the company's existing 4,900 kilometres of crude oil pipelines, including the critical Keystone pipeline system which transports oil from Alberta to refining markets in the U.S. midwest and U.S. Gulf Coast.

In an interview, TC Energy CEO François Poirier said the company's board of directors has approved the plan, which comes as the result of a two-year strategic review. 

Poirier said now, more than ever, it's apparent that all types of energy are required to meet global demand. While TC Energy has its fingers in many different pies, from natural gas delivery to crude oil transport to nuclear through its part ownership of Ontario's Bruce Power, the company felt that separating its lines of business would allow for faster growth.

"When we took a step back and looked at all the opportunity we had in all of our franchises, it was way more than we could ... pursue as one company, given our financial and human capacity," Poirier said.

“It’s simply a case of having limited resources, and we feel like we can pursue a bigger percentage of our opportunity set as two different companies.”

Creating a pure-play natural gas and low-carbon business will help TC Energy attract new investors, Poirier said, though he emphasized that doesn't mean investors are shying away from crude oil pipelines.

"The shareholders of TC Energy today really like that (oil pipeline) business," he said. 

"It's just that there's been so much growth on the gas and low-carbon side of the business.'

Under the proposed transaction, TC Energy shareholders will retain their current ownership in TC Energy’s common shares and receive a pro-rata allocation of common shares in the new liquids pipelines company. The number of common shares in the new company to be distributed to TC Energy shareholders will be determined prior to the closing of the split.

The transaction is expected to be tax-free for TC Energy's Canadian and U.S. shareholders. Because that will require favourable rulings from U.S. and Canadian tax authorities which will take some time to achieve, Poirier said, a shareholder vote on the transaction won't be held until mid-2024. 

The transaction is expected to be complete by the end of 2024.

TC Energy has been under scrutiny by analysts and credit rating services this year for its significant debt load as well as for cost overruns on the Coastal GasLink project, which is currently nearing completion in B.C.

The projected cost of that project has grown to $14.5 billion, up significantly from a previous estimate of $11.2 billion and more than double the initial cost estimate of $6.2 billion.

On Monday, TC Energy announced it would sell off a 40 per cent stake in its Columbia Gas Transmission and Columbia Gulf Transmission systems to New York City-based Global Infrastructure Partners for $5.2 billion.

Poirier said he hopes to achieve an additional $3 billion in divestitures between now and the end of 2024, adding the funds will be used to pay down debt and clear the way for the growth of the two newly separated companies.

A portion of TC Energy's of long-term debt will be transferred to the liquids pipelines company on a cost-effective basis.

"We’re unlocking tremendous value, in my view, by creating two premium energy infrastructure companies," Poirier said.

Poirier will remain president and CEO of TC Energy, while Bevin Wirzba — currently executive vice-president and group executive for the company's natural gas and liquids pipelines — will become CEO of the new liquids pipelines company.

Geese in 'good condition' after landing on contaminated lagoon: Imperial CEO

Amanda Stephenson, The Canadian Press

The latest in what has been a string of environmental incidents at Canadian oilsands sites was addressed Friday by the CEO of Imperial Oil Ltd.

On a conference call with analysts to discuss Imperial's second-quarter financial results, Brad Corson spoke briefly about the 12 Canada geese that were recently found stained with oil after landing on a lagoon at the company's Mahihkan plant northwest of Cold Lake, Alta.

The incident was made public Monday by the Alberta Energy Regulator, which said the lagoon had been contaminated by an inadvertent release of an estimated 900 litres — approximately six barrels — of crude oil.

“I’m disappointed that this has occurred. And we will be making every effort to learn and apply any preventative measures that are identified," said Corson.

He said all of the geese have been removed from the lagoon and taken to a specialist site for cleaning and rehabilitation.

"We are monitoring their status and they are currently in good condition," Corson said, adding the cleanup of the oil is almost complete and additional measures to deter wildlife from entering the area — including decoys and wildlife cannons — have been put in place.

The Canada geese incident comes on the heels of the ongoing environmental challenges Imperial has faced this year at its Kearl oilsands site.

In May 2022, workers discovered discoloured water seeping near a tailings (industrial waste) pond on the north of the mine site. That substance was later found to be groundwater contaminated by tailings.

The following February, another 5.3 million litres of wastewater escaped from a containment pond, prompting the regulator to issue an environmental protection order.

Area First Nations and governments were angered they weren't kept informed about the investigation into the first release. Three probes have been launched into that nine-month delay — one by a House of Commons committee, another by Alberta's information commissioner and the third by the Alberta Energy Regulator's board of directors.

On Friday, Corson said Imperial has completed the construction of mitigation infrastructure aimed at improving its existing seepage interception system.

"These expansions included additional drainage structures, pumping wells and vacuum systems," he said. 

"We are committed to rebuilding the trust we have lost and as you can see, we have been working very hard to correct the issue and ensure it does not happen again.”

In addition to the Imperial episodes, several other Canadian oilsands companies have reported environmental incidents lately.

In May, 32 dead waterfowl were found at two separate oilsands tailings ponds operated by Suncor Energy Inc.

Last month, Cenovus Energy Inc. was issued a clean-up order by the Alberta Energy Regulator after more than 1,000 litres of diesel spilled from a temporary generator into a northern Alberta lake.

On Friday, Imperial Oil reported it earned $675 million in its second quarter, down from $2.41 billion in the same quarter a year earlier, driven by lower refining margins and planned maintenance work.

The company said its profit amounted to $1.15 per diluted share for the quarter, down from $3.63 per diluted share a year earlier, while total revenue and other income amounted to $11.82 billion, down from $17.31 billion for the same period in 2022.

Production averaged 363,000 gross oil-equivalent barrels per day, down from 413,000 in the same quarter last year.

Meanwhile, refinery throughput averaged 388,000 barrels per day, compared with 412,000 a year ago, as refinery capacity utilization fell to 90 per cent compared with 96 per cent a year earlier.

Corson also told analysts on Friday's call that the company's Strathcona Renewable Diesel project, which will be Canada’s largest renewable diesel facility, passed a significant milestone in May with contractors starting construction work.

He said it remains on track for a 2025 startup and is expected to produce more than one billion litres of renewable diesel annually.

This report by The Canadian Press was first published July 28, 2023.

 

Shell agrees to divest some western assets to get Comp Bureau approval on Empire deal

The Canadian Press

Shell Canada

Canada's competition watchdog says Shell Canada Ltd. has agreed to divest some of its western assets to advance its $100 million deal to buy gas stations from an affiliate of grocery giant Empire Co. Ltd.

The Competition Bureau says it concluded the energy company's plan to buy 56 gas stations from Sobeys Capital Inc. would likely lessen or prevent competition in three markets in Alberta and British Columbia.

To resolve the concerns, the bureau says Shell and its affiliate Canadian Mobility Services Ltd. will divest assets in Brooks, Alta., and in Fort St. John and Mission, B.C.

The bureau say Commissioner of Competition Matthew Boswell is satisfied that the divestment agreement will address the competition issues that were likely to result from the proposed transaction.

Shell struck a deal in December to buy all of Sobeys' western Canadian gas stations, saying the agreement would help it grow its retail fuel footprint across the country.

Shell supplies fuel to about 1,383 gas stations across Canada, while Sobeys owns about 391 stations and convenience stores.

SpaceX Falcon heavy rocket lifts massive satellite into space

Loren Grush, Bloomberg News

CAPE CANAVERAL, FLORIDA - MAY 21: A SpaceX Falcon 9 rocket with the Crew Dragon spacecraft is prepared for launch from pad 39A at the Kennedy Space Center on May 21, 2023 in Cape Canaveral, Florida. Saudi Arabia's first astronaut class, Rayyanah Barnawi and Ali AlQarni, along with former NASA astronaut Peggy Whitson, and John Shoffner will be flying to the International Space Station. (Photo by Joe Raedle/Getty Images) , Photographer: Joe Raedle/Getty Images

SpaceX’s most powerful operational rocket successfully carried the world’s largest commercial communications satellite into orbit high above Earth.

Space Exploration Technologies Corp.’s three-fuselage Falcon Heavy took off with the massive payload at 11:04 p.m. local time Friday from the company’s launchpad at NASA’s Kennedy Space Center in Florida. The satellite was deployed about three and a half hours after liftoff.

Weighing more than nine metric tons and roughly the size of a bus, the Jupiter 3 satellite will provide wireless internet connectivity over North and South America. It will be operated by Hughes Network Systems, a unit of satellite communications company EchoStar Corp. 

Elon Musk’s SpaceX opted not to recover the center core of its Falcon Heavy rocket to ensure it had enough fuel to ferry the hulking cargo to its intended orbit. The vehicle’s two side boosters, however, did successfully touch down on SpaceX’s dual landing pads in Florida. The pair had also flown on two prior Falcon Heavy missions.

Friday’s takeoff is the third for SpaceX’s Falcon Heavy rocket in 2023 and the company’s 51st mission to orbit this year. Just a day prior, SpaceX launched another Falcon 9 rocket from the company’s other launchpad in Florida, with a new batch of Starlink internet satellites aboard.

Industrial board warns union bosses not to backtrack on new B.C. port deal

Chuck Chiang, The Canadian Press

The union representing about 7,400 workers in the British Columbia port dispute has been warned by the Canada Industrial Relations Board that changing its mind about a new deal during ratification would be an "unfair labour practice."

The board's order issued Sunday also says the union must hold a ratification vote on the deal no later than Friday.

The International Longshore and Warehouse Union Canada and the BC Maritime Employers Association announced a late-night breakthrough Sunday, saying in a joint statement they had reached a new negotiated agreement and would be recommending it to their members.

The joint statement says the new tentative deal was reached with the assistance of the industrial relations board.

The long-running dispute saw workers walk off the job at more than 30 port terminals and other sites for 13 days at the beginning of July, freezing the movement of billions of dollars worth of cargo in and out of some of Canada's busiest ports.

Sunday's warning to the union's leadership comes after a previous proposed contract was supported by union negotiators, then rejected by leaders before they changed course and recommended it to members, who sank it in a full vote last week.

After that deal was voted down by union members, Labour Minister Seamus O'Regan announced Saturday he was directing the industrial relations board to determine if a negotiated end to the dispute was still possible, and if not, to impose an agreement or final binding arbitration.

Pressure had been mounting for federal intervention if a deal failed to eventuate.

Parties including Alberta Premier Danielle Smith, the Business Council of Canada and the Canadian Federation of Independent Business have all urged the federal government to legislate an end to the dispute if it continued.

The industrial relations board's order, posted online, also says the union must not engage in strike activity, and the employers must not conduct a lockout, until after the ratification results are known.

It also orders both sides not to speak to the media after issuing the single joint statement.

This report by The Canadian Press was first published July 31, 2023.

ILWU Canada Votes Down Second Labor Agreement, Negotiates Third

An ILWU Canada rally during a port strike in Vancouver in early July (ILWU Canada)

PUBLISHED JUL 30, 2023 4:00 PM BY THE MARITIME EXECUTIVE

 

The rank-and-file membership of the International Longshore and Warehouse Union's Canadian branch (ILWU Canada) has voted down a government-crafted labor agreement that would have raised their wages by about 19 percent, according to the BC Maritime Employers' Association (BCMEA). ILWU Canada's negotiators and leaders had recommended a vote in favor of the deal, which was the second iteration of a "final" agreement negotiated with federal mediators.

The latest breakdown did not last long: In a rapid-fire turnaround, negotiators for ILWU Canada and the BCMEA announced another settlement agreement late Sunday, heading off disruption. The new deal now goes to union membership for another vote.

Union members' decision to vote down the previous agreement reignited calls for the Canadian government to impose a resolution. Two previous rounds of labor action brought Canada's busiest container ports to a standstill for two weeks earlier this month. 

The Greater Vancouver Board of Trade, the largest business association in western Canada, said that it was "shocked and disappointed" by the rejection of the deal. The previous port shutdowns curtailed production at pulp mills, mines, and other businesses that depend on supplies shipped through Vancouver and Prince Rupert, and the board warned of inflationary effects if the strike resumes.  

"An agreed-upon deal has now been rejected twice by the union. It is now time for the federal government and opposition parties to intervene to ensure that our ports stay open," said Bridgitte Anderson, head of the Greater Vancouver Board of Trade. "It is also clear that the federal government needs additional tools to facilitate lasting agreements when labor disruptions affect the entire economy.”

Federal Labor Minister Seamus O'Regan appeared to agree. On Saturday, O'Regan said in a statement that he has asked the Canada Industrial Relations Board (CIRB) to rule on whether it is impossible for the two sides to reach negotiated agreement. If the CIRB makes this determination, they may impose a new collective agreement or impose a binding arbitration process, whether the union approves it or not. He left open "all options and eventualities" to end the dispute, signaling openness to a legislative back-to-work order. 

The CIRB sat down with ILWU Canada and the BCMEA shortly after, and a third agreement was announced Sunday night. The deal must still pass muster with ILWU rank-and-file members. 

 

Famed Antikythera Shipwreck Yields New Treasures

Courtesy University of Geneva

PUBLISHED JUL 30, 2023 11:24 PM BY THE MARITIME EXECUTIVE

 

The ancient wreck of Antikythera has been under investigation for more than 120 years, and the work to uncover its secrets continues. An international team of archaeologists, divers, engineers and physical and natural scientists recently visited the wreck, and for this season the researchers reported progress in learning more about the site's structure, the wreck itself and its cargo of ancient luxury goods.  

The Antikythera wreck dates back to the first century BCE, and it is perhaps the most important ancient shipwreck ever found off the coast of Greece. It was discovered off the island of the same name in 1900, and over the years it has yielded up many treasures - like the bronze Antikythera Ephebe statue, a collection of luxury pottery, and one of the most famed finds of any archaeological site, the Antikythera Mechanism. This geared "computer" was designed to track the date and important recurring events, including solar and lunar eclipses. Nothing else like it appeared in the historical record for another 1,500 years. 

The goal of this year's excavation was to better understand the circumstances surrounding the sinking of the vessel. The team examined the wreck's positioning, its possible route and its cargo. All the finds were documented in a digital map system, which contains all known discoveries from the lost vessel dating back to the first excavation in 1900. 

Images courtesy University of Geneva

The work focused on the area at the eastern edge of the shipwreck site, where last year parts of large marble statues were found after the removal boulders. The team discovered the bones of at least one victim of the wreck, along with artifacts typical of the site: fragments of marble statues, pottery, glassware and copper alloy, lead and pieces of the ship's wooden structure. Among the marble fragments discovered, one likely belongs to the head from a statue of Herakles, which was found during last year's excavations. 

The team found another discovery in more recent sediment layers: fragments of ceramics from a later era, suggesting the presence of another shipwreck from early Byzantine times. 

The excavation work was led by a team from the University of Geneva (UNIGE) and the Ephorate of Antiquities of Piraeus. The work has support from the Aikaterini Laskaridis Foundation - founded by prominent Greek shipowner Panos Laskaridis - along with watchmaker Hublot and the Nereus Research Foundation.

Japanese Team Develops “Game Changer” Floating Vertical Axis Wind Turbines

Floating vertical access wind turbines

PUBLISHED JUL 28, 2023 6:02 PM BY THE MARITIME EXECUTIVE

 

A consortium of Japanese companies is working to develop a new concept in floating offshore wind turbines that they report will be easier to manufacture while also costing less to build and maintain. Known as a vertical axis wind turbine, they believe it will be the next generation technology that will also be well suited to the challenges of floating turbines and resilient to harsh weather conditions.

Conventional horizontal axis floating wind turbines have a high center of gravity which requires a large and expensive to build floating structure to maintain the stability of the turbines, especially in harsh conditions such as a typhoon. The towers stand as high as nearly 500 feet, which the Japanese group highlights increases the maintenance costs. They also point to installation challenges including specialized vessels, and costly port infrastructure for the construction. In addition, the nature of the wind farm makes it difficult to enlarge.

With the vertical axis wind turbine, they report it is possible to increase the power generation to achieve a cost reduction for the overall installation and ongoing operation and maintenance expenses. The concept uses a series of smaller paddles, a maximum height of approximately 360 feet that are closer to the surface and critically have the ability to tilt up to 20 degrees while maintaining output. It uses a rotating cylindrical floating foundation. 

The blades would be produced through a continuous pultrusion method using a molding process to form composite materials with carbon-reinforced plastics. The blades are produced in lengthwise sections with the same cross-sectional shape, eliminating the need for large manufacturing facilities. They would also be easier to transport than the traditional large wind turbine blades. 

Japan’s J-Power, Osaka University’s Graduate School of Engineering, and Albatross Technology, a company developing ocean renewable energy technologies including floating offshore wind turbines, marine current turbines, and wave energy converters, conducted the initial studies on this floating wind technology. In the next phase, shipping company Kawasaki Kisen Kaisha (“K” Line) will join the research along with Tokyo Electric Power and Chubu Electric Power. 

The five partners plan to jointly develop a small-scale (20kW) experimental floating axis wind turbine that will be installed in Japanese waters. After confirming the validity of the analysis and design method, they plan to proceed to a larger scale (megawatt class) offshore demonstration project. 

They believe this design concept will represent a “game changer” for the industry and can help to address the challenges that offshore wind faces in Japan and elsewhere. They highlight that while the Sea of Japan is similar in size to the North Sea, which has become the center of Europe’s offshore wind industry, the Seto Inland Sea has a deeper water depth. They point out that moving even a few kilometers from land in Japan, it is difficult to install wind turbines with fixed foundations.

They also highlight Japan’s exposure to harsh weather and sea conditions including typhoons. This technology they report is designed to maintain its maximum output even with a tilt which they believe means it can significantly contribute to Japan’s future energy needs.

Orsted Signs First Lease for Staging Area at NJ Offshore Wind Port

New Jersey Offshore Wind Port under construction (NJEDA)

PUBLISHED JUL 30, 2023 2:43 PM BY THE MARITIME EXECUTIVE

 

Orsted has signed the first sublet agreement for space at the New Jersey Offshore Wind Port, a newly-developed heavy lift port site for staging offshore wind turbines for installation. 

Orsted will rent 34 acres at the port site and will employ up to 200 people there over the span of its two-year, $25 million lease. The site will support Orsted's massive Ocean Wind 1 project. 

“Ørsted’s decision to marshal its Ocean Wind 1 project from the New Jersey Wind Port will create 200 jobs that would otherwise have gone to other states, and is the first of many projects that will use the Port in the years and decades ahead," said New Jersey Economic Development Authority (NJEDA) CEO Tim Sullivan in a statement. 

The agreement finalizes a long-anticipated lease deal. Orsted first submitted a non-binding offer to sublet in December 2020, and it agreed to a more formal letter of intent in April 2022. The two parties have been discussing terms for the past year and have settled on a final value for the lease. 

Ocean Wind 1 is a large offshore wind farm proposal located about 13 nautical miles off the coast of Middle Township, New Jersey, towards the state's southernmost tip. At full buildout it will have a capacity of 2.2 GW, making it the largest offshore wind farm in the United States and the largest producer of wind power (onshore or off) in New Jersey. 

The project was a joint venture between Orsted and New Jersey utility company PSEG until January, when PSEG sold its 25 percent stake and the development became solely owned by Orsted. 

The Bureau of Ocean Energy Management (BOEM) approved Ocean Wind 1's construction and operations plan earlier this month, clearing away the final permitting hurdle before putting steel in the water.  

Just after the federal approval, the state of New Jersey enacted legislation that will allow Orsted to keep tax credits that would have been passed along to ratepayers. The new law improves the project's financial footing but raising costs for the consumer, and has attracted controversy - and at least one lawsuit. 

“If we don't figure out a solution, this doesn't get done in New Jersey,” Gov. Phil Murphy told media after a signing ceremony July 6. “We know war in Europe, inflation, supply chain — these projects have gotten a lot more expensive, and we're not the only place that's dealing with that. Either we get this bill done and the industry thrives here, and the jobs that are associated with it, or it goes somewhere else.”