Monday, August 6, 2012

Billings company moves into the Canadian oil sands market

It has been three years since Ed Kemmick wrote his fantastic series of pieces for the Billings Gazette on the explosion of activity in the Alberta oil sands.

At the time, he noted that there was a downturn in what had been an expected jump in activity in Billings to service that particular oil boom. Now, however, signs point to a resurgence of business here.

In a recent Gazette article, Tom Howard reports that "a Texas company involved in a high-stakes plan to provide equipment used in developing the Canadian oil sands is counting on its Billings manufacturing plant to get the work done on time and under budget." The project's international dimension adds to its exotic panache, going beyond the obvious benefits of its 200 Billings employees (with a predicted 50 more to follow shortly.)

Indicative of the kinds of long-term vision and risk involved in such a venture, in 2008 Bay Ltd. purchased a former Holland loader manufacturing facility in Billings, converting it to make large and complex "modules" that are used in extracting oil from the Canadian sands. We realize that they "didn't build that," but for the moment, lets humor the company by pretending that it did have something to do with it.

But Bay Ltd.’s Billings venture doesn’t come without risk. The company is awaiting approval from the Montana Department of Transportation to transport the big loads along Montana highways to the Canadian border. The modules are 24 feet wide, up to 25 feet tall, up to 120 feet long and weigh up to 156 metric tons.

Luhan said Bay Ltd. is working with 10 power companies to arrange moving power lines to accommodate the large loads as they head north. More than 470 power lines have to be moved. Once the loads cross the international border, it will be easy transport because the Canadian government has developed a “high and wide” corridor to accommodate large loads, Bay Ltd. officials said.

And there are further flies in the ointment: the shop is non-unionized, which has local unions upset rather than happy for the blokes who have found good jobs in this economy. We suppose we can expect the unions to use their political clout to try to make approval for the above logistical issues more difficult. But such hardball would probably run the risk of backfiring in the court of public opinion, which likes it when jobs are created.

Perhaps the most important quotation in the piece was this, however:

Rick Leuthold, director of business development for Sanderson Stewart, a Billings-based engineering company, said the manufacturing processes used by Bay Ltd. could translate into new industries that serve communities involved in energy development.

This is the operative concept -- successful businesses attract and inspire more of the same. Photos in the article show Montana GOP legislators touring the facility -- one hopes that they come away with ideas for how Montana can create a healthy business climate that encourages more manufacturing concerns like this one.

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