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Energy industry looks to boost Fort McMurray's highway capacity

Protesters hold signs at a rally in Fort McMurray, Alta. Saturday, May 5, 2012. Organizers say almost 2,000 people rallied to push the Alberta government to quickly finish twinning a dangerous highway that was the scene of a horrific crash. Seven people died in the crash on Highway 63, the main route between Edmonton and the oilsands capital of Fort McMurray.

Carl Longe/The Canadian Press/Carl Longe/The Canadian Press

Canada's energy industry is examining ways it can build new lanes on a critical stretch of highway that connects the oil sands with the rest of Alberta.

The industry interest in twinning a section of Highway 63 comes as more than 1,500 people in Fort McMurray rallied on Saturday to call for faster investment in a roadway where seven people died in a head-on collision April 27.

In the past five years, 46 people have died on Highway 63, which run from north of Edmonton to Fort McMurray and continues up past the sites of massive oil-sands mines. The late April accident has crystallized a movement in northern Alberta to have the highway's lengthy two-lane stretches twinned, and some have called on industry to help.

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But companies operating north of Fort McMurray have already begun sketching a plan to use industry dollars to upgrade the road. The section of Highway 63 north of Fort McMurray connects workers with many of the largest oil-sands sites. It often has major traffic jams, and has produced serious accidents. It carries roughly four times as many vehicles a day as the road south of Fort McMurray.

But only the first 17 kilometres have been twinned, and the remainder is a lesser priority for a government focused on the southern route, where some sections have seen a near tripling in daily vehicle numbers in the past decade.

So three months ago, the Oil Sands Developers Group began talking with Alberta officials about twinning more of the northern section, a project that would cost, by one very early estimate, $60-million. (The province has pegged the cost of twinning the 240 kilometres south of Fort McMurray at $1-billion; 16 kilometres are done, with another 36 scheduled for completion next fall.)

Companies hope to do that work, on the northerly parts, "on an accelerated basis, getting it done faster because the growth pressures are still there, and they're going to increase even more based on projects coming down the pipe," said Ken Chapman, executive director of the developers group.

The group counts 30 corporate members, including some of the most important in the country, like Suncor, Imperial Oil, BP, Shell and Syncrude. They have access to vast amounts of capital – this year alone, companies expect to spend $20-billion in the oil sands. And they have a motivation to boost standards on roads that transport their workers. Transportation safety is an important enough priority that most oil-sands companies fly big chunks of their workforce directly to private airstrips, in part to avoid congested highways.

But large numbers of people still travel by road, and industry is contemplating a series of ways to finance upgrades. Discussions are still at a very early stage – indeed, it's possible they will amount to nothing. But "there's lots of models around the world to do these kinds of things," Mr. Chapman said.

Companies could pay to build the road, then recoup the cost in the form of reduced royalties. Or they could finance construction and get paid back by the province, or even get money back by building a toll road – the latter being the least desirable option, Mr. Chapman said.

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The province, asked about industry participation, said "all options would have to be considered." But Donna Babchishin, a spokesperson for the ministry of transportation, pointed out that "there are many factors affecting the construction of the road, and industry involvement may not have an impact on the timing aspect."

What's clear is that while industry is interested in speeding things up, it doesn't intend to act out of charity. The oil sands alone are expected to contribute $5.6-billion in royalties to the province this year.

But companies are also lobbying the province to take a different approach to twinning the southern stretches, saying it might make sense to add more passing lanes and truck pullouts rather than simply building more lanes a section at a time. Road-builders, however, say that approach would result in duplicate work when the entire highway is twinned, and would be more expensive in the end. In addition, the province points out that 40 per cent of the accidents on the highway are caused by animals, not drivers eager to pass massive industrial loads.

But those lobbying for better roads say smaller, quicker upgrades are a smarter approach.

"We definitely need some strategic twinning," said Ashley St. Croix, one of the organizers of the Saturday rally. The deaths of seven people – including a pregnant woman – have galvanized the community to push for urgent solutions, she said.

"Enough is enough," she said. That highway "is our lifeline. And we want to make sure that it's safe to travel on."

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