If the planned North West upgrader in Sturgeon County is built this year, it will quickly become the county's largest taxpayer.
It will provide thousands of jobs during construction and hundreds once the plant begins processing heavy bitumen into diesel.
Despite the economic impact the project will have, there was a time when it was going to be the smallest of several proposed upgraders in Sturgeon County. Earlier this decade, there were as many as four projects proposed for Sturgeon's industrial heartland with several more across the river in Strathcona County.
Neil Shelly, executive director of the Alberta Industrial Heartland Association, said the ambitious plans for the area fell victim to the boom, with costs soaring upward and out of reach.
"I think companies were scared away by the high inflationary costs we have here in Alberta."
He said a lot of upgrading and refining work has moved to the American Gulf Coast, where costs aren't as high, as well as other factors Alberta can't match.
"It is cheaper to build down there, [and] they have access to ocean ports which lets them trade and sell their products much more actively."
Shelly said 20 years ago the government could have decided to make upgrading a component of the original leases with energy companies, but said now it is hard for the government to do anything to encourage the investment.
"As much as we would like upgrading to be done here you have to respect businesses and the rule of law."
Shelly favours the bitumen royalty in kind (BRIK) program the government has implemented with North West. Under that deal, bitumen the province collects in lieu of royalties will be diverted to North West to upgrade to diesel fuel.
The province will pay North West a fee for upgrading the bitumen, but it will come out of the province's share of profits from sale of the diesel fuel.
"They are not giving the material away. What they are doing is they are saying we will pay North West or potentially some other company in the future to transform this into diesel."
Shelly also said with the province becoming so reliant on oilsands royalties, the project makes sense for economic reasons as well.
"You don't see any major company betting their whole company on one product line alone — they like to diversify out."
Andrew Leach, an associate professor at the University of Alberta's business school, agrees with Shelly that it was ultimately world markets that killed the most recent upgrader boom.
He said both the BRIK program and proposals to put lower royalty rates on bitumen upgraded in Alberta represent the government sacrificing some funds to achieve other goals.
"If you are an Alberta taxpayer would you want the Alberta government to build a refinery here that costs twice as much, but employs Albertans or would you want them to build a refinery somewhere else, where you capture a much higher rate of return."
He said the bitumen Alberta collects is the province's property and Albertans should think long and hard about what they want them doing with it.
"You own the oil as an Alberta taxpayer. All Albertans should look at that the same way they would any other government asset or money."
Candidates weigh in
North West's project, just south of Redwater, is smack in the middle of the Athabasca-Sturgeon-Redwater riding.
PC candidate Jeff Johnson said the government does want more upgrading in Alberta and believes in using BRIK to achieve that goal.
"We have an energy strategy and we want to see more value-added in the province and the BRIK has been the key policy lever to do that."
Johnson said any royalty break or incentive to upgrade in Alberta would cost the government money.
"If you are going to throw out incentives, if you are going to throw out royalty breaks, that costs Alberta money."
He said the program achieves more upgrading without putting tax dollars on the line.
"It doesn't cost anything there. In my mind there is no risk there."
Wildrose candidate Travis Olson disagrees and says there is a significant risk to Albertans. He said the government should not be getting into areas where private businesses operate.
"We can get upgrading capacity without the provincial government stepping in and deciding who is going to win and who is going to lose."
He said the way to get upgrading in Alberta is to create a good tax structure and keep royalties stable and predictable.
"We can have the same results; we can get more upgrading capacity and more refining capacity by maintaining a competitive tax structure."
NDP candidate Mandy Melynk said her party favours a royalty structure that would place lower royalties on companies that promise to upgrade here.
She said bitumen is Alberta's resource and Albertans should benefit.
"We need a backbone. I think Albertans want a backbone. Everyone I have talked to right or left of the spectrum has agreed with this approach."
She said the government has been too willing to have Albertans believe energy companies will go elsewhere.
"I think this idea that companies are just going to walk away is fear mongering from the people who are buying the elections."
Carbon capture
The Wildrose favour cancelling the government's carbon capture and storage program. North West is involved in the program with plans for the company to sequester carbon underground using a project called the Alberta Carbon Trunk Line.
Olson called the project one of the worst ideas the government has come up with. He said badly needed infrastructure projects, like the twinning of Highway 63, are losing out to this program.
"They are going to take $2 billion that could have gone into that project and they are going to bury it underground."
Johnson said the Wildrose's opposition to the government's investment in carbon capture is missing the larger point, which is that carbon captured underground will lead to more oil and more royalties.
"I think a lot of their policies are short-sighted and I think this is just one of them," he said. "It would in my mind kill the North West project and it is going to stop investment in that piece of the business."
Melnyk said her party favours only cancelling the remaining $400 million in the Carbon Capture fund, which has not been spent or committed. This would not impact the carbon trunk line. Conversely, the Wildrose show savings of $2 billion in their platform from cancelling the carbon capture fund.
Alberta Liberal candidate Gino Akbari was contacted but had no comments on the issue.
Election day is April 23 and advance polls will be open on Thursday, Friday and Saturday this week. For advance poll locations, please see the advertisement in today's Gazette.
