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      In the Heart of Canada's Oil Country, a Mixture of Uncertainty and Relief

      In the Heart of Canada's Oil Country, a Mixture of Uncertainty and Relief In the Heart of Canada's Oil Country, a Mixture of Uncertainty and Relief In the Heart of Canada's Oil Country, a Mixture of Uncertainty and Relief
      Photo by Jeff McIntosh/The Canadian Press

      Americas

      In the Heart of Canada's Oil Country, a Mixture of Uncertainty and Relief

      By Mack Lamoureux

      Over the last fifteen years, Fort McMurray has reached an almost mythical status among Canadians. 

      It's the place where the money flows and the big trucks drive. It's where the population has doubled since 2000, and, until recently, a young worker with no schooling could get a $100K job on a Tuesday, then quit by Thursday because a better offer came along.

      For environmentalists, the hub of the Alberta oil sands industry is a place of nightmares; for capitalists, a place of dreams.

      The boom and bust cycle that revolves around the price of oil means residents of this city five hours north of the provincial capital of Edmonton are well acquainted with high highs and low lows. And Paddy McSwiggins has seen them both.

      If you cut through the Athabasca river valley and into the core, then swing a left onto Thickwood Boulevard, you will inevitably find yourself at the longtime staple of Fort Mac nightlife. This Tuesday, the bar packed up and closed two hours before it would have a year ago.

      "Last year at this time we were full to capacity both nights of the weekend and had a line up out the door," owner Gareth Norris told VICE News. "But now we only maybe fill up close to capacity once a week and the line is pretty much gone."

      Norris has been in Fort McMurray since 1982, when he immigrated with his parents from the UK. He and his business partner, Trish Van Der Haegen, own several local businesses around the oil town. He opened Paddy's in 1998. This is about the fifth economic downturn that he has seen in the city and he said that the long term residents of Fort McMurray have long since learned how to handle a slump.

      "We have two choices: we can panic or we can take advantage of it," said Norris. "It's a chance to do some maintenance that we normally don't get a chance to do. There are contractors that are available now that aren't all tied up on site. Guys that are good guys that we would like to have work as opposed to someone who will be gone in six weeks when I phone him to fix something. That, for us, is a sigh of relief."

      Much of Fort McMurray's fortunes live and die by the oil sands. Alberta, which holds the world's third largest oil reserves and which depends on natural resources for almost one third of its revenues, has been hit hard in general. In the span of just one year, the price of crude has plummeted from more than $100 USD a barrel (according to West Texas Intermediate) to $55 in April.

      A report released on Thursday by the Conference Board of Canada indicated that Alberta's real gross domestic product will contract by 0.7 percent this year — a far cry from the 4.4 percent growth that led the country last year.

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      During the money-laden times, with projects rising and construction companies hiring, oil patch workers were set up in dozens of camps that dot the Fort McMurray horizon. This transient "shadow population" can bolster Fort McMurray's count of 77,000 souls to 116,000. But when prices slump, so do the expansion projects. During a downturn, companies still operate and require maintenance, but they no longer need construction workers. This group has been the hardest hit. Thousands have been laid off.

      Matt Ward was one of these layoffs. The machinist by trade is one of the many Atlantic Canadians that made the trip out west towards Fort McMurray for work. He found it easily when he arrived three years ago and was hired on as a machinist in a shop almost immediately. But because of the low price of oil and the slowdown of work, his company, ACDEN, had to tighten its belt. They have gone from forty five employees to under twenty since February. Ward has since found work at a tool distributing company but he said that times are tough for those in the oil field.

      "Everyone knows someone that has been laid off or is going through layoffs," Ward told VICE News. "A lot of my friends and I work together to try and find each other work but a lot of my friends have left. Found work in Saskatchewan, you know?

      "I've been to more going away parties here than I have been at any other place I've lived."

      And the forecast for the oil and gas construction industry is not improving. A recent report published by the Petroleum Labour Market Information Division of Enform analyzed the job market and predicts up to 185,000 oil-related job losses in the future, two-thirds of which will be felt in Alberta and 58,000 of them in oil and gas extraction and related construction. Analysts vary, but some have said that the Canadian oil sands have lost a foothold in the world market and there has been a recent shift towards other oil producing companies such as Saudi Arabia and the United States.

      Fort McMurray — which was famously compared to Hiroshima by rocker Neil Young —  has also been a lightning rod for environmentalists, who have called on the federal government to impose moratoriums on new oil projects. The environmental footprint of the oil sands is massive, but a recent report by the Council of Canadian Academies found that the implication of several short term and long term technologies could reduce the environmental damage on a per barrel basis. 

      Meanwhile, the recent provincial election of the left-of-center New Democratic Party has locals wondering what will come of a slate of pipeline proposals to take Alberta's oil to international markets. Some analysts argue that with lowered production in the long term, these pipelines may not be necessary, but there are residents who welcome the job prospects that would accompany them.

      Fort McMurray Chamber of Commerce president Nick Sanders said it's not so much that the town is feeling a bust, but more so a plateau. Because the growth was so extreme for so long, the current situation leaves the impression of a bust, he argued.

      This may well become the new norm: there are few majors projects on the horizon and in 2017, Sanders said, companies were looking to focus more on operations as opposed to expansion. To Sanders, Fort McMurray has been making the transition from a boom town to what he called a "family town" for years and this may be the final turning point.

      "I'm not seeing this as a low, I'm seeing this as a medium," Sanders told VICE News. "What's happening is that there are no new projects. This is an oil town, but it's an oil town that's still working. It's just not growing. The 76,000 people that live in this community are still here to support that two million (barrels of oil per day) of ongoing oil production but also the maintenance that is required in the oil sands."

      But transitioning away from a boom town won't be easy. Many of the local business that sprouted up to cater to the ballooning population and influx of capital are facing tough decisions. Hotel rooms that were once almost impossible to find are now readily available. Bars and local businesses are closing their doors.

      The real estate industry in particular has been hit hard. Sales have dropped by a massive margin while the average price of a home has remained relatively stagnant, at around $560,000 USD, turning it into a buyer's market.

      "This town died ever since the recession hit," said Darin Geldarnt who works in Fort McMurray's bar scene. "Ever since that hit it feels like the bars have died. When I first started at Club NV, I was told that it used to be epic. It was crazy packed and it started dying off and I started working there and it's like, no ones here. You used to make $100 a night in tips, and that was just for small jobs.

      "Then, you would walk out of the bar with handfuls of cash and now you'll maybe walk out of a bar with 40 bucks."

      Still, people like Sanders think Fort McMurray will always reap some benefit from its proximity to the oil sands, even during a downturn. The oil sands are tied to Fort McMurray, for better or for worse, and for Sanders that's just fine.

      "We are ok with Fort McMurray being known as where the oil sands are. And we're perfectly comfortable with that because that is who we are, that is what caused the growth and that is what created opportunities for people to move here and start their family here," Sanders said. "We here are pretty comfortable with who we are and what we are."

      Follow Mack Lamoureux on Twitter: @macklamoureux

      Topics: americas, canada, alberta, oil sands, environmentalists, fort mcmurray, crude oil, recession

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