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In the rolling farmland around Derwent, Alta., the fields are littered with what look like oversized pop cans. These stubby storage tanks contain heavy oil that has been pumped from the ground and is waiting to be trucked away – much of it to the big Husky Oil upgrader in Lloydminster.
The tanks are not a pretty sight – they lack even the stark imagery of the classic oil well – but they are money in the bank for the farmers who till this undulating Alberta ground.
For a farmer, the extra few thousand dollars a year from a single well might buy a piece of equipment, some groceries, or maybe pay off a bit of the debt from a hard life on the land.
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“It all goes back into the farm,” says Peter Harasiuk, 71, who collects about $20,000 a year from eight small oil leases to backstop a beef operation that has been depressed by years of low prices and the fallout from the BSE scare.
Even now, as high wheat prices buoy the fortunes of some of their neighbours, he and his son stagger under rising feed costs and steep, volatile energy prices. The small transfusion of oil money is no panacea for the family, which has farmed this same land since 1912 when Mr. Harasiuk's father fled Ukraine. “The livestock sector is in very big trouble,” he says.
Derwent, about two hours east of Edmonton, is where the two Albertas forcefully collide. The energy wealth flowing from the Athabasca oil sands, as well as from other unconventional sources such as Derwent's heavy oil, meets a farm economy that is not sharing in the province's massive accumulation of capital and income.
“There is a great standard of living in Alberta and tremendous wealth but that doesn't mean everyone's wealthy,” says Tim Harvie, a landowner and grain farmer from Cochrane, just west of Calgary, and a member of one of the province's most prominent ranching families. “Times are good but not for everyone.”
Or as Bernie Lesage, the owner of a small factory in Calgary, puts it, “We don't participate in the oil sands – all we do is pay the costs.”
These tensions reflect an Alberta that is far more diverse economically and politically than the image Eastern Canadians hold of a monolithically wealthy province. There are, in fact, increasingly deep divisions between urban and rural, north and south, environmentalists and growth advocates, and, as always, Calgary and Edmonton.
“What concerns me is the growing polarization between rural and urban Alberta, between landowners and energy companies,” says D'Arcy Levesque, vice-president of public and governmental affairs for pipeline giant Enbridge Inc.
Even the energy industry is, in fact, two industries – the roaring industrial machine of the oil sands, with its massive capital spending, and a sputtering conventional industry, particularly in natural gas, now an eroding pillar of Alberta's prosperity. Drilling and exploration companies are laying off many of the people they picked up in the boom of the past decade.
“Right now, if your livelihood is dependent on oil drilling, you're left behind,” says Todd Hirsch, the Calgary-based senior economist for ATB Financial.
In Derwent, farmers complain about oil trucks tearing up their roads and fields, but everyone would love a well or two on their property just to make ends meet. Still, this income is a pittance compared with the spectacular nouveau wealth evident in Calgary, or in its recreational outposts such as Canmore, Alta., and Palm Springs, Calif.
In fact, the Alberta boom follows a narrow jagged line that starts around Invermere, B.C., a lakeside mountain retreat full of retired and semi-retired Alberta oil people, then pushes east to Calgary, the head-office base of the energy industry, and up the bustling Highway 2 corridor to Red Deer, a petrochemical hot spot.
The line touches Nisku, the massive industrial park south of Edmonton that generates much of the equipment and technology for the oil sands. It snakes northward through Edmonton, the government and refinery centre, before heading up the perilous highway to overheated Fort McMurray, the production home of the oil sands.
When you stray off that line, the economic picture becomes more mixed. There are prosperous pockets, such as Grand Prairie and Lloydminster, but many rural communities have been marginalized by high costs and tight labour markets, as farm and service workers head off to better-paying jobs in Edmonton, Calgary or Fort McMurray.
Drive around Derwent and, despite the oil tanks, there are more symbols of decline than triumph. The population of 110 people has been stagnant for years. Many homes in the area are shabbier than in the past, because the new energy-based work force is so transient. Where once there were four grain elevators, now there are none. The local school has closed and is now occupied by a window-blind factory.
