CRISIS IN COLD LAKE.
‘WE KEEP BEATING OUR OIL INDUSTRY WITH A STICK, AND NOBODY WANTS TO STAND UP’
Craig Copeland, the mayor of Cold Lake, can’t understand why so many Canadian politicians are unmoved by the devastation of Alberta oil centres like his own.
Located in northeastern Alberta on the idyllic lake that inspired its name, Cold Lake is one of Alberta’s largest oilsands hubs. It sits on top of many of the sweet spots of the Athabasca deposits and is surrounded by a cluster of steamassisted gravity drainage operations by oil majors such as Imperial Oil Ltd., Cenovus Energy Inc., Husky Energy Inc., Devon Energy Corp. and Canadian Natural Resources Ltd.
Together, they produce up to 500,000 barrels a day, making it one of Canada’s top value- creating communities. You won’t find a prouder one.
Cold Lake is also a big Canadian Air Force town and the home of its fighter pilot training program, but its young population has been hard hit by the postponement of a long list of oilsands projects during the past year as companies roll back investment to cope with the oil price collapse.
Those projects were supposed to be the sector’s future because they use more advanced technology than traditional mining operations do. Instead, they fell as hard as the price of oil. Copeland estimates 1,000 out of the 5,000 people working directly in the oil industry are out of work in the 40,000-resident Lakeland area, but that doesn’t include the indirect job losses.
Businesses that provide services to oil companies — many of them owned by the area’s large aboriginal population — are hurting. Construction workers from across Canada are being sent home. Restaurants and hotels continue to empty.
According to StatsCan, the unemployment rate in Wood Buffalo/ Cold Lake, where most oilsands projects are based, shot up to nine per cent in January, from 8.6 per cent in December and 5.4 per cent a year ago. Before that, any talk about labour was about shortages.
“There is a noticeable quietness,” Copeland said. “There was a time in 2012/ 2014 when you couldn’t get a room in Cold Lake. Now parking lots are vacant and you can see the difference.”
The blows started coming with the crash in oil prices or- chestrated by Saudi Arabia in late 2014 to claw back market share from higher- cost producers in the United States and Canada.
Today, Copeland worries more about the long term. The oilsands’ growth story has lost traction due to lack of pipeline capacity and climate- change policy — and that’s a Made in Canada problem.
Without market access and the right business conditions, oil sands production could freeze at current levels, he said, and so would the exploration work, construction projects, support services, and retail, transportation and hospitality jobs that fuelled the area’s — and Canada’s — economy.
“That conversation isn’ t talked about enough,” he said. “And it’s all linked to the pipes. There has to be a market for your oil to go to.”
Pipelines to Canada’s West and East Coasts, and to the U.S. Gulf Coast, have stalled. The Alberta government is working on implementing a 100- megat onne- a- year cap on green- house- gas emissions for the oilsands industry, up from about 70 today.
Such a cap would hold back many planned projects. The federal government, meanwhile, is working on its own plan, and is reforming energy regulation to include a climate- change test on pipelines and the oil projects that feed them.
Copeland’s harshest criticism is for the environmental movement, which he said has never bothered to find out about the practices of the oil industry in his area, preferring instead to blindly organize protests when it did pay a visit.
Anybody who has been to oil facilities can see their minimal land disturbance, their preoccupation with following regulations, their fear of harming the environment, he said.
“We keep beating our oil industry with a stick, and nobody wants to stand up and say, ‘ Enough is enough. Environmentalists, pack up your bags and deal with your own neighbourhoods,’ ” said Copeland, who has a background in fish and wildlife management and runs the Cold Lake Fish Hatchery.
“We have allowed misinformation, and guys l i ke Neil Young and David Suzuki, to dictate the agenda in Alberta. We have got to get it back, and the only way is for federal and provincial politicians to say, ‘ We are building pipe. Let’s go,’”
A l ack of growth doesn’ t mean production will be shut in. Oilsands operations will continue to produce, just as they have throughout the downturn, because investments have already been made. But it also means Canada will continue to get a lot of its oil from unsavoury regimes such as Saudi Arabia and Nigeria, instead of hard- working towns like Cold Lake.
According to a l abour demand outlook report made public this week by Petroleum Labour Market Information, Canada’s oilsands sector is shifting from growth and expansion to improving the reliability and performance of current operations.
It projects demand for onsite construction workers will be 92- per- cent lower by 2018 — representing nearly 20,000 fewer jobs — compared to 2014 projections. Operations jobs are expected to increase modestly, to about 35,000 in 2018, but that is still thousands short of previous expectations.
Cold Lake grew from an influx of largely young workers from all over Canada, lured by high- paying oil jobs and great recreation facilities funded by oil companies. Many bought homes, started families and intended to stay for the long term — eight per cent of its population is four years old or younger.
Copeland notes his counterparts in Quebec and British Columbia who criticize pipelines aren’t talking about why many of their young, unable to get jobs at home, moved to his community for work. The last big project built nearby, Imperial’s Nabiye, employed 1,500 construction workers, he said. Of those, 90 per cent were tradesmen from across Canada, including big groups from Quebec and Vancouver Island.
It’s unlikely, he points out, t hat newer i ndustries such as technology will relocate to the fill the void if the oilpatch dries up. “If we let the environmentalists win, where do these young people go for work?” he asks.
THERE HAS TO BE A MARKET FOR YOUR OIL TO GO TO.