Why Edmonton and Fort McMurray must sell themselves as a regional concern.
By Scott Messenger | October 1, 2013
Juan spent his life cut off from the world as a bus driver in western Cuba, but he knew where Edmonton was. At first, the reason was mysterious. Maybe he learned from other tourists, but set among palm-studded hills and tobacco fields four hours from the resorts of Varadero, the town of Viales wouldn’t see many Canadians.
Somehow, Juan had a map of Canada, and he unfolded it to show me my city. Then I understood: The resource was why he knew. His finger trailed northeast to Fort McMurray. “Hay mucho petrleo,” he said in a tone of awe and envy. “So much oil.”
To Juan, Edmonton seemed a Shangri-La of prosperity and independence. The oil sands impressed the 57-year-old in a way Alberta wishes it would the rest of the world, Canada included, especially if the dream of a national pipeline is to be realized.
This wasn’t Edmonton’s problem when oil hit nearly $150 a barrel in 2008, but today the bitumen bubble is both a killjoy and a motivator. There never was a plan to manage the oil sands boom, the late Ralph Klein admitted in 2006, so we’ve been in reactionary mode. Finally, however, there’s a will and a way – and a dire need, if we’re to maintain our prosperity and sense of independence – for the capital and oil sands regions to jointly address touchy subjects, namely roller-coaster markets and environmental impact.
Reconsidering geography is step one, suggests Edmonton Economic Development Corporation President and CEO Brad Ferguson. “We have regional challenges and a regional reputation. We need to realize that we’re all part of one region and interdependent upon each other.” Highway 63 is a tie that binds, however dangerous and narrow it may be.
Some Edmontonians already know this oneness; for weeks on end they earn their livings in the oil sands before returning to rejuvenate with their families. On the flipside, Fort McMurray parents send kids here for diplomas and degrees. Industry sends bitumen to the Alberta Industrial Heartland, the processing hub on the northeast edge of Edmonton that employs 17,500 capital region workers and pumps $1 billion annually into the local economy. With the to-and-fro of people, oil and money, it’s hard to tell where one place ends and the other begins.
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Top 40 Under 40 alumnus Sean Rayner doesn’t try. Instead, he takes greater Edmonton, Fort McMurray and the oil sands together as “our backyard.”
That’s a mixed blessing. As owner and president of Vets Sheet Metal, Rayner has seen the good and bad of a resource-based economy. Work for the oil sands, there or on equipment passing through Edmonton from northern Alberta, has expanded his family business into a $15-million concern employing 65 people. But the market uncertainty that can shutter the sands forces him to hedge bets by hustling for local commercial work – if it’s available. “This past year it’s back to an uncomfortable dependence on oil sands,” he says.
One reason for this is the industry’s own uncomfortable dependence. Its biggest customer is the U.S., poised to wean itself off its two-million-barrel-a-day fix from us thanks to the advent of enough shale oil to re-establish it as the world’s biggest petroleum producer. That’s why “our efforts now must go into ensuring our resource is safer, cleaner and more marketable every year,” says Ferguson. We need new customers, and Edmonton has to be part of the sales pitch, rather than point fingers at the industry for its “dirty” oil image. “McMurray’s brand is part of our brand,” says Ferguson.
Edmonton has an advantage that could boost that brand, and, by improving the reputation that might win global clients, improve the long-term outlooks of companies like Vets. That is, we have inventors who see a buck to be made in sustainability.
Wade Bozak is one. In a shop just west of the city, the RJ Oilsands vice-president has developed a machine that uses physics rather than energy and chemicals to separate oil and other hydrocarbons from wastewater to make it reusable for extraction, decreasing the need for freshwater sources.
“It makes good business sense to make your plant more efficient,” he says. “For [small] companies that are focusing on that, there’s opportunity.”
If they can get at it. Judging from his experience, “It’s probably difficult for small companies to get noticed by the large oil companies,” says Bozak. His work – now being field tested – has taken eight years and untold millions of dollars. His network of industry and government contacts and post-secondary researchers that helped validate his concepts owes to his own persistence, and points to a commercialization gap.
Big oil does sustainability R&D, but it still needs a supply chain that can be fed by smaller companies like RJ Oilsands. Those companies need to be identified, supported and connected to the majors.
This won’t happen without a united front to command the attention of the provincial, if not federal, government, and gather the resources that might, for example, create an incubator dedicated entirely to companies developing reclamation processes and technologies. Delegates, including councillor Ed Gibbons, have recently travelled to Fort McMurray on fact-finding missions, but this July, doors opened to a deeper relationship. An agreement with the province now grants crown land to the growth of Fort McMurray, potentially easing the housing and infrastructure strain, and allowing the municipality to focus on future paths to sustainability.
“New conversations can begin,” says Michael Evans, Wood Buffalo‘s executive director of government relations. “There is a chance now for new, mutually beneficial partnerships to emerge, collaborative efforts that will share prosperity across the province. What those partnerships might be, we don’t know yet. We haven’t had time to explore them. Now we can,” says Evans.
Better late than never. “The first step of an addict is admission he might have a problem,” says Ferguson. It’s an uncomfortable but not inappropriate metaphor, because it calls for an intervention, with both regions taking responsibility for the social, economic and environmental costs of the oil sands they’ve become so reliant upon. “I don’t want to be a banana republic,” he says. “I want this region to be an incredibly vibrant place that the rest of the world looks at and says, ‘Wow. They did it right.'”
Rayner wants the same, and believes it could happen. “There’s power in the minds of the many and I think we could come up with some visionary ideas.” What he needs is the world to buy that vision as much as Juan did, in his little town in Cuba, and see Edmonton they both do: As an opportunity.
“Where else could a 22-year-old kid take over a 90-year-old business that was chugging along but small and, within 10 years, be broaching 10 times the value? It’s amazing, and that’s driven by the bubble that this economy is. We need to make it last as long as we can.”