Edmonton Journal

April 30, 1982: Al­sands col­lapse could sig­nal end of megapro­jects: Lougheed

- To read more sto­ries from the se­ries This Day in Jour­nal His­tory, go to ed­mon­ton­jour­nal.com/ his­tory.

De­spite of­fers of aid from both the fed­eral and provin­cial gov­ern­ments, the much-an­tic­i­pated $13.5-bil­lion Al­sands oil­sands pro­ject col­lapsed, the vic­tim of an un­favourable eco­nomic and in­dus­trial cli­mate that in­cluded a drop in oil prices.

The con­sor­tium be­hind the north­ern Al­berta con­cept deemed it un­work­able.

Pre­mier Peter Lougheed said the Al­sands col­lapse — and the fur­ther delays in a trou­bled Alaska nat­u­ral gas pipe­line — could well her­ald the end of the megapro­ject era for the prov­ince.

“Per­haps it’s the era of small is beau­ti­ful,” Lougheed said.

On Feb. 1, Amoco Canada and Chevron Stan­dard Ltd. an­nounced their withdrawal, fol­lowed 23 days later by Dome Pe­tro­leum Ltd. and Hud­son Bay Oil and Gas Ltd. The fol­low­ing day, Shell Ex­plorer with­drew.

The five com­pa­nies rep­re­sented a 50-per-cent stake in the pro­ject, leav­ing only Gulf Canada Ltd. and the fed­er­ally owned Petro-Canada still part of the con­sor­tium.

As a re­sult, the pre­mier said the prov­ince would have to re­assess oil­sands ac­tiv­ity in terms of sur­face min­ing, in situ ac­tiv­ity and heavy oil up­grad­ing.

In the book De­vel­op­ing Al­berta’s Oil Sands: From Karl Clark to Ky­oto, Lougheed was later quoted as re­flect­ing: “The day Al­sands died was a tough day. In fact, one friend of mine said the last day of April 1982 was one of the worst days po­lit­i­cally in a rather dis­mal time be­cause we’d gone through the down­turn of the 1981-82 win­ter; we’d had a sep­a­ratist cho­sen in a by­elec­tion in Fe­bru­ary — then came the crusher, Al­sands col­lapsed.”

Ed Czaja, pres­i­dent of Al­sands En­ergy Ltd., said it would be “very dif­fi­cult for (megapro­jects) to move ahead” un­less both con­fi­dence and cash flow for the in­dus­try were re­stored.

Al­sands was among the largest com­mer­cial plants yet pro­posed in Canada, and would have cre­ated up to 30,000 jobs across the coun­try and a di­rect and in­di­rect eco­nomic spinoff of about $20 bil­lion over the seven-year con­struc­tion pe­riod, af­ter which it was pro­jected to pro­duce 137,000 bar­rels of oil a day.

Czaja an­nounced the con­sor­tium’s de­ci­sion to wind down the pro­ject ef­fec­tive July 31 de­spite a new of­fer ear­lier that week by the fed­eral and Al­berta gov­ern­ments to pur­chase half the eq­uity in the oil­sands plants and pro­vide loan guar­an­tee for 68 per cent of the pri­vate fi­nanc­ing.

 ?? SHELL CANADA RE­SOURCES LTD./ SUP­PLIED ?? A pro­to­type dragline digs a test-pit at the Al­sands pro­ject.
SHELL CANADA RE­SOURCES LTD./ SUP­PLIED A pro­to­type dragline digs a test-pit at the Al­sands pro­ject.

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