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Notes from Flight 163, the oilsands shuttle from Toronto to Edmonton

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Shared with permission from author Stewart Muir

Stewart Muir is a Victoria-based writer who serves as executive director of the Resource Works Society.

On a recent Monday morning, I found myself on Air Canada Flight 163 from Toronto Pearson to Edmonton. As the plane loaded, I began to sense there was something not so regular about the passengers boarding the Airbus 320 for a regularly scheduled flight.

Unlike those I more typically see on my flights, nobody was in flip-flops or golf wear, or fussing with oversized or unnecessary luggage. This was a mix mostly without the easy-to-spot snowbirds, students, and first-time fliers.

The travellers this day were mostly middle-aged men, fit-looking and dressed Mark’s Work Wearhouse casual. There were some women too, and like the men they moved with familiar ease through the cabin lugging full but neatly packed backpacks or duffels. Many carried a preferred travel distraction in hand, ready for a few hours of Netflix or sudoku. I could hear the distinctive accents of the Maritimes and Quebec, and the more familiar central Canadian English, as they found their places the way transit riders enter a subway car.

It was rapidly apparent that I was witnessing a commuter routine, one not meaningfully different than the suit-filled shuttles carrying day-tripping lawyers, accountants, pharma reps, engineers and lobbyists from the same airport that morning to destinations like Ottawa, Montreal, Boston and New York.

In concentrated form, I was witnessing a typical, daily migration of the Canadian oil sands workforce, probably with some LNG and mining thrown in. They were heading to the workplace. Not for a day, but for stretches of a week or two.

Multiply this by dozens or scores, in airports across the country, usually less starkly evident than on this particular flight, and it was just a regular day in Canadian air travel as the massive energy employee base changed shift.

A few hours later, after we unloaded at the other end, I headed for the exit and my Uber. Not so most of my fellow passengers. They continued on their way to connecting flights – to destinations such as Fort McMurray, Grande Prairie, and air services flying direct to some of the big oil sands projects – in time for shift change at the work camps where they were expected.

Statistics could not convey more forcefully than this how the oil & gas economy has a singular and powerful effect on the economy. The large paycheques drawing these men and women to their jobs in the West flowed directly back to their family bank accounts in the GTA and beyond, paying mortgages, grocery bills, taxes and hockey fees.

Flight 163, multiplied many times over, represents what the energy sector, at its most direct and tangible, does for the Canadian economy.

This is what I’m thinking about while surveying a nation that is now deep into an unprecedented social and economic crisis.

Over the coming days and weeks, things that we do will affect how deep and damaging this crisis becomes.

We are seeing Green New Deal advocates pursue the thesis that the coming economic catastrophe is the perfect moment to “transition off fossil fuels”. There are plenty of signs of this thought process – “Hey guess what guys, in one stroke we could meet the Paris Agreement by dropping emissions to 30 per cent below 2005 levels – not by 2030, but by 2021!”

To put this in perspective, consider that the Conference Board of Canada recently estimated that in one of the milder transition scenarios, meeting such targets will cost Canadians $2.2 trillion and require 14 per less use of residential energy, 47 per cent less car travel, eight times the subway use, and 54 per cent less domestic air travel.

Who’s ready to make this change overnight? We couldn’t do it if we wanted to. Think for just a moment about the costs and tradeoffs required, and the difficulty of accomplishing it in the midst of a global health crisis. Clearly it makes no sense at all. Yet Canada might be the only oil-exporting country where accelerating the transition is likely to receive serious acknowledgment in senior decision-making circles.

Even without such measures, Canada is already moving in the right direction: we are a global leader in clean energy, with 80 per cent of the population living in provinces where more than 90 per cent of electricity is drawn from non-fossil fuel sources. This alone makes us the envy of the world. The prevalence of clean electricity means that wherever it is used in industry, the resulting resource commodity exports can outcompete most other similar products in climate terms, with the bonus that they can allow importing countries to reduce their own emissions.

Mere inattention could do as much damage at this time as a wrong decision. Standing back and watching the domestic oil and gas industry topple will have an effect on citizen wellbeing far in excess of what the collapse of any other industry would bring.

We would be looking at the long-term impairment of Canadian living standards – that is to say a reduction in the value of our jobs, in our quality of life, in our educational opportunities, and in our ability to help other countries while continuing as a net positive influence on the world.

The fossil fuel industry – “it is how we earn our living”

It’s hard to describe how important the energy industry is to Canada. Let me try.

Andy Calitz, the former CEO of LNG Canada who performed the herculean task of achieving a positive final investment decision (FID) for the project before moving on to his next challenge, provided a memorable image when he spoke at a small dinner of diplomats and academics I attended not long after the FID.

When the first shipload of liquefied natural gas departs from Kitimat in a few years’ time, he said, that cargo would be worth $100 million – a staggering sum. (I’ve run this figure past a couple of experienced heads in the energy field, and nobody has scoffed at it.)

In Vancouver, we go giddy each spring at the thought of cruise ship season, which last year saw 290 sailings out of the port. If, as is commonly said, one of those sailings means $1 million injected into the local economy, how does that compare with LNG?

Back of envelope math says that a single year of LNG Canada operations, with its promised traffic of one ship in and one ship out every day, will have the impact of one century of the Vancouver cruise industry. I’m not knocking the cruise industry, it’s important and we need it. But let that comparison sink in.

Here’s another one.

Back in 2017, I calculated that natural gas investments in British Columbia that year were on a scale that equated to building the behemoth Wynn hotel in Las Vegas (4,750 rooms over 215 acres) in the Vancouver area, along with a special SkyTrain extension to serve it. ( Natural gas is back: British Columbia drilling surge is behind $5+ billion in 2017 investment )

Never mind that no investor has ever come forward with such a bold plan for a new resort anywhere in Canada. And it’s actually pretty fortunate that we got the energy infrastructure rather than the casino, given the prospects for tourism in 2020.

Economist Patricia Mohr recently pointed out that Canada is “a trading nation and an ‘energy specialist’ — it is how we earn our living.” Crude oil, all by itself, generated net exports of $62 billion in 2019, up from $57.5 billion in 2018 — far above any other export category.

As Ms. Mohr stated, oil exports come in handy given that we habitually run large deficits in other areas including motor vehicles and parts, machinery, electronic equipment, and consumer goods.

During the COVID-19 crisis, it’s obvious we cannot go without lifesaving medical necessities. Unlike our abundant oil, producing them isn’t a great strength. Canada must import billions’ worth of these goods every year. If you isolate just three medical categories – vaccines, medical apparatus and breathing aids – the numbers show clearly that our own ability to manufacture these items is very limited, even as consumption grows year after year.


The current global crisis has already brought a plummeting Canadian dollar, which in turn makes the imported goods that we rely on more costly. Exports that we can sell for U.S. dollars will offset this, but only if we have products to sell and markets ready to buy them. We need to preserve the ability to produce more as more income is needed, while at the same time figuring in the unfortunate reality that many of the things we export are themselves falling in price, so that higher production volumes are required just to stay in place.

The resource economy actually turns out – despite its detractors – to be both flexible and durable as a source of national well-being. Markets for some of the commodities we produce can be expanded at will, something that cannot be said of iPhones, beach umbrellas or BMWs.

Right now in Russia, the government is starting to realize it might not have been such a good idea to enter into an oil price war with Saudi Arabia. More and more evidence suggests that for a winner to emerge will require not months but years of effort, and at the end of it the United States oil industry, resented deeply by both Russia and Saudi Arabia, could well come on top anyways.

The most chilling observation, as reported today by the Wall Street Journal, comes from Igor Sechin, head of Russia’s largest oil producer, state-controlled giant Rosneft: “If you give up your mar­ket share, you will never get it back.”

There’s a lesson in this for Canada. Those who see an “opportunity” to deliberately give up our oil market share, to encourage a fast pivot into an unknown energy future, are playing recklessly with how we as a country earn our living. If we ratchet down production by letting industry fail, and decide later that it was a mistake to do so, we will not easily be able to retrieve our market share. That’s a frightening thought. Worse still, killing off the industry will make Canadians more dependent on imported oil, which will have to be paid for using a weakened loonie.

Doing what’s necessary

In 2018, the federal government announced an export diversification strategy that would increase Canada’s overseas exports by 50 per cent by 2025. Even before the combined oil/pandemic crisis, it seemed an unlikely ambition.

“Investing in infrastructure to support trade” was one of the ways Ottawa deemed it could aid this ambitious goal, and credit is due for supporting projects such as the so-far-incomplete Trans Mountain and Coastal GasLink pipelines.

Other forces are holding us back. The Canada Infrastructure Bank, for example, is forbidden from investing its $35 billion of capital in fossil fuel projects, even if those investments could lead to lower energy use and emissions in the oil & gas upstream.

Meanwhile, our national infrastructure minister seems physically incapable of uttering the phrase “energy infrastructure” let alone the p-word (pipelines). Even our minister of natural resources has been placed in the uncomfortable position of carrying out a mandate letter requiring him to making finding alternative employment for oil and gas workers and communities a central task.

Now is the time to save, not strangle, an oil and gas industry that is frantically signalling the need for intervention .

Prime Minister Justin Trudeau’s Quebec lieutenant Pablo Rodriguez yesterday promised Bombardier : “Our government is taking the necessary steps to get you financial help as quickly as possible.” A stock analyst opined that the Canadian and Quebec governments were “likely to offer support if Bombardier gets close to the edge.” (See Globe and Mail story .)

If a single company controlled by a wealthy clan, making luxury jets for billionaires, is to be given this treatment, then there should be no hesitation all in backing the industry that convincingly represents the foundational strength of our entire nation.

Trudeau has always found it difficult to make strong gestures of support to the Canadian oil patch. This time, finding it within himself to say those words of support matters more than ever. There is a very serious risk that Canada’s long term prosperity in both an absolute and a relative sense will be impaired by what occurs in the coming hours, days and weeks. Ahead of us, economic success will only come through determination and political commitment to put people and jobs first.

Stewart Muir is a Victoria-based writer who serves as executive director of the Resource Works Society.

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Alberta

Red Deer Hospital preliminary designs unveiled

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Alberta’s government shared preliminary designs of the Red Deer Regional Hospital Centre redevelopment with residents from central Alberta.

On March 14, Alberta’s government held its first public information session since January 2023 with Albertans in Red Deer and area about the Red Deer Regional Hospital Centre redevelopment. Albertans have long waited for the redevelopment and Alberta’s government made the first significant commitment and progress on the hospital by allocating $100 million in Budget 2020, followed by another $1.8-billion commitment in Budget 2022.

In addition to preliminary design drawings, residents were able to view a video simulating a flyover of the new patient tower and power plant. Project representatives were also on hand to speak about the project. The session was attended by about 150 residents, media and officials including Ken Johnston, mayor of Red Deer.

“We were excited to share preliminary designs for the Red Deer Hospital redevelopment yesterday. The number of people who attended the session validates the importance of this project to the central region. We are proud of the role Infrastructure is playing in delivering one of the most ambitious hospital redevelopment projects in Alberta’s history.”

Pete Guthrie, Minister of Infrastructure

“As the MLA for Red Deer-North and the Health Minister, I’m very proud of the progress we’ve achieved, and I remain dedicated to advocating for this project. Albertans should be able to access health care when and where they need it. This project will improve health outcomes for Albertans living in Red Deer and across central Alberta by increasing the facility’s capacity and providing much-needed services and resources, including new cardiac catheterization labs, close to home.”

Adriana LaGrange, Minister of Health

Design work began in June 2023. With schematic design now complete, the hospital redevelopment is on schedule and on budget. The next stage of the project, design development, is now underway. Once complete, the new expansion will add up to 200 beds to the existing facility, bringing the total number of beds to up to 570.

With an investment of $810 million over three years in the Budget 2024 Capital Plan, the expansion of the Red Deer Regional Hospital is Alberta’s biggest infrastructure project. Last night’s information session keeps Central Albertans informed about this exciting, transformative investment in our hospital, supporting principles of transparency and accountability in the use of taxpayer dollars.”

Jason Stephan, MLA for Red Deer-South

Quick facts

  • There are two major components of this redevelopment:  
  • Project 1: construction of a new patient tower and expansion and renovation of the existing hospital’s main building
  • Project 2: construction of an ambulatory building
  • The project will upgrade several services throughout the hospital site including:
  • an additional patient tower
  • six new operating rooms
  • new Medical Device Reprocessing department
  • new cardiac catheterization labs
  • renovations to various areas within the main building
  • newly renovated and expanded emergency department, and
  • a new ambulatory clinic building to be located adjacent to the surface parkade

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Alberta

Alberta Chiefs demand Ottawa return funding for orphan well clean up

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News release from Dennis Burnside, VP & Indigenous Practice Lead, Political Intelligence

Alberta Chiefs and the IRC call on Federal Government to fulfill its environmental obligations and commitments by releasing funding to First Nations

Government of Canada seeking to return $135 million in previously committed funding to federal coffers to use as savings, instead of empowering First Nations to clean up inactive and orphan wells on their lands.

ENOCH CREE NATION, AB, March 11, 2024

Chief Cody Thomas, Enoch Cree Nation, Chief Roy Whitney, Tsuut’ina Nation, and Chief Ivan Sawan, Loon River First Nation, joined with Chiefs from across Alberta today to call on the Federal Government to release unspent funding committed to the Site Rehabilitation Program (SRP) – approximately $135 million –to be utilized by Indigenous people to reclaim additional inactive and orphan wells on their lands. These funds are still in Alberta, but Ottawa is demanding them back.

On December 12, 2023, Chiefs from Treaty 6, Treaty 7, and Treaty 8 territories wrote to Minister Jonathan Wilkinson appealing to the federal government to allow the government of Alberta to place unspent SRP monies into the FNSR Program, providing much needed funding to continue the successful work that has been accomplished by First Nations, for First Nations. Without these funds, governments and industry would be leaving over 2,000 sites to be abandoned or reclaimed on First Nations lands and territories.

Chief Thomas stated: “We still have many inactive wells on our lands that need to be reclaimed properly; we estimate nearly 2,000 sites which will cost over $225 million. We acknowledge the work that has been done under the SRP but there is more to be done. This is a liability of the lessees, and the Alberta Government is holding them accountable through the Well Closure Program. However, time is not on our side. We have a very limited land base and a growing population. We must do the necessary land stewardship immediately”.

Chief Ivan Sawan stated: “Many Alberta First Nations have felt the greatest impacts of natural resource developments which have swept through our lands and ancestral territories for generations, leaving behind environmental wreckage, while being deprived of the opportunity to meaningfully participate or benefit. We are calling on the federal government to do the right thing and release these funds for the environmental and economic purposes they were intended, so that First Nations can create meaningful job opportunities, clean up our lands, and create a healthier and more prosperous future for our people.”

Chief Roy Whitney stated: “Too many oil and gas companies have simply walked away from their obligation to remediate their well sites on First Nation Lands. The SRP was a way for First Nations to have abandoned sites reclaimed. Accordingly, it was with great disappointment when we learned that the Federal Government was not going to release the remaining funds for the SRP. We fully support the request for the remaining funds being held to be released to continue the work to clean up our Lands.”

Under the previous Alberta Site Rehabilitation Program (ASRP) $130 million was allocated to 32 Alberta First Nations and Metis communities to clean up 2,145 sites. First Nations were able to abandon 988 wells and 411 km of pipelines as well as complete 793 reclamations while working on 4,188 projects. The result was a reduction of over $123 million in liability on reserves in Alberta while creating jobs, business development and training, and improving Indigenous community engagement and capacity.

The Indian Resource Council, an advocacy group that negotiated the set aside funding for First Nations, has detailed data on inactive and orphan wells on Indigenous lands. Stephen Buffalo, President and CEO of the IRC stated that the Federal regulator, IOGC, dropped the ball by failing to hold companies liable for their liabilities. He stated that First Nations can no longer depend on IOGC to get this work done.

Mr. Buffalo added: “Under Alberta’s SRP program, the government allocated more than $130 million for cleanup projects for First Nations and the Metis. So, we are doing what we can to keep that program going to maintain the success of the initial FNSRP. About 350 community members received jobs and skills training. By removing the aging wells and pipelines we can free up land to use for housing and other purposes” This is why we need the surplus funds.

A sign, from Alberta’s Orphan Well Association (OWA), identifies a non-producing and abandoned oil well near Carseland, Alberta on Sunday, July 21, 2019. Orphan wells do not have parties responsible for decommissioning or reclamation activities. THE CANADIAN PRESS IMAGES/Larry MacDougal

When SRP funding was earmarked to support Indigenous-led projects in 2021, it was celebrated that this was an area where the federal and provincial governments were in “perfect alignment”. This spirit of collaboration was good news for the environment, for Canada’s fight against climate change, and for First Nations. Alberta Chiefs are continuing to call on the federal government to rekindle this spirit of collaboration, however, Minister Wilkinson has recently stated that the federal government has “no plans to provide additional funding for the clean-
up of inactive and orphan wells.”

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