Post Agrium: Now what?

Workers gear up for transition, job hunt

Posted: Tuesday, October 02, 2007

Leaving a job after more than 17 years isn't easy, especially when you had no control over events that will soon have you collecting unemployment.

But that's what Bonnie Cavanaugh, an administrative assistant with Agrium USA, has to face now, along with about 139 of her colleagues who are out of a job, due to Agrium's decision to close the Nikiski fertilizer plant.

"I've never been on unemployment," Cavanaugh said. "I'll probably be on it a couple of months."

By then, she hopes to have found another job, preferably in the Kenai area because her husband works for Chevron.

"It's very emotional," she said. "There have been a lot of tears. I will miss a lot of people. It's been like a big family for a lot of years."

Last week, Agrium headquarters in Canada announced it would shut down the Nikiski ammonia and urea plants after failing to secure favorable contracts for a continuing supply of natural gas.

The decision does not affect an ongoing feasibility study of a proposed coal gasification plant, called the Blue Sky Project, which could reopen the fertilizer production facility by 2012 by turning coal into gas feedstock. A decision on moving on to the next phase of the feasibility study is still months away, the company said.

But a possibility still five or more years away isn't going to solve the problems faced by employees who will be getting their walking papers over the next several weeks.

Philip Squires is an ammonia plant operator who has worked for the company seven years and who worked as a private contractor for Agrium on and off before that. An operator's skills are not directly transferable to other jobs, he said.

"It is a long-term commitment to learn how to run an ammonia plant," he said. "It's not casual labor."

Fortunately, he's been a commercial fisherman for 25 years, relying on that industry to supplement his income. He retains a boat and permits for salmon and halibut.

"This is not an absolutely, go-broke disaster," he said, "but it's a pretty good stumble."

But he and about 50 other operators will be looking for jobs in other industries, most likely on the North Slope, where jobs don't often open up.

"It will take quite a while for the Slope to absorb that many workers in that job classification," Squires said.

The company is a making an effort to find workers jobs in other Agrium plants, and some are ready to go, he said.

He said it would help that he is not married and has no children. That would make leaving easier. Still, at this point he has no definite plans and is thinking about taking some classes at Kenai Peninsula College while hunting for another job.

Agrium USA spokeswoman Lisa Parker declined to answer questions about her own future at this time.

"My focus is on the next couple of months and working on the plant closure, dealing with issues we need to deal with at this time," she said.

Agrium USA has struggled over the past several years to acquire the gas needed to continue fertilizer production. Short gas supplies have led to winter production shutdowns when demand for gas in the residential market must be the priority and also have required operating at less than full capacity during the summer months.

Agrium officials called last week's decision a difficult one and "a sad day" for the company.

Prior to Agrium's announcement, state Department of Labor and Workforce Development representatives were in Nikiski assisting workers with information and referrals.

Last Wednesday, Gov. Sarah Palin announced the agency's Rapid Response Team would arrive in Nikiski the following day to work with Agrium's Human Resource Department to begin assisting workers and their families with the transition.

"It's unfortunate to see the closure of a facility that has provided so many jobs that support families on the peninsula," Palin said in a press release.

Shawna Harper, a program coordinator with the DOL's employment security division, said the Rapid Response Team is a federal program. Since Agrium first announced two years ago it might have to close the plant for lack of natural gas supply, DOL has been working with the company providing employees with information about unemployment insurance, employment services, resume workshops and interview skills, she said.

Agrium USA was covered for two years by another program meant to offer help for workers whose jobs were affected by imports or whose jobs were moved overseas. Though certification for that program ended in April, the company has re-applied and is likely to be re-certified, Harper said.

The sheer number of workers affected by the closure has led DOL to open a transition center specifically for these workers.

"It is like a mini-jobs center for them to use," she said.

Beyond the immediate impact, the plant shutdown will affect the property tax revenue stream to the borough.

Currently, the operating plant is worth about $49 million. It is subject to borough and service area taxes totaling 12 mills, bringing in about $588,000.

Shane Horan, borough assessor, said his "gut guestimate" would put a mothballed plant's value at about $20 million, though determining exactly how much will require a physical inspection and a meeting with Agrium officials. That would bring in roughly $240,000, a significant cut in revenue.

The immediate loss of more than $16 million in annual salaries also is sure to have an effect, borough officials have said.

As for the future of Agrium in Alaska, Squires said he believes company officials want the Blue Sky coal gasification project to proceed and eventually begin producing fertilizer in Nikiski again. But a lot will hinge on permits and business partnerships, which is where he thinks the uncertainty lies.

"It's a big project an awful lot of money and an awful lot of people," he said.

Hal Spence can be reached at

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