(This is the last of a Hicks on Biz series on Alberta’s economic future if new pipelines are not built.)
For decades, Alberta’s wealth was criticized for being harvested, 100%, from the low-hanging fruit of oil and gas extraction and processing.
It was just too easy to make money from oil and gas. The sector scooped up every new engineer and scientist graduating from our universities, every skilled tradesperson coming out of our colleges. Eighteen-year-old dropouts were paid $1,500 a week to drive truck.
The bloom is off that rose. Alberta’s future growth will be the result of technology-savvy entrepreneurs reaching for that higher-hanging fruit.
But not entirely. As mentioned at the start of this series, oil isn’t going away.
Even without new pipelines, and with more oil-by-rail, oil production at a minimum will grow from 3.5 million barrels a day today to 4 million.
Meanwhile, despite the persistent denial of climate-change extremists, new oilsands technologies are lowering water use and emissions, accelerating reclamation.
At some point, given irrefutable evidence of such greening, the rest of Canada will untie its knickers and slowly lower its resistance to new pipelines – especially when owned and operated by Canada’s First Nations.
Liquified natural gas (LNG) is also on the horizon, especially when it starts being shipped from Prince Rupert/Kitimat to Asia. It’s OK in B.C. to build gas pipelines, not OK for oil. Go figure.
B.C. may hate oil, but it loves its natural gas, and Alberta will indirectly benefit — given much of the gas comes from this province.
But even at that, Alberta will have slack to take up. What can replace oil as economic drivers?
Advanced agriculture, for one: West of Morinville, a partnership between two global agricultural giants is building a new high-speed, high-efficiency state-of-the-art grain terminal that can process grains on-site to a degree unseen in Canada today.
Cannabis growing and processing, already creating at least a thousand new jobs in the city and region, is in its infancy. Champion Pet Foods, from its new plant in the Acheson Industrial Park, is exporting specialty pet foods world-wide.
Sturgeon County (north of the city) is targeting new agribusiness opportunities to meet global demand for higher-end foods – specialty milling of pulse (bean) crops for export, hemp products, malting. The pea proteins that substitute for meat in this Beyond Meat craze? Grown in Alberta!
Petro-chemicals: At this very moment, 2,000 to 3,000 tradespeople are building two new $4 billion petrochemical plants in the Industrial Heartland zone around Fort Saskatchewan. The Heartland is proving to be competitive with industrial parks in other Asian Rim countries. Some 23 global petrochemical companies are currently scouting the Heartland, says Malcolm Bruce, CEO of Global Edmonton, the new regional economic development agency.
Technology: At long last, made-in-Edmonton high-tech developers and vendors are gaining critical mass. Jobber, Yardstick, AltaML, the list of rapidly expanding technology companies is growing dramatically. That’s not to say it’s happening any faster here than elsewhere … but it’s happening.
Mayor Don Iveson trumpets the University of Alberta’s expertise in machine learning/artificial intelligence until he’s blue in the face. New wealth and job creation will come, however, from traditional companies crossing the digital bridge, enlisting robotic intelligence to be cleaner, greener, safer, faster and cheaper than the competition. The new but already impactful Alberta Machine Learning Institute is matchmaking, bringing together such companies with artificial intelligence experts.
Finally, one has to remember that Edmonton, by its own growth, is creating a more dynamic internal city economy. The city and region have grown from 1 million to 1.4 million people since 2000.
Even in 2016, when the troubles were snowballing, Edmonton was the fastest-growing city (by population) in Canada, 14.8% growth between the 2011 to 2015 census.
Which may partially explain the downtown high-rise boom, from the Ice District outwards. Residential high-rises are still sprouting like weeds, even as economic growth and job creation remains frustratingly slow.
Finally, economic growth may paradoxically come from the self-righteously green people themselves. “The green world is not the enemy of business,” declares Edmonton businessperson and futurist thinker Hank Van Weelden. “The greening of our river valley communities and Blatchford Field are eco-visions that could motivate like-minded people – with ambition and talents – to move to Edmonton.”
“More and more, the green guys and Alberta entrepreneurs have common goals,” says Van Weelden. “Face it, sustainability, ecology, bike lanes and solar panels are going to be the future. If we’re smart, we convert it all into green-oriented business … with a good rate of return!”