Oil Sands Truth: Shut Down the Tar Sands

Move over Fort Mac, a new boomtown is born

Move over Fort Mac, a new boomtown is born
On the surface Grande Prairie looks unremarkable, but its riches of oil and gas have brought roaring growth
May 21, 2007

GRANDE PRAIRIE, ALTA. -- On the surface, Grande Prairie, with a population nearing 50,000, looks unremarkable. Most buildings are a couple of storeys high, and the only striking feature of the richest neighbourhood in town - called Wedgewood - is the number of three-vehicle garages.

One standout is the regional college, whose brown brick walls were designed by architect Douglas Cardinal in his signature, curvilinear style. The 1970s project brought him his first international renown, before he went on to design the Museum of Civilization across the river from Parliament Hill in Ottawa.

Look at Grande Prairie more closely, however, and you see roaring economic opportunity everywhere. There is a building boom in houses, industrial traffic crowds the streets, and the city is often full of roughnecks who work drilling rigs. Especially in the key winter months, when remote locations can be reached with the ground frozen, hotels are full with energy personnel.

"There is no place in Canada, perhaps North America, that has seen this much growth," Alberta Premier Ed Stelmach said in the city recently as he announced $250-million in spending for a new hospital.

Grande Prairie is the unknown Fort McMurray, an Alberta energy capital that's riding a wave of booming growth - yet remains well below the radar of even most Albertans.

The city's population has risen 50 per cent in the past decade, cementing its place as the urban hub for a sprawling region of 250,000 people that includes northeastern British Columbia, the Yukon and the southern Northwest Territories.

While the Grande Prairie area is rich in forests and agriculture - its glacier silts and long hours of summer sunshine make for ideal growing conditions - oil and natural gas are what have brought the city its new boomtown status. In the nearby Foothills of the Rocky Mountains, gas exploration is everywhere, and to the north of the city, the hunt for oil has also taken off, with junior Galleon Energy Inc. discovering an oil field recently that shows potential to produce more than 10,000 barrels a day.

And then there's the "other" oil sands - deposits in the Peace River area north of Grande Prairie, where Royal Dutch Shell PLC is pursuing a 100,000-barrel-a-day project.

Wayne Ayling, Grande Prairie's two-term mayor, sees the problems, noting big pressure on the city to provide services to about 15,000 people who have arrived since 1996, when the population was about 31,000.

"The true costs of the oil and gas sector's business are not being paid for out of their current revenues, the revenues to governments," Mr. Ayling said, adding energy companies generally are good corporate citizens locally, helping sponsor the usual variety of activities.

Fort McMurray has seen similar, though more extreme growth than Grande Prairie, with the regional population doubling to about 80,000 since 1999. Earlier this year, the provincial government announced $400-million in emergency funding to address problems such as an overstressed, strained health care system in Fort McMoney - the nickname of the oil sands capital.

Like Fort McMurray, Grande Prairie has the vibrancy of youth, with a median age hovering about 30 and the local hospital setting new records for births each month, most recently rising to 150. For Jackie Clayton, who owns two businesses, including a store called Bellies & Babies, business is wonderful, even if there is a constant challenge to hang on to workers.

"As much as it's hairy here, you just got to go: 'Take a step back. You can't really complain that your business is too busy,' " said Ms. Clayton, formerly chairwoman of the chamber of commerce.

"Yes, it'd be great if things were a little slower at times but ... if you have an idea, and you have strong business skills, there's no better time to be your own boss or to be in business. There's so many spinoffs from the oil industry. Whether or not you working the patch, everything is a direct result of it."

Keeping up with growth has been a challenge, locals say, the same challenge faced by Fort McMurray. One constant reminder are the bumpy streets, severely pockmarked with potholes, in part because of the cold northern climate, but largely because of the heavy trucks that roll through Grande Prairie, heading out or coming back from the prolific natural gas and oil fields that surround the city. On gravel roads in the countryside, Depression-era-style dust storms are common in summer months as trucks race across the landscape.

In late April, city council approved a $29-million library and art gallery building, but the list of demands for new infrastructure is long and the needs are widely obvious. At the Cardinal-designed regional college, a dozen or so portables sit outside to accommodate classes for students.

"Our infrastructure can't really sustain the growth, whether it's our roadways or our housing - on so many levels we can't keep up," Ms. Clayton said, adding that the city needs more dollars from the billions in royalties collected by the province. "It's frustrating, in the sense that so much money is taken out of here and you never really see an equal balance put back in."

Energy firms in the region are there because of the ample resources in the ground. Galleon Energy, the junior explorer, has focused its business on the area and has more than tripled its market capitalization to about $1-billion over the past three years.

Steve Sugianto, chief executive officer of Calgary-based Galleon, said the region's prospects in what's called the southern Peace River Arch can easily sustain the industry for at least another decade.

"You can find big reserves," Mr. Sugianto said.

Further west, in the Foothills of the Rocky Mountains, the biggest energy companies in Canada, including EnCana Corp., Canadian Natural Resources Ltd. and Talisman Energy Inc., all also of Calgary, are making significant discoveries and boast to shareholders of trillions of cubic feet of natural gas that will be extracted in the future.

North of Grande Prairie, around Peace River, the oil sands business is taking off. While the core of the oil sands sits in northeastern Alberta north of Fort McMurray, there are bitumen deposits in the northwest area of the province. Royal Dutch Shell wants to spend several billion to produce 100,000 barrels a day by drilling wells and injecting steam to recover the bitumen. It currently produces roughly 20,000 a day.

And while rapid growth has strained Grande Prairie, its citizens feel confident that city will thrive, even if the energy industry hits a slump. Grande Prairie has a long history of forestry, as well as agriculture, with the region boasting more arable hectares than the entire province of Manitoba.

"The two cities, Grande Prairie and Fort McMurray, share a spotlight on growth but the nature of the two cities is completely different," Mr. Ayling said. "[Fort McMurray] has one road in and the same road out. It's an island surrounded by natural resources. Grande Prairie grew up as a family-orientated city from the early days and maintained that. People travel here from all four points of the compass. There's a different feeling here, the city's not driven by one economic sector."

The unknown

Fort McMurray

The City of Grande Prairie, in northwestern Alberta, is a major hub for oil and natural gas exploration, yet the place is unfamiliar to most people outside of the region. The population has surged by 50 per cent in the past decade as the energy industry booms.

The energy boom

The energy boom is making people richer, with average family income surging in Grande Prairie by a third in the past decade.

1996: $62,300

2001: $69,900

2006: $83,400

Canadian 2006 average: $75,400

Other industries

Beyond oil and gas, Grande Prairie is home to other industries, such as mills owned by Canadian Forest Products Ltd. and Weyerhaeuser Canada Ltd. Ainsworth Lumber Co. Ltd. also has a plant.

Number of farms in the County of Grande Prairie around the city: 1,443

Number of farms making more than $100,000 a year: 312

The population

and building boom


1996: 31,353

2001: 36,983

2006: 47,076

Private dwellings

1996: 10,840

2001: 13,997

2006: 17,941

Sources: Statistics Canada, City of Grande Prairie, AlbertaFirst.com

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