Industry says implementation of oilsands strategy will be key

The province said its oilsands strategic plan announced Thursday will benefit both industry and the environment, while sending a message to the world that Alberta's economic engine isn't going to throttle down anytime soon.

"I think it clearly sends a message to the rest of the country and the world that the oilsands are going to be developed, they're going to be developed for a long-time and they're going to be developed in an environmentally responsible way," said Lloyd Snelgrove, president of the Treasury Board and Minister responsible for the Oil Sands Sustainable Development Secretariat.

"So, the discussion isn't anymore are they going to be closed, are they going to be scaled down.

They're going to be developed."

Called Responsible Actions, the document is a 20-year strategic plan that will provide an integrated and coordinated policy approach to responsibly managing Alberta's oilsands areas (DOB, Feb. 12, 2009).

Industry reaction to the strategy was generally positive but low key.

"I see it as a roadmap. I think for us what's going to be critical is taking this roadmap and turning it into an implementation plan," said Greg Stringham, the Canadian Association of Petroleum Producers' (CAPP) vice-president of markets and fiscal policy, said.

"The government has already said they're going to start moving in that direction and we're anxious to sit down with them."

Stringham said the strategy addresses many of the key issues that were identified during almost two years of oilsands consultations conducted previously. However, much work remains to be done before full-scale implementation can occur.

"I think that on all of the various strategies in the report, we're going to have to sit down with (government) and say, 'How do we turn this into either policy or an action plan as we move forward," Stringham said.

"You start with a strategy, move to the objective and then you move to the implementation plan. I think that's what will occur."

One of Canada's largest oilsands producers is also taking a wait and see approach.

"At this early stage we are very supportive of having a long-term view for the industry," said Shawn Davis, Suncor Energy Inc. spokeswoman.

"We're looking forward now to sitting down with other industry members and the government to flesh out the details."

Until that process takes place, Davis said it's too early to offer effective comment on the package presented Thursday by the province.

"At this point in time it's a little difficult to comment on the details or practical applications because the report has a lot of over-arching strategies rather than specifics," she said.

"We are absolutely supportive of those over-arching strategies but it's really hard for us to say how (the strategy) is going to relate to our business, whether we're supportive or not supportive of the practical application of it, because it's just not in there at this point in time."

With some critics labeling the provincial government's newly-minted oilsands strategic plan no more than a 47-page public relations exercise with little substance, Premier Ed Stelmach was on the defensive yesterday.

"Some one said today, 'Where's the teeth?' Well this is the brains. It's laying out a long-range plan to work together in a coordinated approach so that we develop this world class resource responsibly," Stelmach told reporters in Edmonton.

"It's really a framework for a growing and greener economy."

The premier said that dialogue with industry and other stakeholders will be key to moving the strategy forward, although he offered no timelines and few details as to how and when those efforts will commence.

"This is the roadmap for the future and I'm confident that with working together with industry and all parties that have an interest in this area that we're going to manage our environmental impacts and social impacts as well," he said.

The head of an oilsands' group said industry is keen to work with government to begin discussions on how the plan will be rolled out.

"It allows us to get on with development of what is a pretty important resource," Don Thompson, president of the Oil Sands Developers Group, an industry organization, said. "We look forward to working with the government."

Stelmach was adamant that the timing of the release of the strategy had nothing to do with the pending Canadian stopover of United States President Barack Obama, who makes his first official visit to Canada on Feb. 19.

"(Work on the strategy) started two years ago and I don't think that President Obama even thought he was going to be a candidate two years ago. It's all speculation," he said.

With the strategy offering little immediate guidance, the premier was asked what the government was going to do to help bring back the industry, which because of the current market and financial crisis and low commodity prices, has seen a massive scale back of proposed projects of late.

Stelmach sidestepped the question and instead said the current downturn will allow the oilsands sector to catch its breath and prepare itself for when an economic rebound occurs.

"The oilsands operators are investing a considerable amount of money - billions - and are now taking this time during the downturn to maintain their plants and that's going to allow them to catch up," he said.

"As well, as some of the operating costs and other costs related to new development come down, we'll see the investment come back."

The Alberta Federation of Labour (AFL) was one of the more vocal critics of the Tory plan. It said that Premier Stelmach's promise to keep oilsands jobs in Alberta instead of shipping them down a pipeline to the U.S. seems to have been compromised.

"What this document says is that government will 'urge' and 'encourage' big energy players to diversify the industry. But what it doesn't say is that the government will actually intervene," says Gil McGowan, AFL president.

"This kind of limp language is cold comfort to the thousands of construction and energy workers who have lost their jobs over the past two months - and the thousands of others who will almost certainly meet the same fate over the next year."

McGowan said the report downgrades the government's promise to upgrade and refine more bitumen in the province to an "aspirational goal."

At the same time, the report says the government will "encourage the development of more outbound pipelines - which, up to this point, have been little more than bitumen superhighways, taking raw bitumen (and potential Alberta jobs) to refiners in the U.S. Midwest and Gulf Coast," McGowan said.

The AFL also believes the plan seems to accept the argument - "advanced by industry groups like the CAPP" - that Alberta actually needs to ship more raw bitumen to the U.S. in order to "find a better market price."

McGowan says that by embracing this argument, the government has basically given up on its previous promises to champion value-added jobs.

"The Tories can't have it both ways. Either you believe we should create value-added jobs here or you believe that raw bitumen should be shipped to the States," McGowan said.

"This report suggests the government has sided with the big upstream energy players who want to export more raw bitumen. As a result, everything else in the report dealing with the subject of value added jobs is little more than lip service."

The recommendations will do little to slow the pace of development or improve environmental controls, said Simon Dyer of the Pembina Institute, a non-profit Alberta-based group that researches environmental policy.

"It's a plan to do more planning," Dyer, the group's oilsands director, said. "It lacks specifics, timelines and accountability. There's nothing binding."

Daily Oil Bulletin, Fri Feb 13 2009
Byline: Paul Wells

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