Nothing in Canada offers more economic potential than the Tar Sands of Alberta. The size of the oil reserves is second only to Saudi Arabia in the entire world. But there is an immense challenge to be met in ensuring that there are benefits for all Canadians in Tar Sands work, not just for Albertans or the oil companies. Furthermore, there has to be an even-handed balance between development and preservation of the environment. The following is a listing of eight of the most serious issues facing these mega energy projects.

(1) Higher royalties: A new higher royalty regime is being proposed by the newly-elected Premier of the province, Ed Stelmach. The bigger bite for government is an irritant and rallying point for oil companies. Some are expressing outrage and threatening to cancel projects. But they had to know this was coming. The government wields power and it is going to get its share. The realists among oil industry executives are still announcing huge spending plans.

(2) Material shortages: This is a problem, but mainly in connection with point (4). Materials are available, but at a cost.

(3) Labour shortages: This problem is quite serious. There is an acute shortage of workers in some of the skilled trades required on remote job sites. Oil companies are looking for workers from other parts of Canada, other countries around the world, the aboriginal population and through hanging onto older workers.

(4) Cost overruns on account of points (2) and (3): Huge cost overruns are also resulting from the remote location in northeastern Alberta (and the need for worker camps), difficulty of access and really cold seasonal working conditions (e.g., -40 degree weather in winter, and it doesn’t matter whether this is Fahrenheit or Celsius). As just one example, outdoor electrical wiring becomes next to impossible under such conditions.

I’ll conclude tomorrow with the remaining four points.

Alex Carrick

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