A veritable oil gusher is about to overwhelm Canadian manufacturers.
Alberta's oilsands, with projected investments of $100 billion through the year 2020, are expected to lead to significant economic benefits across the country.
To take advantage of these opportunities and to ease the burden on Alberta businesses, a new web portal is being launched to bring together oilsands companies and manufacturers to solve the challenges created by huge investments and rapid growth in the energy sector.
The Innovative Canadian Oil Sands Manufacturing Opportunities, or iCOSMO, is slated to have its official unveiling at the end of July, even though the website is already up and running.
"The site is functional for oilsands companies to list their opportunities or seek new manufacturers," says David McKeen, iCOSMO business manager.
"We have received a tremendous amount of interest from both Canadian manufacturers and oilsands companies. The oilsands companies that we have met with have indicated that this is a required tool to help them control, refine and manage the incoming requests."
The end of July target date is intended to allow companies more time to input their information into the site.
Canadian Manufacturers & Exporters (CME), whose membership accounts for an estimated 75 per cent of total Canadian manufacturing production and 90 per cent of Canada's exports, is the main backer of the project. Joining CME on the undertaking are Industry Canada and the governments of Alberta and Ontario.
According to a 2005 study by the Canadian Energy Research Institute (CERI), oilsands projects could mean a boon of a $102-billion increase in gross domestic product (GDP) for Ontario by 2020, $8 billion for Quebec and $45 billion for Canada's other provinces and territories - while there would be a $634-billion increase in Alberta's own GDP.
However, the CERI report, called Economic Impacts of Alberta's Oil Sands, was based on "a moderate price forecast for synthetic crude oil of $32 US per barrel, as well as resource constraints that cause production shortfalls and delays in announced schedules."
Oil prices topped $78 US a barrel last week over concerns about Middle East instability.
Translated into jobs, the CERI study says that those figures - based on the average price of $32 per barrel between 2000 and 2020 - mean the oilsands would generate almost as much employment outside of Alberta as within.
"We need to raise the level of awareness across Canada," says Jayson Myers, CME's chief economist.
"On any workday in Canada there are a number of seminars under way about doing business in China, India or Vietnam - yet we don't pay much attention to doing business in Alberta.
"To put it in perspective, it would take 80 years of exporting to China to realize the same business opportunities for Canadian manufacturers that the Alberta oilsands represent to them over the next 10 years."
Myers adds, "you'd be surprised, even in Saskatchewan and B.C., a lot of companies are not aware of the scale of the opportunities."
It's precisely because so few companies in the rest of the country know so little about these chances that this new website is so important, says Justin Riemer, executive director of the investment and industry development branch of Alberta Economic Development.
"It's surprising to see how many people had only a superficial understanding of the magnitude and ways their business could benefit. Some see it (the oilsands) as an Alberta-only development," says Riemer.
Referring to a trip to Ontario and Quebec last month to promote the new program, he notes: "Many of them were interested in pursuing opportunities in this area and looking for companies so they could follow up."
Chester Nagy would likely welcome some of that help. The president of Calgary-based Plains Fabrication and Supply, a division of Plains Oil Ltd., says his company has been at full production levels for the last 18 months, supplying pressure vessels and process equipment for oilsands developments.
"If could do more work, I would have more work, I believe so," says Nagy, whose company employs 150 people. "I have to turn down work. Expansion is virtually impossible ... there's just nobody to hire."
Nagy, who took part in the trip, also found that a lot of people didn't realize the scope of the work that is available.
But he says rather than having companies calling him, or people lining up outside his door, the best option would be to use the iCOSMO site.
"With iCOSMO, the idea is for me to register and put the type of work I'm looking to distribute out. That helps to narrow it down and then we can continue with the relationship," says Nagy.
The oilsands companies, or businesses working for them, will be able to post their opportunities free of charge. Canadian manufacturers would need to register and pay a yearly fee of $1,200.
As CME is a not-for-profit organization, it will use the membership fees to cover the costs associated with the portal, including staffing.
"The cost of membership is far less expensive then cold-call business trips and our initial indicators show it to be far more effective," says McKeen.
Nagy agrees, adding that iCOSMO is definitely a step in the right direction as it moves to tap into eastern manufacturing capacity.
Alberta right now is too hot, he notes, and he isn't talking about scorching summer temperatures.
That, adds Myers, is why the new portal is important: To bolster the capacity of Alberta companies.
"It's not the point to take away business from Alberta companies but to partner with them to strengthen their capacity," says Myers.
Web Watch: www.icosmo.ca
(Laura Severs can be reached at laura@businessedge.ca)
