Keeping the energy boom from going bust
Development 'Considerable efforts' will be needed to attract new industries, says report
OTTAWA - In the year 2017, the thousands of skilled trades and engineers who have finished building a second nuclear power plant at Point Lepreau and a second oil refinery just east of the city could be headin' down the road.
The alternative - and indeed the goal of economic planners - is to keep those workers and their paycheques in the region.
For that to happen, the $19 billion in proposed projects and the estimated $44 billion in spinoffs must become one economic boom that is not shadowed by a bust.
But it won't be easy, warns the action plan to make it happen.
"There will need to be considerable efforts devoted to using the opportunity provided by 10 years of economic growth to attract new industries and economic development," says the Benefits Blueprint. "The success of this initiative will provide long-term sustainable growth long past the current round of expansion."
The blueprint is a consultant's report funded by the province, ACOA and Irving Oil, that recommends how to maximize and sustain the benefits of six megaprojects in Saint John, while minimizing the negative effects.
The projects underway or being considered include a new liquefied natural gas terminal and supporting pipeline, a $1.4 billion refurbishment of the Point Lepreau nuclear station, a new potash mine in Sussex, and potentially a second oil refinery and a second nuclear reactor.
The proposed construction projects will create 8,300 construction jobs at their peak in 2014 - more than the 5,500 workers the sector employs locally.
Together with indirect jobs, these positions give both Saint John and the province a chance to reverse a longstanding trend of losing population, says the report.
Steve Carson, who heads the local development agency Enterprise Saint John, said the project proponents see having two refineries - each larger than any other in the country - as foundations to attract other industry.
"If you look to other areas of North America that have significant refining capacity and ready access to natural gas, there's other industries - everything from pharmaceuticals to plastics to others - who congregate around the infrastructure," he said. "We'll also have a well-trained workforce to build their facilities and we'll have significant capacity from a design and engineering capacity."
Beyond Irving Oil, its partners Repsol YPF of Spain and BP, as well as Emera, parent company for Nova Scotia Power, are all weighing what opportunities exist for them beyond the refinery and liquefied natural gas terminal, said Carson.
"The ability to attract new and large partners to the table is a very good possibility," he said.
There are opportunities, agrees Elizabeth Beale, president of the Atlantic Provinces Economic Council, but "to position ourselves as manufacturing leaders is a pretty hard case to make right now unless it's a very, very specialized area," she warned.
New Brunswick faces the same challenges in the manufacturing sector as the rest of North America.
"The question would be, 'is any part of Canada in a good position to grow its manufacturing base?'"‚"
With the high dollar making it hard to compete with low-wage rivals in other countries, as well as uncertainties in the U.S. market, many smaller New Brunswick companies may be wary of making the investments in employees and equipment to outlast the megaproject construction, said Beale.
Firms offering engineering and design, environmental expertise and construction services seem to her to be in a better position to reap lasting benefits than small manufacturers are.
Said Beale: "you have to be realistic about the extent to which megaprojects can provide the employment base for a next round of diversification."
Carson said the scope, scale and concentration of several different projects over a decade makes the energy hub different from the multibillion-dollar frigate contract at the Saint John shipyard in the 1980s and 1990s.
"This isn't one project or contract of a few years' duration with a beginning and an end," said Carson.
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