Grande Prairie isn’t your typical oil and gas boom town. Yes, the northwestern Alberta city sits atop some of the most sought after and productive oil and gas formations in North America. And yes, located right in the heart of Peace Country—Alberta’s top producing region of conventional oil and natural gas—has naturally made Grande Prairie a hub of energy industry activity for the area.
There is even the population growth that typically accompanies an oil and gas boom. Grande Prairie has nearly doubled its population in the past 20 years to 63,166 people and by adding to its population by 13.5 per cent between 2011 and 2015, the city grew at a faster clip than both the provincial and national averages during that time, 11.6 per cent and 5 per cent, respectively. The population of Alberta’s seventh largest city is both young, with a median age of 30.3 years, as well as a pool of highly skilled and educated workers.
But Grande Prairie is different.
Located about 450-kilometres northwest of Edmonton, Grande Prairie is also supported by other provincial stalwart resource industries, such as forestry and agriculture. New development and construction totals are estimated by the municipal government to total more than $3 billion, including projects for power generation, hospitals, schools, sports and entertainment, and infrastructure. The city estimates its total trading area population to be more than 281,000 people, and Profit magazine anointed Grande Prairie as Canada’s Best Place for Business in 2016.
“There’s a slow-burn growth happening with lots of positives,” says Lionel Robins, who is a partner in a Grande Prairie ownership group that holds seven car dealerships, 11 national car rental franchises, an oilfield trucking company and four regional hotels.
“In our fluid-hauling company, we’re in full-hiring mode right now. Our automotive group is currently about 15 positions short of what we need. Our vehicle rental operation is a couple people short. Our hotel business is a lot busier this winter than last winter—our occupancy rates are up 40 to 50 per cent. So everything seems to be trending,” he says.
“Slow-burn growth” is an ideal scenario for Grande Prairie. Booming oil and gas activity in other parts of Alberta often came with social, housing and infrastructure pressures, but Grande Prairie and its surrounding municipalities are determined to avoid those pitfalls through proactive community outreach and rigorous planning. The TriMunicipal Industrial Development Partnership is an integral part of that work.
In 2016, the Municipal District of Greenview started a conversation with the City of Grande Prairie and County of Grande Prairie, and a new Tri-Municipal Industrial Development Partnership was formed to explore the development of a world-class heavy industrial park in the MD of Greenview, about 40 kilometres south of Grande Prairie.
In considering how to better manage industrial development, the MD of Greenview arrived at the concept of an industrial park, conducted a viability study and got the ball rolling.
“Rather than speaking with 5,500 voices, which is our MD’s census population, working with our close neighbours allows us to speak with 110,000 voices,” says Kevin Keller, economic development officer for the MD of Greenview.
In June 2017, the partnership funded the initial stages of the agreement with $210,000 to actively encourage development, prepare and execute agreements, hire a project manager to define and initiate the project, and cover other start-up costs.
Taking a cue from Alberta’s Industrial Heartland—an area just northeast of Edmonton created to attract chemical, petrochemical, power and hydrocarbon processing—which went from concept to first shovel in six years, Keller expects the Tri-Municipal Industrial Park to be shovel ready within four years. The advantage to industrial proponents building in the park is a two-year leg up on permitting, compared to building outside the industrial zone.
“We’ll have done a lot of that work for them. So, the companies then just have to do the specific permits for their specific plants,” Keller says.
While the partnership is hoping to take advantage of its unique proximity to oil and gas development, it also envisions a unique industrial park.
This coordinated approach to investment attraction and infrastructure development will help us be competitive on a global stage.”
– Leanne Beaupre, Reeve of the County of Grande Prairie
To attract global investment, the Tri-Municipal Industrial Development Partnership foresees an area with pipelines, roads and railroads that covers 355 square kilometres—an area that could fit more than 200 professional-sized hockey rinks. While the size alone makes it a little unconventional by industrial park standards, MD of Greenview Reeve Dale Gervais says the density of the proposed development will also be unique.
“What we envision is pristine areas interspersed with development. We’ll have wetlands, muskeg or other sensitive areas next to industrial facilities built on higher land, all connected by a utility corridor,” Gervais says.
In other words, the landscape will not be smoke stack after smoke stack, cordoned off behind chain-link fences. By putting the “park” back into industrial park, the development hopes to strike a balance between the natural and agrarian appeal the region prides itself on, and the benefits of industrial development while still clustering industry. Both the MD of Greenview and the County of Grande Prairie are seeing growing industrial activity, so rather than allowing it to scatter throughout the region, this initiative aims to reduce the overall impact on the land.
UNIQUE COST-AND-REVENUE SHARING DEVELOPMENT MODEL
Another difference in the creation of the Tri-Municipal Industrial Development Partnership is how it is structured.
The upfront development costs of the proposed park, such as the environmental, regulatory and Indigenous consulting work, is being shared by the three municipalities. The hosting municipality of Greenview is contributing 50 per cent of the costs, while the County of Grande Prairie and the City of Grande Prairie are each contributing 25 per cent.
Those same ratios will be used to distribute revenue among the municipalities from prospective industrial development. This economic development model of cost-and-revenue sharing is uncommon. Typically, even when municipalities work together to promote their region, they end up competing for projects to be built within their municipal boundaries and do not share revenue. The challenge this poses is that sparsely populated rural areas end up collecting high-value property tax while neighbouring municipalities or cities provide essential services such as health care, education and housing without the benefit of tax revenues coming from industrial buildup.
“I think it was a really forward-looking and generous offer from the MD of Greenview to say, ‘We acknowledge that this is a challenge and we want to be sure that everybody can be on board with any new development in this area,’” says Grande Prairie Mayor Bill Given.
The Peace Country region has already attracted global attention from industrial proponents that see opportunity in locating close to a natural resource. The Montney formation in particular—a 700-kilometre long formation that stretches across the Alberta-British Columbia border and is estimated to contain 449 trillion cubic feet of natural gas, 14.5 billion barrels of natural gas liquids and 1.1 billion barrels of oil—rivals the most prolific shale gas plays in North America. Production from the formation grew from 1 billion cubic feet per day (bcf/d) of natural gas production in 2010 to 5 bcf/d in 2017. By 2019, the National Energy Board estimates Montney production will be 7 bcf/d and will make up almost 40 per cent of Western Canada’s production.
It’s not only typical natural gas either. The Montney formation also holds liquids-rich natural gas, which is an oily condensate Alberta’s oil sands industry needs to mix with bitumen, so the heavier and thicker oil can be shipped by pipeline. It’s this demand that helps make the Montney formation economic even when natural gas prices are low. It’s also a versatile hydrocarbon that the petrochemical industry uses as feedstock for the production of plastics, fertilizers, chemicals, fuels and other products.
Producers of those products could find a new home in Peace Country, and based on past interest the Tri-Municipal Industrial Development Partnership anticipates attracting fertilizer plants or plants for refining petroleum products, such as natural gas or diesel. Synergies between industrial proponents could also lead to other opportunities, such as power generation or large-scale livestock yards.
“We’ve had a number of large multinational companies come here and look at opportunities,” says Keller. “But we weren’t necessarily ready to entertain them at the time.”
The industrial park project will require new infrastructure in the region, but some of that is already on the way with the Alberta government’s previous announcement of its intention to twin Highway 40 south of Grande Prairie.
“They just announced $289 million of improvements so most of the infrastructure is already there—or we can put in the local stuff quite quickly,” Gervais says. “They are in the design stage to putting another bridge on the Wapiti River just south of Grande Prairie on Highway 40 and then 10 kilometres of twinning. But we’ll need about 35 kilometres, at a minimum, after that to get our [proposed industrial] area.”
County of Grande Prairie Reeve Leanne Beaupre is also happy with how the partnership has taken shape and what it means for her county.
“This coordinated approach to investment attraction and infrastructure development will help us be competitive on a global stage,” she says. “It’s a collaborative approach that will also reduce competition and provide a framework for cost-and-revenue sharing, so it’s beneficial for all of the parties involved.”