Who’s your daddy now, Atlantica?
The view from the catwalk encircling the tallest spire in Irving Oil’s Saint John refinery is not for the faint of heart. But if you can stay on your feet, you might just glimpse what Atlantica’s dominant energy conglomerate calls the future. Reaching to the farthest shores of the port city is a giant’s meccano set spitting fire and steam. To the southeast, beyond the U.S. border, is a marketplace of 100 million consumers. Between the two is a 75-year-old, family-owned enterprise that sees the world through the spyglass of its own, vast ambition.
Three months ago, Irving Oil announced that it intends to double its refining capacity, triple its workforce and inject more money into the local economy than Panama will spend to rebuild its entire network of international canals. As Kevin Scott, the company’s Director of Refining Growth, recently told me, “We’re talking on the order of five or seven billion dollars over the next few years. We see a very great number of positives stemming from this. There will be a huge number of good, new jobs. There will be new possibilities for income and business growth. . .Yes, it is a very big deal.”
In fact, once the environmental and economic impact assessments have been filed and approved in the next couple of years, it will almost certainly be the largest, privately funded capital project in Canadian East Coast history. The numbers, like the opportunities for long-term development, are simply staggering. By early next decade, the initial investment is expected to generate an additional $13-17 billion in direct commercial benefits for New Brunswick, including thousands of new jobs, hundreds of new business start-ups, locations and expansions, and a construction boom the likes of which Saint John and environs have never seen.
In other words, what’s not to like about a mega-project that will put a chicken in every pot, unseat Fort McMurray as the nation’s defacto capital of petrochemical production, and help transform Atlantica into a coherent, successful, international business corridor?
I’m glad you asked.
Irving Oil is unquestionably the most technologically advanced, market wise, and financially robust refining operation in North America. It produces 300,000 barrels a day and accounts for three-quarters of Canada’s entire export load of gasoline to the United States. By the end of 2008, it will own and manage the newest Liquified Natural Gas terminal on the northeastern seaboard, from which it will pump more than one billion cubic feet of the stuff each and every day to waiting customers around the continent.
The problem, of course, is that even industrial giants have their bad days. And when they do, those who depend on their success suffer in direct proportion to their failure. Not long ago, Irving-owned Saint John Shipbuilding was the big, blue sapphire in the crown of Maritime business achievement. It built military supply vessels and frigates no one else could, with technologies and skills no one else knew existed. For 15 years it thrived, and then, suddenly, it didn’t – a victim of national politics, and the absurdly Canadian habit of cutting the legs out from under the fleetest among us.
The Irving organization recovered by transforming its state-of-the-art facility into a value-added wallboard factory thanks partly to a $50-million payout from the federal government, its largest customer. Meanwhile, hundreds of displaced shipyard workers survived either by taking company severance and early retirement packages, or heading west to ply their particular trades in Alberta’s tar sands.
To be fair, Irving Oil is not Irving Shipbuilding. In fact, the two companies are operated by entirely different branches of the family. But the issue is not about management styles or happenstance; it’s about scale. To flourish, Atlantica needs a degree of industrial diversity sufficient to hedge against the setbacks that unavoidably beset even the best and boldest of entrepreneurial endeavours. Specifically, it needs a wide variety of high technology clusters, precision manufacturing start-ups, access to healthy pools of equity capital, expanded transportation infrastructure, and a new generation of nimble, export-oriented small- and medium-sized businesses.
Irving Oil’s astonishing growth track is very good news for the cross-border region, but only if it catalyzes a new spirit of economic development up and down the Atlantic seaboard. Interestingly, Kevin Scott seems to agree: “This is what our company can offer up in terms of what’s going on in Atlantica. This what we can do, and it may help other people here do what they do better.”
Again, the effort is not for the faint of heart, but it may well proscribe the best shape for the region’s industrial future.
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December 23rd, 2006 at 9:55 pm
Merry Christmas to you and the rest of the Bruce clan. btw, have a couple of McEwan’s on me.
December 24th, 2006 at 12:27 am
A very merry Christmas to you. McEwan’s is excellent, but the home-brew is better. That’s why the kids in hall used to call me “Mr. Brew”.
December 25th, 2006 at 4:38 pm
To flourish, Atlantica needs a degree of industrial diversity sufficient to hedge against the setbacks that unavoidably beset even the best and boldest of entrepreneurial endeavours.
I completely agree. Our region, and in particular New Brunswick, has to seek more freedoms both economically and socially. At the moment, the socialistic order of our government entrenced society has led to the increase of monopoly power and the weakening of competition. If there is one word that should define New Brunswick in the current 21st cwentury as well as the future, it should be “competition”. The more we have of it, the better off our society will be both economically and socially IMHO.
December 27th, 2006 at 6:40 pm
IMHO (in my humble/honest opinion) is an acronym often used in email, posting, and chat directly before or after an opinion that may be honest but is rarely humble
As usual, though, you are right on point. . .IMHO, of course.
December 27th, 2006 at 10:35 pm
Yeah, I really gotta work on that humble part. Maybe a New Years resolution.
It is the only way to go IMHO.