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April 2, 2007

Oil Sands

Oil sands boom adds to worker shortage woes

In labour hungry Alberta, more oil sands production is predicted through to the year 2020, a portent that may compound the province’s construction industry woes.

A Canadian Energy Research Institute (CERI) study predicts the oil sands in Fort McMurray will triple production, pushing spending over $7.5 billion mark.

Limited time for training and demand in ICI sector construction will be pushed to the limits when the bitumen boom hits its full potential.

Potential means plenty of jobs for the construction industry, but too much of a good thing can compound the issues facing the Albertan industry, says the Edmonton Construction Association’s (ECA) executive director Darlene La Trace.

“The same thing has happened over the past two years — as soon as there’s a boom in Fort McMurray, the strains are felt everywhere, because we don’t have the people,” says La Trace. “The bottom line is, it means a positive with plenty of work ahead.

“But, if (the oil sands) are heading in that direction and there’s no slowdown in sight, then we’re going to continue to have the same challenges.”

In an unconstrained perspective, CERI predicts that Alberta could become the world’s fourth largest oil producer behind the United States, Saudi Arabia and Russia.

"They are scraping the bottom of the barrel in terms of getting enough people."

John Clinkard

Economist

Alberta being the fourth largest producer of oil in the world is fairly significant, says John Clinkard, consulting economist with CanaData.

But Clinkard expects that there will be some moderate checks to the oil sands boom as a number of factors may constrain and create temporary “pull-backs” in the industry.

The moderate checks may allow breathing room for the industry’s talks about skill shortages, says Clinkard.

A major concern voiced by the industry is that the number of people entering the construction labour force is slowing and the industry’s mean age is high.

“Right now, they are scraping the bottom of the barrel in terms of getting enough people to assist in this activity and I don’t see that that’s going to change,” adds Clinkard.

CERI agrees that there is “volatility” in the oil market due to geopolitics, short-term disturbances and fluctuations, but there is no sustainability, Marwan Masri, vice president of Research, CERI told Daily Commercial News.

“Obviously this is a two-way street,” added Masri. “It would definitely create more business for the industry, but at the same time it would create increased demand for resources, material and labour.

“The question is: is there enough labour force that can fly in from other provinces that can relieve the pressure on that market?”

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