Nov 18, 2015
Oil sands slowdown forces Fort McMurray to reassess growth plans
Canada's New Energy: Oil sands slowdown forces Fort Mac to reassess growth plans
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PART THREE OF BNN'S WEEK LONG SPECIAL COVERAGE: CANADA'S NEW ENERGY
Building a boomtown requires community planners to walk the finest line imaginable.
Grow too slow and people end up sleeping in tents through -40C winters because there aren’t enough accommodations being built. Grow too fast and risk creating a ghost town full of near-empty suburbs and underused stadiums.
“Ten years ago we were putting buildings where roads needed to go because we thought we’d only grow to 60,000 people,” explains Melissa Blake, mayor of the Regional Municipality of Wood Buffalo, which includes the oil sands hub of Fort McMurray, Alberta. “So by shooting at higher targets, it forces you to better execute whatever pace of growth you’re going to experience.”
Today, the city of more than 70,000 permanent residents (it is more than 100,000 if residents of the nearby oil sands work camps are included) has the opposite problem. The crash in crude oil prices – and the subsequent stalling of tens of billions of dollars’ worth of oil sands expansion plans – has forced the northern Alberta city to once again rethink its development plans.
Just two years ago, when the oil sands were in the midst of its largest boom in recent memory, the local population was expected to peak as high as 250,000 within the next two decades. That would have made Fort McMurray larger than Saskatoon; the largest city in the neighbouring province of Saskatchewan. The new lower-for-longer oil price environment has forced yet another revision.
“We are redoing our growth projections right now actually based on those new production forecasts from oil sands companies,” notes Jeff Penney, the city’s economic development manager, while sitting in a box seat overlooking the field of Shell Place; Fort McMurray’s recently completed $133-million sports and entertainment complex.
“But there is still going to be new [oil sands] projects that are built and they are going to require people and those people are going to require facilities like this one,” Penney said, gesturing around to the many rows of stadium-style seating.
Fort Hills is among the only new oil sands mines still under construction, with several others having been delayed for at least a few years or already cancelled outright. Suncor Energy, the project operator and majority owner, recently faced scrutiny for appearing to avoid recruiting for Fort Hills in Fort McMurray; since the project had been designed as a fly-in fly-out facility where workers would be brought in directly from Edmonton, Calgary and elsewhere in Canada.
Penney is right about projects still being built and those projects still requiring people. However, whether those people really will end up requiring facilities like Shell Place or the Fort McMurray airport’s new $250-million terminal now seems far less certain.
