More than half of the province’s natural resource revenue comes from a region most British Columbians rarely, if ever, visit, and experts say Vancouver’s business community is missing out on its huge economic opportunities.
Most Vancouverites see northeast B.C. as a vast tract of land with little or no business potential; Canada’s biggest oil and gas companies see much more. In fact, northeast politicians and business leaders say, apart from some political lines, their “forgotten” corner of the province has more in common with Alberta than it does with B.C. Senator Richard Neufeld, a northeast resident and B.C.’s former energy minister, said the relationship between business communities in Vancouver and Fort St. John is almost non-existent when compared with influence from Edmonton and Calgary.
“I’ve never seen a connection, to be perfectly honest,” Neufeld recently told Business in Vancouver. “I’ve been in business and politics all my life [and] northeast B.C., from the eyes of Vancouver, most people don’t even know where the hell it is. If you walk down the street in Vancouver and say, ‘Do you know the largest reserves of shale gas in North America are in northeast B.C?’ They’ll say, ‘Is that close to Calgary?’”
The solution may be as simple as determining what opportunities exist for Vancouver companies in the northeast.
According to the Ministry of Energy, Mines and Petroleum Resources, the province’s oil and gas industry accounted for 55% of the government’s natural resource revenue in 2009-10.
The province raked in $896 million that year in oil and gas rights sales, most of which stemmed from B.C.’s lucrative Horn River and Montney shale gas basins.
Business leaders in the northeast say the oil and gas industry not only drives job creation in terms of industrial projects, but it also has created a serious need for machinists and manufacturers to support that industry as well as retail outlets and restaurants.
But big business from Alberta, the heart of the Canadian oil and gas industry, has moved in.
For example, each of the 11 members of the Horn River Basin Shale Gas Producers Group either has an office or is based in Alberta.
Steve Thorlakson, general manager of Surerus Pipeline Inc. and the former mayor of Fort St. John, said the gap between Vancouver and the northeast has historical origins.
“There was no physical connection between northeastern B.C. and the rest of British Columbia until 1958, so it’s kind of a forgotten corner of the province.”
Before the highway was put in the only road access into that part of the province was from Alberta.
That’s created a long-standing relationship with Wild Rose country, and oil and gas expertise from Calgary has bolstered it ever since.
Neufeld said that explains why B.C.’s oil and gas industry is largely managed from Alberta.
“When you’re out on a [gas] frac that’s costing an oil company tens of millions of dollars you want to have your best people there and those are people who do that all the time,” said Neufeld.
But what about the service and supply sector?
At a recent energy conference in Fort St. John, Neufeld pressed Calgary executives from Talisman Energy Inc. (TSX:TLM) and Spectra Energy Corp. (NYSE:SE) to ensure B.C.-based companies have the same opportunities as those from Alberta.
Neufeld later said oil and gas executives are often keen to support regional job growth, but workers on the ground tend to hand work to contractors they know, which are often based in Alberta.
Yet North Vancouver-based SacrČ-Davey Engineering is one B.C. company that does get a fair bit of work in the northeast.
Sacre-Davey vice-president Warren Johnson said Vancouver has a wealth of engineering expertise that could be used for northeast clean-energy or mining projects as well as oil and gas.
But access is still an issue.
Johnson said there are few direct flights from Vancouver to Fort St. John, and if he needs to travel to the northeast on short notice a round-trip ticket can run in excess of $1,000.
“That’s one of the reasons why we opened our office in Fort St. John.”
Thorlakson said road infrastructure is also a problem.
He pointed out that over-sized shipments that could normally travel from Vancouver to Fort St. John are often rerouted through the U.S. and Alberta because B.C.’s single-lane highways don’t have the capacity to support them.
He also said the Vancouver Board of Trade used to make regular visits to the northeast to keep up relations, though the Board of Trade told BIV it couldn’t recall any such visits and leaves most inter-regional business discussions to the BC Chamber of Commerce.
Thorlakson believes geography and history continue to play a key role in disconnecting B.C.’s business communities; what’s left is a province that’s somewhat balkanized.
“We’re further from Fort Nelson to Vancouver than it is from Vancouver to San [Francisco], and we’re all in one province,” Thorlakson said. “Perhaps as it took a long time for trade missions to China to finally crack through and build those opportunities that are now paying dividends, we need to think about that on an internal basis as well.”