Krista Ross, CEO of the Fredericton Chamber of Commerce on the Alberta oilsands
In March 2015, Krista Ross, CEO of the Fredericton Chamber of Commerce attended a two-day tour of the Alberta oilsands. This also included a visit to Calgary to see the business side of the province’s oil and gas industry. The tour was hosted by the Canadian Chamber of Commerce as part of their Partnership for Resource Trade initiative.
Q: How did your previous perception of the oilsands differ from what you witnessed?
A: The first thing that strikes you visually is how little there actually is to see in a lot of areas. I expected to see very large industrial areas, and while there are some instances of that - especially the areas they are able to surface mine - I found that the visible footprint was much smaller than anticipated. In areas where steam-assisted drilling is the preferred method of extraction, one basically sees a couple of pipes sticking up out of the group. I expected to see a more traditional industrial site, but what I actually witnessed was more like a manufacturing setting - everything was very clean and entirely open to inspect.
Q: What surprised you most about the oilsands on your visit?
A: Probably the universal focus on safety and the environment. I was certainly anticipating some level of importance placed into these areas, but they were clearly top of mind to everyone involved at all times - to such a degree that it was clear to me to be entirely genuine, and not just for the benefit of the tour participants. Its really just a sign of the times, I think. It almost goes without saying that proper safety guidelines and effective environmental protection practices are just part of doing business in this country in the 21st century. No activity is without risk, but with proper prevention and emergency planning, industry is doing an increasingly better job of mitigating those risks. In fact, environmental protection has become such a focus that it is now a thriving industry in its own right.
Q: How much importance did the people you talked to put on the Energy East pipeline project?
A: The Energy East pipeline was a big topic of conversation throughout my time in Alberta. I heard a lot more about Energy East than Keystone XL or Northern Gateway, perhaps because it is seen as closer to being a reality than the others. The industry very much sees the pipeline as a necessity to get their product to more diversified markets in order to maintain and create jobs throughout the country. The Canadian Chamber of Commerce released a report last year that concluded a lack of market access for the oil and gas industry is costing the country about $50 million a day.
Q: How has lower oil prices affected enthusiasm for Energy East?
A: Not at all. Prices are expected to continue to fluctuate and the price has already come back more than 10% since January. The industry needs the pipeline at nearly any price per barrel. It will make Canada less susceptible to external forces in the future and when prices do rise, industry wants to be able to take advantage immediately. Pipelines are like the energy sector’s highways - no matter what shape the economy is in, we have to continue to invest in infrastructure.
Q: What did you learn about the oilsands’ economic impact on Canada?
A: I think most people have a sense that the oilsands specifically and the energy sector generally are very important to the national economy, but the actual numbers are just staggering. In 2013, capital and operating expenses in the oil sands were up to nearly $55 billion. New oil sands development is expected to contribute more than $3.8 trillion over the next 25 years, creating 225,000 jobs in direct employment. These developments would also result in $1.5 trillion in provincial/federal taxes and provincial royalties.
Q: What did you learn about the supply chain?
A: There are huge opportunities in a variety of specific industries, but Canadians and especially New Brunswickers need to do a better job of tapping into them. For example, in 2010 43.3% of total manufacturing supply chains into the oil sands came from Canadian operations, down slightly from 46.1% in 2009. This dip of less than 3% cost Canadian manufacturers about $634 million in sales. Even in the most conservation growth scenarios, we are looking at upwards of $177 billion in manufacturing sales in Canada.
Q: What lessons did you learn in Alberta that can be applied here in NB?
A: I was inspired by the seemingly universal commitment to sustainably developing their natural resources. And not just those directly involved in the oil and gas industry - I don’t think I spoke to a single person that didn’t support the oil sands and the prosperity it has brought the province and the country. I’d like to see more of that passion in New Brunswick, particularly given our financial situation and unemployment rate. We have a growing ICT sector that can provide support to various industries and a workforce that would love the opportunity to come home to New Brunswick. We can also do a better job of tapping into those current opportunities in Alberta - only 26 New Brunswick companies are doing work on the oil sands now, trailing only PEI. By contrast, Newfoundland and Labrador, with 200,000 fewer people than NB, have 114 companies getting work there right now.
Q: Do you have anything else to add?
A: Yes, I’d like to thank the Canadian Chamber of Commerce and their Partnership for Resource Trade initiative for the opportunity to participate in this tour. I particularly enjoyed talking to the other chamber CEOs from across the country to hear different perspectives about the energy sector. It was also interesting to note that despite those differences there was still universal agreement about the oilsands importance to the national economy. Obviously most of us are familiar with the oilsands to some degree or another, but the opportunity to visit allowed us to have a more nuanced understanding of how the economic and environmental aspects are inextricably intertwined - in short, good environmental stewardship is part of good business practices. I also enjoyed learning about how the production in the oilsands has an impact in every province across the country. I’d like to see New Brunswick companies be able to tap into more of the direct opportunities in Alberta in anticipation of the Energy East pipeline coming through Saint John.