Is Cold Lake going to get its Cash?

The City of Cold Lake is waiting sometimes not so patiently to see if they are going to get some relief from their estimated $150 million dollar operational, infrastructure debt. The Province's Lloyd Snelgrove and crew are looking at all the options to reroute tax revenue from the Air Weapons Range drilling and oil sands operations into the coffers of the City.

For the past several years, these monies have been pouring into the bank account of Lac La Biche county which only a slight geographical connection to the "Range" in that it is next door to the west. While LLB county receives this money it does little if anything, to help service the "Range" with things like roads, hospitals, or people for that matter. The bulk of that load rests with the MD of Bonnyville, the City of Cold Lake and the Town of Bonnyville. There's also involvement by the Canadian Department of National Defence (4 Wing Cold Lake - Air Base) who operates training sessions on the "Range".

The story began many years ago prior to the finding of all that black stuff buried beneath the surface and when the province  chopped up some crown land and turned it into wilderness parks and green spaces. Adjacent counties were offered the spaces to look after and since most of it was spruce and pine trees, some nice lakes and abundant wild life most administrators thought that it would just stay that way and let whoever wanted to do the paper work annex it to their existing land base.

Then, Imperial Oil, the grand pubbah of oil companies started a pilot plant to see if the black stuff could be extracted. It was expensive at the time because the sand had to be extracted from the oil and technology to do so hadn't been invented yet so Imperial parked their pilot plant and waited for science to catch up. (I'm sure they weren't waiting but had their own scientists working on the technology to make it profitable for them and their shareholders).

Fast forward 25 years and Imperial has just pulled their Billionth Barrel (yes, with a B - billion) and they have been joined by all the major oil field players like Husky, CNRL, Cenovus, Devon, Shell and a few smaller players who are all working diligently to harvest the black goo from the sand formations some 800 to 1500 feet underground.

Bonnyville from the Southwest

It must be worth something because each of those companies have invest 100s of Millions in structures, Leases, drilling, hauling and processing equipment and personnel. All those people must live somewhere and they have chosen Bonnyville and Cold Lake to live in with their families. The centres are located to the south and south-east of all this action and in order to get to the sites, roads are required and that's where the MD comes in. They are responsible for most of the roads leading to the plants and lease sites except for the major highways which the province is responsible for. The city of Cold Lake  and the town of Bonnyville are responsible for providing schools, fire halls, hospitals, roadways, recreation and all the infrastructure neccessary to support the people who work at these oil facilities.

Unfortunately, local taxes aren't often sufficient to pay for all this so when an alternate revenue source appears on the northern horizon its only natural to lay claim to some of the tax revenue that issues from that resource.  There in lies the dilemma.

While the MD receives a pretty tidy sum of the revenue from oil related activity outside of the range and they share some of it with the communities within the MD boundaries there still doesn't seem to be enough to go around. Meanwhile the tax revenue from the "Range" goes to Lac La Biche county which provides no support to this area.

When the Province redirects that money from Lac La Biche County they'll have to find a solution to replace that money and it will likely stir up another storm because there is oil development between Lac La Biche and Fort McMurray it's northern neighbor.  The revenue from that area currently flows to Ft. Mac and the regional Municipality of Wood Buffalo who has all the tax revenue from the huge plants that exist north of that community. With reserves as large or larger than Saudi Arabia I'm thinking there's more than enough to go around.

I'm hearing this morning that an agreement is about to be signed next week to redistribute this revenue by next Tuesday. I can only hope that when the dust settles everyone has what they deem is their fair share.  Stay tuned folks this ain't over yet.

Editor's note: The opinions and story line are mine alone and represent an amalgam of information gleaned from discussions, readings and information available at the time of publication.  Enjoy.