There's a stereotype that oil sands communities like Fort McMurray are similar to frontier towns in the Wild West. The thing is, they're more aptly described as family friendly, highly livable and truly resilient: surviving wildfires, floods and COVID-19.
That's no accident, says Perry Berkenpas, Executive Director of the Oil Sands Community Alliance (OSCA): an organization focused on building bridges between industry and local residents. Berkenpas discusses how industry collaborates to invest in communities, partners with Indigenous groups, and works toward a prosperous and sustainable future for all who live in the oil sands region.
Transcript of podcast
Leighton: Hello and welcome to another edition of the Energy Examined podcast, the podcast that discusses the issues facing Canada's oil and natural gas sector with the insiders in the know. I'm Leighton Klassen. Today, I'm joined by Perry Berkenpas. He is the executive director of the Oil Sands Community Alliance, also known as OSCA. His organization does a lot of work with the communities to help grow the oil sands in innovative and responsible ways. Perry, welcome to Energy Examined.
Perry: Thank you, Leighton. Good to be here.
Leighton: All right, well, let's start with OSCA. Tell us a little bit about the organization and what it does.
Perry: OSCA is a member-driven organization and our members are oil sands producers in the region, representing north of 90 per cent of the oil sands production, which also, those same members represent roughly 80 per cent of the oil and gas production in Alberta and in Western Canada. So, that's who our membership is. We get our guidance from those folks with the steering committee and, you know who do we work with? Our vision is to enable and build shared values and thriving communities to allow the sustainable development of Canadian oil sands. And what we're about is something that's been worked on for a number of years. It has been around for 10 plus years in previous forms and different names. But since we've been around for a long time and have a reputation and connections to come up with innovative solutions, we build relationships, collaborate to improve economic benefits for oil sands as well as the community. So, we work to what could be done individually by oil sands companies or we can do better together. And it's to work together, then with the community together.
Leighton: OK, that's great, and I know we're going to get into a little bit more about what OSCA does, but you're relatively new to the organization joining as executive director last year. So, let's go back a little bit and tell us about yourself and what you're bringing to Oscar.
Perry: So, yes, I joined OSCA in November. Prior to that, for roughly three years, I had been doing consulting work in the industry, but it is kind of my next chapter in my career, if you will. Prior to that, I'd been in large, major companies in Canada and globally working in oil and gas. And then more recently, probably the last 12, 15, 12 years exactly in the oil sands space, had been the senior vice president for oil sands for one of the producing companies in the area. I've had the chance to -- started my career in Alberta in the oil business here in 1981. So, it goes back 40 years. I worked for Imperial Oil, Gulf Canada, Conoco, ConocoPhillips, and have been in Canada and Houston working in global positions at two different times but have come home back to Canada to be here. And as far as this role goes, one of the things having been exposed to the oil business around the globe, it gave me an appreciation for how well we do things here. I come back as a proud Canadian and wanting to make a difference in the oil sands business, because I think we do this well and as a result, stuck my hand up to be considered for this role and to work with OSCA and the members to continue to advance and progress development in oil sands.
Leighton: Now you are in the Regional Municipality of Wood Buffalo. For those who might not be familiar with the region, could you describe the area where you work?
Perry: So, OSCA works in three municipalities, that would be Lac La Biche County, MD of Opportunity, as well as the Regional Municipality of Wood Buffalo, which is the largest portion of it. So most of the operations lie within the RM of Wood Buffalo, otherwise known as Fort McMurray. That tends to be the label, but it really encompasses everywhere from the Cold Lake area up through Fort McMurray and north, all of the oil sands operations in that region. And so, it's the Athabasca oil sands region.
Leighton: OK, and yeah, I think I agree. I think most people do recognize it as primarily Fort McMurray, which is, you know, the entire region is home to the oil sands, the third largest [oil reserves], I believe, on the planet. And development of these resources has generated prosperity in Canada and some criticism home and abroad. I was wondering if you could comment on a couple of things: your perspective on the criticism that sometimes is levelled at the oil sands in terms of environmental impacts, and then we'll get into what the region can do for economic recovery. But let's just talk about some of that criticism.
Perry: Well, it's an interesting thing to have heard along the way and to have strong views, because I've had the chance to be a part of growing, developing and building oil sands operations, which has given me a very inside perspective. And the criticism is, frankly, unfounded. Having seen how operations work in the UK North Sea, Norwegian North Sea to Asia, China, Indonesia, the Middle East, I've been and seen those operations around the globe and can emphatically stand up and say, 'we do this well, we do this better than anyone else in the world.' It's a world class resource and we have world class talent working on it. And we bring world class results to this. Even though oil sands is a more difficult, technically challenging and cost challenged business, we can stand up to anyone on our environmental standards.
Leighton: I don't know if you’ve listened to our other podcasts, but, you know, it does, there is a lot of other interviews we've done where we talk about those sorts of things. So, now moving on to the recession that we're in right now as a result of the pandemic, how important is the region to Canada's economic recovery, which we're just starting to get into now?
Perry: You know, the dollars and expenditures that are made in oil sands for purchasing services, goods and the impact it has on the economy -- this is not a Fort McMurray story. This is not just an Alberta story. It translates right through to all of Canada. And there you'll find lots of data out there that provides the strength of what that means. But oil sands and the growth that we've done in the past, bringing us to where we are today and sustaining it now going forward is part of what must be considered as the health for Canada and its recovery. The country, everywhere and around the globe due to the pandemic has taken on a lot of debt to manage COVID. And this is one of the key ways, if you look at the resource industries across this country, Canada is a country of builders. And when we build and grow and sustain these resource industries, it has developed the strength and the foundation that we have.
Leighton: Now, you mentioned earlier about, you know, a real team kind of mentality between, you know, producers in the area and OSCA. Can you tell us a little bit more about why it's important to have a community alliance organization such as OSCA in this region?
Perry: It's been a differentiator for oil sands and frankly, it hasn't been in place in other places to the same degree that we're doing here. It's one thing to look at oil company A versus B versus C and to have them compete against each other. What's different about OSCA is that the oil sands companies in the area have recognized that we're less competing with each other and we are more competing and needing to make a difference in how we are seen around the globe. And our competitors are Middle East production and United States production. So, the more we work together, the stronger we are. And the last producer standing ultimately will be the ones that can draw investment and attract people and the talent and the way to do that, to differentiate yourself from others around the globe, is to work together. So, it's a unique way to work together. There are industry associations all around the globe. What's different about OSCA is the directed resources towards working with the community collectively.
Leighton: OK, and that's the next thing I want to talk about, the community, we're talking a lot about industry, but what can you say about Fort McMurray itself? I think it might surprise some listeners that it's extremely livable and it's family friendly. And it's not just a bunch of trucks driving around in the oil sands. So, can you talk about the community?
Perry: Sure can, and when we talk about the community, that is everyone from who lives there who works there to provides services there and the community is more than just the city of Fort McMurray, as it includes all of the First Nations communities around the area, how they work together, how they work with all the oil companies as well. So, it's all the stakeholders involved.
When we talk about the community, it's doing that differently as an organization that recognizes that the social profits need to be at the table, that we need to not only work with the mayor and council, but that we need to work together with all of those, including all the suppliers and providers to services.
The community itself has really grown and is so different than everyone imagines. It has beautiful resources, a fantastic outdoor community and events that can take place to the river at your doorstep and has fantastic recreational facilities that have been able to be built up and multigenerational people that live there. There's a lot of folks that have moved here from other parts of Canada, love it, wouldn't want to go anywhere else. And in some cases, I've talked to some folks that are third generation, even workers within oil sands, so there's a lot of pride in what's been built locally. People love to, with the college, and all of what is brought there for its size, it has an unbelievable impact on the people that live there and work there.
Leighton: And it sounds like things are going quite well there. But I think a lot of people I mean, take myself, for example, who doesn't live there. You know, you only see Fort McMurray, it seems, in the last few years for the unfortunate catastrophic events that have happened. So, you know, people know about the devastating wildfire back in 2016. Then it was the spring flooding last year, the economic downturn and now, of course, the pandemic. So how is the city coping with everything right now?
Perry: You know, it's one of those things that events like that, the wildfires and the floods, the economic downturn, COVID, just continues to strengthen the foundation of that community because no doubt, is it challenging? Has it resulted in people having to consider where they live at different times? The population had grown significantly for a period of time, and it's not in a period of growth at this point, but it has weathered the storm. These events have strengthened the community and they're looking and adjusting to what it takes to succeed in the long haul.
For example, there is the administration for the regional municipality is rebuilding their municipal development plan and looking at, so what's a realistic plan? How do we do this well? How do we take into account emergency preparedness and have learned from what's gone on in the past? Because it's one thing to go through them. But are you a survivor or do you thrive? And how do you learn to thrive from those significant events? Even with the pandemic, when you look at the COVID case counts across oil sands and even in this community, it has been managed extremely well, and it is generally lower than anything you'd see across the rest of Alberta. I think that speaks well to the way that the community and the oil sands companies have worked together to manage those. It's also one where during COVID, as much as possible, they've allowed people to work from home and work differently.
Oil sands workers have been labelled as an essential workforce. But that doesn't mean everyone is a critical part of that workforce. So, what you're seeing, too, is that we're running between 50 or 60 per cent of the people that would normally have been onsite. We're down to about 50, 60 per cent of that workforce in order to minimize exposure. So, people are looking at how they can work differently and do this in a different way as they are everywhere else in the world. It's one of those dynamic moving pieces that this community is rising to the challenge on.
Leighton: And has, I believe OSCA's played a role in that, in working with companies to prevent the spread? Is that correct?
Perry: Absolutely. And part of that is in developing common approaches and protocols. And how do you learn from each other to build a set of protocols and then working with Alberta Health. Alberta Health obviously has been extremely busy with their staff and everything they've had to deal with. So how do you help them?
One way is to allow them to not have to talk to each company. So OSCA's been a bit of the go-between there, collecting, being a common voice. The health task group that has all people from each of the companies as members meets weekly to talk about different COVID issues. And that has been more recently around, how did the restrictions work? How do they get applied to the workforce here, to the project accommodations to the residences that are at some of the sites and now we're talking too, okay, so what's, AHS has actually come to industry and asked if they could participate and help in the vaccine program.
And an example there is that in the past, the medical professional staff that are on site at each of the facilities have helped in flu vaccine campaigns and do every year. So that discussion is taking place. It's not about prioritizing oil sands over anyone else in the community. It's about how do we help Alberta Health be as efficient as possible with the resources they have? And we're looking forward to doing that.
Leighton: We’re talking about a lot of the stuff OSCA does, and it doesn't end there. Indigenous relations is also considered one of your core priority areas, which I want to talk about. And I saw some data from our organization, CAPP recently, highlighting how the oil and supply chain includes $2.4 billion in procurement from Indigenous companies. So, can you talk a little bit about that and what that looks like in terms of some of the success in terms of what those numbers are?
Perry: You know, this is one of these that we touched on earlier that each company actually does a really good job and an outstanding job actually at approving the employment training and business opportunities for the Indigenous communities. And where do you see that? That shows up in those numbers that have been gathered and summarized. And those numbers have grown despite an overall shrinking and reduction in the overall spending in oil sands. If you look at capital spending is down significantly from a peak five, six years ago. The maintenance of its existing operations, of the existing operations has been down to improve competitiveness.
If we don't compete, we won't be around in the long-term. So even though those spending dollars are down significantly, the amount of spending that has been directed towards Indigenous communities, joint ventures, individuals, band-owned companies, those numbers have all been heading up. And that's been about helping to understand what they need. That community knows best, what they need. And each of the companies has been working with them. And now we also have a role to play as OSCA to help look at the next things to unlock on this journey of improving relations with the Indigenous communities and the business development opportunities that exist. The next wait to unlock that further is by working together between the member companies and the producers to find ways to do that differently.
Leighton: You mentioned the concept of competitiveness, and I know it's something OSCA really worked on last year and then is obviously continuing to work on that this year. Can you tell me a bit about that?
Perry: Sure can. There was a significant win in 2019 with lower property taxes in the area. Property taxes happen to be one of the significant cost drivers to the oil sands business and there was a significant improvement in property taxes that occurred in the budget for 2020, and that was a collaborative process between the Government of Alberta, the regional municipality and the oil companies and all of their staff to try and figure out and unlock how to do that. This year, property taxes are going to stay roughly the same as they were last year. But we're back, we'll be looking at how can we unlock further reductions for 2022, which will be discussions later on this year. Why is that important to compete? The companies have done a great job at improving their operating costs. There's been in some cases on the SAGD side, 30 plus per cent improvement in their operating costs over a five- or six-year window. So, things like the property taxes need to improve along the way with that as well to help, because it's interesting with competing with around the globe. And the, you know, I just mentioned the level of improvement the industry has had on their operating costs. What's happening at the same time around the globe is that whether you're in Asia, the Middle East, North America and the U.S., Alaska and other places, they, too, are all improving their cost structure and the bar's moving. So, to compete means that we even when we improve, we need to improve more than others to improve where we compete.
Leighton: I see. Now, I just wanted to, we talked about a lot of what OSCA is doing and a little bit about what you're doing this year as we move forward. But is there anything else worth mentioning in terms of some upcoming initiatives the organization is working on?
Perry: Well, our areas of focus are community well-being, infrastructure, the workforce and Indigenous relations, and that's the long-term focus areas. And what are we going to try to do to improve those? It'll be innovative collaboration, continue to build strong relationships, continue to measure so we can improve in each of those areas.
And right now, we're going to work with the various groups to understand what the municipal development plan is look like, where the infrastructure needs for industry and the community for the long-term, and on the Indigenous side, employment training, business development. There's been excellent progress in that space by various companies and how can we unlock and do that differently together?
By comparison there, for people to look at is that if you look at safety performance over the years in the industry, it has continued to improve year over year, and that's just sending people home safe every day has been of the utmost importance. And one of the ways that has been unlocked is to make sure that as companies work together to help define what are the, what's the certification required, how should work to be done and to do that differently so that people that are working in the area don't need to look at the blue companies working differently than the right company, that they all work roughly the same way. So, it's about doing a bit of that in the same kind of approach that's been successful in safety. How do you then apply that to the Indigenous business development side in employment and training? So be looking to work together differently than has been done in the past in order to make even further improvements in that space.
Leighton: OK, well, lots going on, it sounds like OSCA's doing a lot of great work for the region and for the industry, so thanks for sharing all of this with us today, Perry. Thanks for being on the show.
Perry: Appreciate the time. And love to hear any feedback from folks along the way.
Leighton: OK, great, well, that was our conversation with Perry Berkenpas, executive director for OSCA. Stay tuned for our next Energy Examined podcast. And if you like this episode, please share it with a friend and make sure you subscribe on whatever podcast network you use. For more stories and interviews on Canada's energy industry, check out our website context.capp.ca. See you next time.