Fort McMurray looks to its future,
Municipal leaders are working to provide normal urban services
The matron of northern Alberta’s oil sands country — Fort McMurray — envisions a future beyond energy for a community built on bitumen.
Melissa Blake, the mayor of Wood Buffalo, the regional municipality made up of Fort McMurray and nine rural communities, is well aware her town — sitting on the largest deposit outside of the Organization of the Petroleum Exporting Countries, OPEC — has become synonymous with the oil sands.
“I can acknowledge that just about any other job that’s supported in Fort McMurray is one that is here to support those who work for the [oil] industry. But I also see the opportunity of being able to offer more cultural amenities, more social amenities, more retail and commercial opportunities — really allowing people who have creative energy to be successors in their own right,” Ms. Blake said in an interview from Fort McMurray. “If we turn our backs on those opportunities, we won’t be able to welcome a different era in the future.”
Fort McMurray is bursting at the seams: Its population has doubled in the past 15 years to nearly 80,000, and the number is expected to surpass 200,000 by 2030.
Modernizing a half-century-old downtown core, bringing water and sewage treatment facilities up to urban standards, improving roads and Highway 63, the town’s main link to the oil sands, as well as investing in recreational and cultural facilities and attracting retailers are at the top of Ms. Blake’s agenda — investments worth billions.
Taxes account for 82% of the regional municipality’s $676.5-million operating budget, of which 91% comes from the rural, nonresidential tax class, mainly property assessments of oil sands operators in the area, and expanding the municipality’s revenue base will be crucial for its long-term development.
Consumer services lag behind in a town without the usual familiar chains such as Costco, Home Depot, or Future Shop. There is only one dry cleaner in the region.
“If we can have access [to] the service supply industry that gets built up here for the oil sands and redeploy it for other purposes, it gives this community a life beyond this community,” said 43-year-old Ms. Blake, who has been mayor since 2004.
Jeff Penney, Wood Buffalo’s manager of economic development, said the area’s retail sector is not developed to the “level that it should be for a community of this size.
“The cost structure is pricey for retailers, with steep investments for sparse parcels of land — an acre of commercial land costs upwards of $2-million — and high labour rates to match the high cost of living.”
Housing prices are among the highest in the country — a challenge in retaining many of the area’s contract workers, said Ms. Blake.
Mike Heck moved to the town in 1974 and remembers the gravel road of downtown’s main thoroughfare, Franklin Avenue, and tugboats on the Athabasca River from his school days, replaced today with routine congestion in city’s core and pipelines along the course.
“It’s a good pain to suffer,” Mr. Heck, Suncor Energy Inc.’s director of maintenance, planning, scheduling and integration, said in a phone interview. The infrastructure and services headaches associated with rapid growth are trade-offs in the long run, he said.
“In addition to the constraints of residential land, we’ve had a very, very short supply of commercial land for business development,” Mr. Penney said. “There’s just no space to develop business. Any new business that gets developed typically has to cannibalize land that is already being utilized for another purpose.”
The province of Alberta cancelled 32 leases with 10 oil companies in July to earmark 55,000 acres (double the size of Fort McMurray) for municipal expansion as an urban development sub region (UDSR). Oil sands development is now a no-go within this boundary. While details are to be ironed out, the regional municipality will be able to purchase the Crown provincial land on an as-needed basis over the next five to 15 years.
The province is on the hook for compensating the companies for the cancelled leases, not the municipality. To critics who question whether Fort McMurray needs all that land, local officials say that as the oil sands grow, so too must the town.
“In order for the oil sands to live up to its maximum potential, Fort McMurray has to grow in cohesion with the industry,” Mr. Penney said.
Suncor, Canada’s largest oil sands producer, opened its original plant outside Fort McMurray in 1967 and employs about 6,000 workers. Headquartered in Fort McMurray, Syncrude Canada Ltd. followed with a plant in 1978 and has 4,800 permanent employees in the region today.
The UDSR land agreement will not have a long-term impact on
What I’ve come to accept is that the [oil sands] industry
is more a blessing than it could ever be a curse
Suncor’s plan in the region, despite being one of the leaseholders that had its contract annulled, company spokesperson Kelli Stevens said.
Alberta Oilsands Inc., another affected company, is the “process of wrapping up work” in the area, interim chief executive Binh Vu said in an email.
Syncrude “appreciates the municipality’s need for a long-term supply of land to deal with the next 25 years of growth,” said Kara Flynn, vice-president of government and public affairs. Ms. Flynn, who sits on the Athabasca oil sands area transportation co-ordinating committee, said she is keen to “make sure there is access for both urban development as well as oil sands development within the region.”
Syncrude has many second- and third-generation employees, she said, beating the town’s stereotype of being a sojourn for transient workers.
The energy players have a vested interest in regional growth as Fort McMurray’s development ties directly into employee recruitment and company bottom line. The local Keyano College’s sport and wellness centre is called Syncrude — an overt sign of the company’s influence on the town. Suncor pitched in recently to help open a new service road to its site along Highway 63, notorious for deadly accidents.
Teri Hill, managing director at consulting firm Accenture’s energy practice, said the municipality is facing intense growth challenges beyond the capabilities of one stakeholder. “The [oil] industry doesn’t own all the issues. It’s a multi-stakeholder type of problem that needs to be solved.”
Ms. Blake is well aware of the energy industry’s importance to her town’s development. “Even if the economy takes a decline, the industry can’t pull the plug. They are long-term investments that will ride out whatever the cyclical commodity pricing might be.”
She admits there are Canadians who “lament” the industry, but she views it as a blessing: “What I’ve come to accept is that the [oil sands] industry is more a blessing than it could ever be a curse.
“It’s what is going to enable us to create the kind of community that will be attractive to people to stay in for the long term. It’s not just about taking all we can right now, but about creating future opportunities for the next generations that follow us.”