Employment to get boost from pipeline

Construction of the $3 billion, 675-mile Ruby Pipeline, which has more than 350 miles of natural gas pipe running across three northern Nevada counties, is expected to employ more than 500 out-of work equipment operators from Operating Engineers Local No. 3 in Reno, says Steve Ingersoll, district representative.

More than 1,000 operators total are expected to work the Nevada section, which traverses Elko, Humboldt and Washoe counties. The job comes as a huge boon to northern Nevada equipment operators, many of whom have been out of work so long that their unemployment benefits and health insurance have expired, Ingersoll says.

"It's probably four months worth of steady high-dollar wages and good hours," he says. "It will be huge."

Members of the Operating Engineers Local No. 3 will clear brush for right-of-way access, dig the trench for the underground pipe, run side booms to set pipe, and backfill once the pipe is welded in place.

Ingersoll says workers from northeastern Nevada, California and Utah also will be put to work on the project.

"It's a huge boost to the operating engineers here and throughout our jurisdiction," he says. "We will be able to contact a lot of other areas that are feeling the same lack of work and offer them some employment on this project."

At peak the pipeline is expected to put approximately 4,500 workers total in the field, says Richard Wheatley, media relations manager for pipeline builder El Paso Corp. of Houston.

In addition to the pipeline, two compressor stations are proposed to be built in Nevada, one about 20 to 30 miles north of Elko, and another northwest of Winnemucca in the Desert Valley area. Compression stations are integral to keep gas moving throughout the length of the pipeline.

El Paso will use the pipeline to deliver natural gas to California customers or to supplement existing gas supplies in the Pacific Northwest. El Paso also will be able to deliver gas to new customers along the length of the Ruby route and soon will begin touting the availability of gas to potential northern Nevada customers.

The pipeline can move 1.5 billion cubic feet of natural gas per day, and El Paso has commitments for 1.1 billion cubic feet.

"We have been in discussion with small communities in northern Nevada and continue to market gas," Wheatley says. "We not only will provide gas for committed gas customers and shippers, but we also have the ability to provide for gas off-takes for potential customers that might need natural gas, such as industrial users or utility companies."

El Paso already has secured nearly a dozen 10- to 15-year contracts with customers and shippers, Wheatley says. Securing those customer commitments was the first main hurdle for El Paso to overcome, and in June 2008 the company announced it had secured enough customers to advance the project.

Another hurdle was securing an equity partner, and El Paso recently announced that Global Infrastructure Partners will provide up to $700 million in capital for a 50 percent stake in the project.

El Paso still seeks approximately $1.5 billion in outside funding, Wheatley says. Currently, the company is absorbing 100 percent of the capital funding needed for the Ruby project.

Four companies have been hired to build the pipeline:

* U.S. Pipeline, of Houston

* Associated Pipeline Contractors Inc. of

Houston

* Precision Pipeline LLC of Eau Clair,

Wisconsin

* Rockford Corp. of Hillsboro, Ore.

Precision Pipeline will perform most of the pipeline construction in Nevada, and U.S Pipeline and Rockford Corp. will build small portions of the Nevada work near the state borders.

El Paso has split construction of the pipeline into approximately seven major segments, or pipeline spreads, with each spread employing between 600 to 700 workers.

El Paso also will build a camp to house workers 10 miles east of the California border near the ghost town of Vya in northern Washoe County. Teton Buildings of Wyoming will construct the facility of modular buildings that will include spaces for trailers and RVs.

Wheatley says the camp will include a mess hall, recreation and medical facilities.

"It will be a self-contained camp," he says.

Once the pipeline is built El Paso will remediate the camp area, Wheatley adds.

El Paso still is working through permitting for the project, a process ongoing since January of 2008. The company expects to begin construction in May or June and have the pipeline delivering gas by March 2011. The pipeline will be underground except where it rises above ground at compression stations.

First-year annual tax revenues from pipeline are estimated at $45.5 million, with $2.5 million first-year sales tax for Washoe County.

Pam Borda, executive director of the Elko County Economic Diversification Authority, says construction of the pipeline and subsequent sales tax on food, lodging and fuel could make significant impact on county revenues and possibly alleviate any future budget cuts in the region.

"The economic impact easily could be into the millions and millions of dollars," Borda says.

Charlie Myers, Elko County commission chair, says that the nearly 900 to 1,000 workers that are expected to work in Elko County throughout the construction could bring as much as $18 million to the county in food, lodging, fuel and entertainment.

"We are not hurting as as bad as the rest of state, but we still are down, and any economic boost is welcomed," Myers says.

SIDEBAR

Where the pipeline will go in Nevada

The 675-mile Ruby Pipeline starts in Opal, Wyo., crosses northern Utah and enters Elko County.

After traveling across Elko County, the pipeline crosses into Humboldt County near Winnemucca. The pipeline continues on through northern Washoe County before heading in a northwesterly direction into Oregon, where it terminates at Malin.

Compressor stations (right) will be built near Elko and Winnemucca.

At Malin, pipeline builder El Paso Corp. will build a small lateral pipeline to transport gas to the existing Gas Transmission Northwest line, which runs from the British Columbia-Idaho border to the California-Oregon border. That connection allows El Paso to ship natural gas south into California for Pacific Gas and Electric customers, or north for use in Oregon and the Pacific Northwest.