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Oilsands boom overwhelming Fort McMurray: mayor

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Date: Monday Jul. 10, 2006 11:37 PM ET

FORT McMURRAY, Alta. — Melissa Blake is quite possibly the only leader in Canada who says there may be too much growth in her community.

Blake, the mayor of the Wood Buffalo municipality at the heart of Alberta's exploding oilsands development, said Monday the provincial government and the energy industry must start paying to mitigate the impact in the Fort McMurray area or consider putting on the brakes.

"They need to have a broader perspective when they're going into their deliberations in support or non-support of particular projects,'' she said.

Monday was the first chance for lawyers representing Wood Buffalo to appear before a regulatory board that will rule on the latest proposal for Alberta's lucrative oilsands -- Suncor's (TSX:SU) $7-billion Voyageur project. But even as they made their arguments, Blake said in an interview that Fort McMurray is already "financially unsustainable.''

The population has more than doubled to nearly 75,000 in nine years, and the prospect of another $100 billion in oilsands development over the next decade means the city just can't keep up.

"To ask us to take on $400-$500 million more in financial projects with our revenues -- I couldn't even tell you how many times over we'd have to increase the taxes,'' Blake said.

Wood Buffalo's submission to the Alberta Energy and Utilities Board said Voyageur would only add oil to the fire.

"Despite acknowledging that proceeding with the project as proposed will contribute to the existing problems, Suncor does not offer any adequate or tangible solutions ... The applicant must be part of the solution to the socio-economic problems created or exacerbated by the project.''

The submission points out that "Fort Mac'' already has a shortfall of nearly 3,000 homes, 17 police officers and two public schools. Its assault rate is nearly twice the provincial average; its drug offences are triple.

Population continues to grow at about 10 per cent a year. A five-minute drive up Franklin Avenue yielded licence plates from eight provinces.

The city needs a new water treatment plant, police station, recreation centre and fire hall. One report estimates the area will need $1.2 billion in infrastructure to accommodate growth -- costs that continually inflate because of the overheated economy that makes them necessary in the first place.

Blake said time is growing short for someone to step up to the plate with a solution.

"If it takes three weeks (the length of the hearings), that's great. If it takes three months, that's OK too. What it can't take is three years.''

Extra funding from industry may have to be part of the answer, she suggested.

"I think that there is probably an element of that that may come into it.''

The pace of oilsands development is also speeding ahead of the province's ability to compensate for the environmental destruction it causes, said Chris Severson-Baker of the Pembina Institute, which also appeared before the hearing Monday.

Land is being chewed up by oilsands mining faster than it can be reclaimed or compensated for by the creation of protected areas, he said.

"The pace of development is something that has to be put on the table,'' he said.

"Even if there is ... enhanced reclamation going on, there's a point at which the boreal forest can't tolerate that amount of impact that quickly.''

Although reclamation is ongoing, Severson-Baker points out that after 30 years of oilsands mining, no land has been declared fully restored.

"There's been no evidence of a company being able to restore boreal forest after it's been mined.''

The municipality and the institute are only two of the recent voices calling for oilsands development to be slowed.

The area's health region has made similar requests, as have local aboriginal groups. Last week, former premier and Alberta icon Peter Lougheed joined the call.

But Suncor spokeswoman Darcie Park said delaying or stopping oilsands projects won't necessarily solve the problems.

"There will be fewer taxes and royalties available for the funding of vital infrastructure,'' she said. "It would be harder for companies to invest in environmental innovations and technologies.''

Park said Suncor is cautious about demands that it directly fund municipal infrastructure, even if it's partly their employees causing the increased demand.

"Industry should do what industry does best, which is to work to responsibly develop the resource,'' she said. "Governments should do what they do best, which is to identify needs for public funding and provide the funding.''

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