News Report: Colonial Pipeline Plans Layoffs

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--The Colonial Pipeline Company (Alpharetta, Georgia) joined the growing list of energy companies shedding jobs, months after Brookfield Infrastructure Partners (Toronto, Ontario) took it over.

"We shared with our employees this week that a recent review to ensure our organization is best aligned to continue safely meeting our business strategy and priorities will result in changes to various team structures and some individual roles," the company said in response to questions from Reuters on job cuts.

Colonial Pipeline did not say how many jobs would be cut.

The news came as third-quarter earnings season gets underway. Already, Canada-based Imperial Oil, in which U.S. supermajor Exxon Mobil Corporation (Spring, Texas) has a majority stake, said earlier this month that it would shed about 20% of its workforce by 2027 as part of a broad-based restructuring process.

Exxon itself is shedding about 4% of its global workforce, or around 2,000 people. Earlier this year, Chevron relocated from California to Texas after cutting 20% of its staff and moving some 6,000 jobs to India, where labor costs are lower.

Successive quarterly surveys of energy sector sentiment from the Federal Reserve Bank of Dallas, meanwhile, found pessimism has increased since the second, non-consecutive term for U.S. President Donald Trump began in January.

"The administration is pushing for $40 per barrel crude oil, and with tariffs on foreign tubular goods, [input] prices are up, and drilling is going to disappear," a respondent said in the latest survey, published last month. "The oil industry is once again going to lose valuable employees."

The University of Michigan in a preliminary gauge of consumer sentiment, published Friday, found around 60% of the respondents were concerned about losing their job in the next year.

Meanwhile, West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, was trading at around $61 per barrel on Friday, close to the point at which many energy companies working in the United States can break even. By next year, WTI could average in the $50s, potentially limiting profitability.

That comes amid a report from the The Washington Post that the Trump administration is offering "white-glove service" to fossil fuel companies looking for fast-track approval of their respective projects. The administration, meanwhile, is actively working to thwart the development of renewable energy programs.

The layoffs at Colonial follow the recent $9 billion takeover of the Colonial Pipeline Company by investment firm Brookfield Infrastructure Partners, becoming the first individual owner since construction began in the 1960s.

"The changes do not affect our commitment to providing safe, reliable, and responsible fuel transportation services for more than 50 million Americans daily," Brookfield told Reuters.

The pipeline company was controlled before that by Shell plc (London, England), investment firm KKR (New York, New York), Koch Industries (Wichita, Kansas) and Canadian pension fund Caisse de dépôt et placement du Québec.

The 5,500-mile Colonial Pipeline originates in Texas and crosses nearly every state along the Gulf Coast and the East Coast, up into New Jersey. It carries more than 2.5 million barrels per day of refined products.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipeline Search Database can click here for a detailed list of all major assets within the Colonial Pipeline System.

In 2021, the ransomware group DarkSide targeted the pipeline network, prompting the operator to pay a $4.4 million ransom.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).