Strathcona County promotes strategy to keep value-added jobs in Canada

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Strathcona County Mayor Linda Osinchuk

Photograph by: Greg Southam , Edmonton Journal

EDMONTON - While Alberta promotes pipelines to ship more bitumen out of province, Strathcona County has an ambitious campaign to handle more bitumen here and in Eastern Canada with new upgraders.

Mayor Linda Osinchuk recently teamed up with Ontario officials in Sarnia and Lambton County, centre of the petrochemical industry in that province, to promote a ?diversified Canadian Energy Strategy? with the goal of keeping value-added jobs in this country.

?We are in a dialogue with Ontario and the federal government,? said Osinchuk, who also met with federal Natural Resources Minister Joe Oliver this summer to discuss the county?s Alberta-Plus strategy to bring upgrading and petrochemical industries to the region and across Canada.

Osinchuk is also meeting this week with deputy premier Thomas Lukaszuk to discuss the issue of value-added jobs in the province?s energy strategy.

Without a major shift, the amount of upgrading of new oilsands production could shrink to just five per cent ? far below previous provincial targets of upgrading at least 60 per cent of the bitumen in Alberta, noted Neil Shelly, executive director of the Industrial Heartland Association, which commissioned a new value-added study.

Shelly said that?s a rough calculation based upon another million barrels a day in production over the next ten years, and only one new upgrader under construction ? the Northwest upgrader for 50,000 barrels a day, designed to turn bitumen into diesel fuel, he noted. A second, mothballed upgrader ? the Heartland upgrader ? could be ready in 18 months, but its future is still uncertain.

?We are saying we need a more diversified energy strategy,? he said. ?We will still need export pipelines, but a portion of that new bitumen production should be done here.?

A few years ago, more than half a dozen upgraders were planned for ?upgrader alley? in Strathcona County until the 2008 financial meltdown derailed the projects and oilsands operators began to push for export pipelines to take the bitumen to U.S. refineries that can handle the heavy oil.

While the proposed Keystone and Northern Gateway pipelines will be needed to handle some of the new production, Alberta and Canada need to look at strategies to keep value-added industries here as a ?cornerstone for the Canadian economy,? said Shelly.

Sarnia, the Ontario terminal of the TransCanada pipeline, has indicated some interested in an upgrader which would turn bitumen into synthetic crude oil, said Shelly. It could then supply all eastern Canadian refineries with oil for gasoline production.

?Upgrading bitumen there as well will help spread the wealth across Canada,? said Shelly. And it will also enhance energy security in Eastern Canada which currently relies on overseas oil, he added.

Strathcona County?s campaign got a significant boost in June when the Federation of Canadian Municipalities endorsed a resolution calling for federal support for a value-added strategy. Osinchuk and Lambton County officials sponsored the resolution. The Capital Region Board, including Edmonton, also endorsed the Alberta-Plus strategy.

?We are pleased that municipalities from coast to coast recognize the relevance to all Canadians and understand that we benefit as a nation from the advancement of the value-added agenda,? Osinchuk told the FCM after the vote.

Lambton County Warden Todd Case also said his is ?proud to stand together (with Strathcona) in supporting this initiative.?

Strathcona County, the Industrial Heartland Assocation and a handful of major industrial companies launched the Alberta-Plus strategy in April with an economic study showing that processing more natural gas and bitumen within Alberta would increase the province?s GDP by $6.2 billion, create 19,000 new jobs and increase provincial revenues by $630 million.

The group wanted to draw attention to value-added jobs in a discussion dominated by pipelines.

?When we talk about the domestic (energy) market, we didn?t see the level of discussion we?d like to see on upgrading and value-added,? said Shelly. ?We had a target of upgrading two-thirds of the bitumen here, but now it?s less than 50 per cent and it will go lower.?

The study was done by Ron Schlenker, an economist at the University of Calgary.

spratt@edmontonjournal.com.

? Copyright (c) The Edmonton Journal

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Source: http://feeds.canada.com/~r/canwest/F264/~3/d-cui6I5suA/story.html

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