SUNDRE – Extracting the raw resources that are abundant in Canada and rushing them to the market is a short-sighted approach that has left the country’s economy disproportionately dependent on the U.S., says a Sundre resident and retired oil and gas industry professional.
Anton Walker, a chemical engineer by trade whose career in the industry spanned more than five decades, pitched his ideas earlier in May during a presentation at the Sundre Municipal Library that was attended by a few people.
The situation with the threat of trade tariffs from the Trump administration has emphasized the extent to which our country’s economy hinges on the U.S., Walker said, adding Canadian leaders from all echelons in governments have echoed the need to diversify.
“Which is something we should have thought of before, but it was just too easy,” he said. “We were really complacent in many ways.”
Walker asserts Canada must start thinking beyond the way we look at our resources.
“We have so much land and so many resources,” he said.
“We got into a kind of colonial mindset, in that we get our resources out of the ground, get it out of the country as fast as we can and that is it,” he elaborated.
One way to increase productivity and by extension boosting the economy is to increase the value of what the country produces, he said, adding rushing raw resources to turn a quick buck on the international market fails to tap into a greater potential.
“Value increases the further you go along the trail to the end user,” he said, adding there should also be a greater focus on bolstering domestic trade.
Developing raw resources into value-added products for end-users requires a blend of technology as well as human initiative, creativity, knowledge and skill, he said.
“Of course you need investment capital,” he said, adding there must also be a big enough population to internally develop sectors.
He went onto describe clusters as crucial to core sectors, citing examples such as the wine industry that requires companies that produce bottles, others who make corks as well as institutions focused on that industry, or even the auto industry that has several specialized manufacturers who produce all manner of components from seat fabrics to windows and all the myriad parts required to make a vehicle.
“What I’m suggesting here is we need to change our mindset,” he said, referring to the need to look beyond a raw resource and consider the next potential link in the value-added chain.
That involves not only identifying what technologies and human skills are needed to make projects economically viable but also finding ways to “incentivize investors to journey along the value trail,” he said.
Drawing from his own personal experience following a career in the oilsands, he said bitumen for example can be shipped out. However, it first requires some processing due to its thick viscosity.
“The stuff is so gooey you can’t pump it; you need to dilute it with a lighter material,” he said.
There were a couple of plants built in Fort McMurray that enabled the ability to upgrade bitumen to synthetic oil that can be processed in any refinery, as most refineries are designed specifically for conventional crude, he said, adding additional equipment is needed to break up the big molecules that cannot be pumped into something closer to the end use.
“(But) after the first two refineries, we started realizing that we don’t have to do this breaking up; we just dilute it and pump it down to the States, largely,” he said.
“Refineries there already had the equipment to do this breaking up.”
As a result, that reduced investments in the Canadian industry. And while many people are calling to get more pipelines into the ground to transport bitumen to the coast and ship it out, he said, “You’re still limited by what refineries could process the stuff.
“The other option is this: you go to the coast with the stuff, but you upgrade refineries at the coast,” he said, adding the objective is to tailor the product so it can fit refineries anywhere else in the world and then ship it out by tanker to international markets.
“The whole point is to start thinking about the value trail and making higher-value products and at the same time, increasing the number of markets you can go to.”
Another example he cited was drawn from the agricultural sector.
“We’re the biggest exporter of mustard seed in the world,” he said, adding Canada barely has a few relatively small companies that actually make mustard, which we end up importing back at a premium.
That’s what he considers a short-sighted mindset that seeks simply to extract and exploit resources without further thought to how they might be developed to increase value while boosting the economy along the way.
The government could play a role by fostering opportunities to bring in people from different sectors as well as post-secondary institutions to identify overlaps where industries and businesses could potentially become clusters that create opportunities for companies that complement one another, he said.
This of course requires a long-term vision and patience; itself a challenge when so many people seem to just want a quick silver bullet magic solution, he said
“We got to some of these places because of short-term thinking and quick solutions and not looking down the road,” he said, adding the famous adage coined by Albert Einstein that, “You cannot solve a problem with the same mind that created it.”
