Thousands of jobs will continue to be "lost down the pipeline" as a
result of government's failure to adopt more aggressive policiesEDMONTON, July 22 /CNW/ - The Alberta government has finally added flesh
to the bones of its long-promised Bitumen Royalty In-Kind (BRIK) program - but
one of the province's strongest proponents of an Alberta-first oil-sands
policy says the program doesn't go nearly far enough to keep value-added
energy jobs in the province.
"Since becoming premier, Ed Stelmach has promised new policies that would
stop valuable jobs in oil-sands upgrading and refining from being shipped down
the pipeline to places like the U.S. Midwest and Gulf Coast," says Gil
McGowan, president of the Alberta Federation of Labour.
"Now, after two long years of waiting, we're finally seeing the plan: but
frankly, it's deeply disappointing. The government's rhetoric on this issue
has been big, but the program they've delivered is shockingly small."
McGowan points out that the 75,000 barrels per day of raw bitumen that
will be made available for Alberta-based upgrading under the program is little
more than a drop in the bucket compared to total oil-sands production.
"It represents only 6.25 per cent of the 1.2 million barrels per day
produced from the Alberta oil sands each year," says McGowan.
"If this is all the Stelmach government has to offer when it comes to
policies to promote value-added development in the oils sands, then Albertans
should get used to losing refining jobs to the U.S. - because this program is
not going to turn the tide. The government is letting Albertans down by
setting their sights far to low. Their lack of ambition is truly frustrating
and disappointing."
McGowan says the 75,000 barrels per day of bitumen collected under the
BRIK program will, at most, provide feedstock for one new upgrader - and a
small one at that. Comparisons with the capacity of existing upgrading
facilities put the government's promised bitumen reserve in perspective:
Syncrude currently processes 300,000 barrels of bitumen per day; Suncor
processes 275,000 barrels and Albian Sands-Shell Scotford processes 155,000
barrels.
"The small scale of the BRIK program underlines the weakness of using the
royalty system as the government's only tool to address the problem," says
McGowan. He says what's really needed are more aggressive policies: like
export restrictions, conditional lease agreements for companies working in the
oil sands and even the creation of a crown energy corporation to spearhead the
construction and operation of Alberta-based upgraders and refineries.
McGowan says these kind of policies are needed to deal with the "new
generation" of oil-sands developers (companies like Encana, Conoco-Phillips,
Husky and Exxon) who are planning to export most of their raw bitumen to the
U.S. for processing, as opposed to the "older generation" of developers
(companies like Suncor, Syncrude and Shell) who traditionally have done their
upgrading in Alberta.
McGowan says more aggressive policies like the ones he favours are
actually nothing new for Alberta. They were used successfully by the Lougheed
government in the 70s and 80s to create a value-added petrochemical industry -
one that had not existed before and which continues to contribute billions of
dollars to the provincial economy every year.
"We were hoping the Stelmach government would learn lessons from the
Lougheed era," say McGowan. "But, if this is all that they have up their
sleeves, it's clear that this latest version of the Conservative government is
a pale imitation of the original."
McGowan concluded by saying that even if the BRIK program is successful
in kick-starting one small upgrader, it won't do anything to move the province
toward the more ambitious goal of refining a greater proportion of our oil
into more valuable products like gasoline, diesel and jet fuel.
"The program sets its sights too low both in terms of volume and in terms
of how high the government wants to climb the value ladder," says McGowan. "If
this is all the government has to offer, then basically what they're saying is
that they're content for Alberta to remain stuck on the bottom few rungs of
the value ladder. I think most Albertans aspire for something bigger and
better."
For further information: Gil McGowan, AFL president @ (780) 218-9888
(cell)
