Oil Sands Truth: Shut Down the Tar Sands

Portrait of a boomtown

Portrait of a boomtown
Oil-sands projects bring big money, big headaches to remote Alberta city
By ED KEMMICK Of The Gazette Staff [Montana]

FORT McMURRAY, Alberta - On the outskirts of this town in northern Alberta, a billboard is plastered with the logos of a dozen or more trade unions. Underneath it reads: "This is what a union town looks like. Welcome to Fort McMurray."

This is also what a boom town looks like: heavy traffic everywhere, buildings going up all over town, help-wanted signs on every other marquee. Some people have taken to calling it Fort McMoney.

Like a lot of other Canadians living here, Philip Cooper is not a native of Alberta. He moved here two years ago from Victoria, British Columbia, and is now the manager of communications for the city. And like tens of thousands of others, he migrated to get in on the boom created by the oil-sands industry.

"This is one of the best places to be in North America right now because of all the opportunity," Cooper said.
Todd Dahlman, operations manager of the Muskeg Mine north of Fort McMurray, feels the same way. The native of Butte worked in open-pit mines in Butte, Utah and Indonesia before moving to Alberta just over a year ago. The climate reminds him of Butte, as do the people he lives and works with.

"It's a wholesome breed of people," he said.

Dahlman, 44, said it was exciting to be part of such a big, evolving industry. How long does he think he'll stay in Fort McMurray?

"I have no exit strategy," he said. "I could easily be here through retirement. There's just so much going on."

John Rhind, chief of operations at the Muskeg Mine, said a mechanic in the mine's truck shop starts at about $140,000 a year and gets $40,000 in benefits. With overtime, a mechanic could easily make more than $200,000 a year.

Pricey housing
Not surprisingly, Fort McMurray is also an expensive place to live. The median price for a new house is about $800,000, which happens to be what Dahlman and his wife paid for their house in a newer part of town. Cooper said Fort McMurray has the highest per-capita incomes in Canada, but housing prices are higher than anywhere in the country except for some parts of Vancouver and Toronto.

Fort McMurray has seen booms before, and when the current growth cycle took off, in the late 1990s, "there was some reserved optimism about how long it would last," Cooper said. Around 2003, when the price of oil started to climb and the world's petroleum appetite was showing signs of unlimited growth, "it was apparent that this was an unusual growth phase," he said.

It certainly was. The population was estimated at 64,000 in 2006 and had risen to 79,000 by the time a census was taken in 2007. The population is currently estimated at about 85,000, with another 20,000 to 25,000 people living in and around town as part of what is called the "shadow work force."

These are workers who are in the area only temporarily, doing construction in town or working on the many industrial projects associated with oil-sands mining and upgrading. Most of those in the shadow work force live in work camps officially known as "project accommodations."

Although people have come from all over the world to the region around Fort McMurray, the vast majority of newcomers are from other Canadian provinces, particularly Newfoundland, where fishing, the main industry, has all but collapsed.

Phil Heath, a "Newfie" who has been in Fort McMurray since 1980, was working as a project superintendent on an addition to a downtown hotel. He said he's seen lots of ups and downs over the years, but nothing like the boom of the past few years. He said there are thousands of Newfoundlanders working in and around Fort McMurray.

"They've got bumper stickers in town saying, 'Fort McMurray is Newfoundland's second-biggest city,'" he said.

In recent years, he said, as it has become more difficult to find skilled workers, the oil-sands companies have been bringing people in from wherever they can find them, including Mexico, the Philippines, China and Great Britain.

Told that a recent study by the municipal government estimated that 98 percent of the workforce was Canadian, Heath smiled at a co-worker and said, "I have me doubts about that."

Tough competition
Heath said most of the people he hires have just arrived in town and will do construction work for a few days, weeks or months until they can get on with the oil-sands companies.

"The money is a big problem," he said. "You can't compete with the oil sands."

He can pay laborers $18 or $19 an hour and skilled workers $25, but that kind of money doesn't go far in a town where a one-bedroom apartment rents for $1,800 a month and a mobile home with a lot can cost $500,000.

"I was only of the lucky ones. I bought my trailer in '96," he said.

Denis Tremblay, an ironworker on the hotel expansion, said he gave the oil-sands industry a try but didn't like it. Although the work camps were supposed to be drug- and alcohol-free, Tremblay said, too many workers were drunk or high during their off time and were always looking for fights.

The 46-year-old from Montreal, who is tough-looking but good-natured, said he lasted only four months.

"I don't like the camps. Too much trouble," he said.

But the pay was very good. He got $34 an hour straight time, but sometimes he'd work 25 days straight, 10 hours a day, making time and a half on Fridays and double time on weekends, not counting overtime.

Because there is so much money to be made in Fort McMurray, unskilled jobs often go begging, even when a restaurant like A&W is advertising a wage of $13 an hour. To fill the gap, African and Asian immigrants - Thais and Somalians, in particular - from other parts of Canada have been moving into town, taking many of the service jobs.

In the Aug. 15 edition of the local newspaper, Fort McMurray Today, there was a front-page story about Brian Jean, who represents the area in the Canadian Parliament and who had invited a number of other members of Parliament to Fort McMurray to educate them on what was happening in "a boomtown struggling with infrastructure shortfalls." In a short accompanying article, it was announced that Jean had temporarily closed his office in Fort McMurray because he couldn't find anyone to staff it.

"We're in a situation where our staff quit, and it's very difficult to find people to replace them," he told the paper. "I'm competing with some of the biggest employers in Canada that are able to pay major dollars."

Reaching new heights

At Northstar Ford and Lincoln, a dealership on the edge of town, Manager Robin Bohl is a Sasketchewan native who came to Fort McMurray a year and a half ago. Asked when the height of the boom was, he answered, "The height? Every day I think is a height."

Some oil-sands projects are going through temporary setbacks, he said, but Alberta "is the economic center of the world right now." That means good business for his dealership. In addition to the high pay, he said, the temporary workers receive a per diem, known as a "living out allowance," that can be as much as $200 a day - $6,000 a month.

Despite the big money in town, Bohl said, people rarely pay cash for new vehicles. He said nearly everyone uses conventional finances "because they've got a boat and a Sea-doo and two Ski-doos and a mortgage."

More notable is the number of people willing to trade in a vehicle after one or two years, though depreciation means they're stuck with a big negative equity on the vehicle. "That doesn't seem to matter here," he said.

Because so many temporary workers live in camps in the woods, Fort McMurray isn't affected quite as heavily as it would be if all of them tried to squeeze into the city. As it is, a recent study commissioned by the local government found that the typical temporary worker visited town every 10 days, mostly to shop or go out for dinner and drinks.

They are probably looking for a little excitement, too. A notice tacked up in the men's room at the Oil Can Tavern attached to the Oil Sands Hotel bore the headline "Syphilis alert!" and urged patrons to get tested for sexually transmitted infections. "There is an alarming rate of sexually transmitted infections in Fort McMurray," it said. "Some STIs, like syphilis, can seriously affect your health."

Another sign of the boom town, perhaps, was the news, reported in August, that vehicle thefts in Fort McMurray in the six months ending on July 31 nearly doubled compared with the same period last year.

The report in Fort McMurray Today said that in the first six months of this year, 617 vehicle thefts had been reported. In Billings, which has at least 15,000 more inhabitants than Fort McMurray, the tally of auto thefts was 334 for all of 2007.

Cooper, with the municipal government, said local authorities have been trying hard to make long-range plans. Although Fort McMurray has been around for decades, the recent growth has been so rapid that all the important infrastructure - sewer and water lines, electrical service and so on - needs to be upgraded or rebuilt.

"What we're doing is building a city from scratch," he said.

Contact Ed Kemmick at ekemmick@billingsgazette.com


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