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Pipeline delay prompts LR layoffs

by Paul Quinn | December 14, 2011 at 4:15 a.m.

— A decision by President Barack Obama to delay the approval of a pipeline that would take oil from Canada and the northern U.S. to the Gulf of Mexico caused Welspun Corp. Ltd. to lay off about 60 workers at its Little Rock facility.

Dave Delie, president of Welspun’s Little Rock operations, said Tuesday that as soon as the U.S. State Department approves TransCanada Corp.’s proposed Keystone XL pipeline it would rehire the 60 workers and probably add more.

“If we start loading out we’d have to add some additional people,” Delie said. “We have about 500 miles of pipe sitting on the ground for Keystone XL.”

Those laid off earlier this month worked in the shipping department.

The State Department has to approve the pipeline because it crosses international borders. It would stretch from Canada’s Alberta province and extend more than 1,600 miles, ending in Houston and Port Arthur, Texas.

The Welspun plant in Little Rock is responsible for producing about 700 miles of the pipe for the project, Delie said, with another 100 miles manufactured in India and stored in Little Rock.

If the project doesn’t get the required permits, most of Welspun’s 600 jobs could be suspended for a time, he added.

“It would affect us tremendously if it is not approved,” Delie said. “All this pipe we have in the yard belongs to TransCanada and ... we would be competing with them” to sell pipe.

In November, the Obama administration said it would delay a decision on the pipe- line until 2013 while Trans-Canada and Nebraska consider a new route for the pipeline to travel through that state. Once a new route is mapped out, an environmental impact study would have to done.

“Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood,” Obama said in a prepared statement in November.

Obama also promised Tuesday to veto a Republican House bill, which passed by a 234-193 vote Tuesday evening, that would renew a payroll tax cut for 160 million workers, citing concerns over who would pay for the tax cut. But, a provision that would expedite the Keystone XL review was also part of the reasoning for the veto.

Republican Congressman Tim Griffin of Little Rock said Obama needs to stop playing politics with the Keystone XL project and get it approved quicker.

“Welspun is laying off workers in Arkansas because the President refuses to decide on the future of the Keystone XL Pipeline until after the next election,” Griffin said Tuesday in a news release. “Arkansas workers cannot wait another year for the President to make a decision. That is why the House will vote today on a bill that will require him to make a decision on the pipeline within 60 days of enactment.”

Some Republican congressmen used the social media site Twitter to encourage the White House to speed up the process. Those who “tweeted” included House Speaker John Boehner of Ohio, Pete Sessions of Texas, Ben Quayle of Arizona and James Lankford of Oklahoma.

TransCanada says the project would create 13,000 temporary construction jobs and 7,000 manufacturing jobs in the U.S. and Canada. However, the State Department predicts the project would directly create only 5,000 U.S. jobs.

Environmental groups such as the National Resources Defense Council and the Sierra Club oppose the project because the pipeline would carry tar sand, which they say is far dirtier than other types of oil. About 10 percent of the oil carried on Keystone XL will also come from the Bakken Shale formation in North Dakota, South Dakota and Montana.

Anthony Swift of the National Resources Defense Council said the Keystone XL shouldn’t be approved.

The clean energy economy “is one of the fastest-growing sectors in the U.S. right now,” Swift told the Arkansas Democrat-Gazette on Tuesday. “The real question is whether we want to jeopardize that growing creator of domestic jobs with massive infrastructure projects that will maintain our dependence on foreign sources of energy. In the process jeopardizing our lands and waters.”

Meanwhile, Delie said he feels bad that the employees had to lose their jobs around Christmas. An additional 150 employees were placed on temporary leave while the company waits for a shipment of steel from South Korea to start on another project. Delie said he expects the shipment in mid- to late January, about three weeks after originally expected.

Business, Pages 29 on 12/14/2011

Print Headline: Pipeline delay prompts LR layoffs

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