Canada: Let's Get Moving In The Oil Sands: Infrastucture In Northern Alberta

1. Overview

Billions of dollars in oil sands investment will result in hydrocarbon production in northern Alberta rising by an estimated 2.5 million bpd by 20201, and by as much as 6.0 million bpd in the Athabasca Oil Sands Area (AOSA) by 2045.2 Approximately 8,000 over-sized modules - many being built in Edmonton - are scheduled for delivery to Fort McMurray and northward to the various oil sands projects over the next four years. Given the current regional transportation infrastructure deficit, there is conjecture that these modules will have to be transported bumper to bumper to achieve successful on-schedule delivery of all 8,000 over-sized modules by 2016! Oil Sands industry leaders believe delivery schedules will be substantially delayed because of this transportation infrastructure deficit. The oil sands services industry has expressed concern that such lack of infrastructure will ultimately hinder development of Alberta's oil sands.3

2. How government - at various levels - is planning for a robust future

In February 2009, Energy @ Gowlings published an article summarizing the Government of Alberta's 20-year plan for oil sands development, titled Responsible Actions - A Plan for Alberta's Oil Sands (the Strategic Plan). The Strategic Plan encourages the responsible development of the oil sands, in a manner that sustains industrial and provincial growth over the long term, and simultaneously enhances the quality of life of Albertans. The government highlights four priority actions in the Strategic Plan: environmental stewardship, strengthening communities, economic prosperity and building relations.4 Through regional planning, as well as other initiatives, Alberta intends to shift to what is anticipated to be a more effective and efficient management system that considers the cumulative effects of all activities and improves integration across economic, environmental and social pillars.5 Alberta's strategic plan for the oil sands, Responsible Actions, sets objectives for planning and developing healthy communities in Alberta's oil sands areas. It considers the regional impacts of growth from oil sands development, including: social and public infrastructure needs, the size of shadow populations, and the creation of affordable housing.

On a more specific basis, Comprehensive Regional Infrastructure Sustainability Plans (CRISPs) are the long-term and collaborative means of planning infrastructure in Alberta's three oil sands areas: the AOSA, the Cold Lake Oil Sands Area and the Peace River Oil Sands Area. Each CRISP will create a plan for infrastructure development based on possible future oil sands production rates and concomitant population growth, and will guide provincial and municipal governments in planning and working together.6 The preparation of each CRISP will assist the achievement of Alberta's vision for oil sands development outlined in Responsible Actions. It is a key implementation strategy promoting healthy communities and a quality of life that attracts and retains individuals, families and businesses.7

The CRISP for AOSA has been prepared, and the CRISP for the Cold Lake Oil Sands Area is in development. A CRISP for the Peace River Oil Sands Area will be completed over the next two years. CRISP for AOSA is a guideline for long-term infrastructure development in the region and supports Responsible Actions. It focuses on community development and identifies infrastructure needs relative to transportation, water and wastewater servicing, education and health care8. CRISP proposes extensive coordination among all stakeholders including municipal, provincial and federal levels of government and industry participants. Industry is required to align its project planning with CRISP; for example, roads and air facilities essential for industrial development would be planned and developed to integrate with the broader CRISP transportation network, while worker accommodations would be coordinated with other growth solutions identified in CRISP. The implementation and funding of CRISP proposals will rely heavily on coordination and integration with the more industrial-environmental regional planning coincidentally taking place under the regionally specific Land-use Frameworks (described below), as well as utilization of alternative financing mechanisms, partnerships and innovative project delivery.9

Regional plans developed under the Land-use Framework, such as the Lower Athabasca Regional Plan (LARP) and the Lower Peace Regional Plan, set a broad vision and objectives for environmental, social and economic development of the region. The focus of this regional planning is much broader in scope and is at a much less detailed level than the CRISPs, which are specific to infrastructure. There will, of necessity, have to be alignment between these various levels of planning, particularly in relation to multi-use corridors and areas set aside for future urban expansion. Planning assumptions regarding oil sand production levels for the AOSA and the Cold Lake Oil Sands Area CRISPs are now aligned with those in the LARP.10

3. Transportation

Probably the greatest infrastructure deficit in Northern Alberta is acknowledged to be in the transportation sector. The existing transportation infrastructure in the area consists of:11

  • Ground transportation:

Road infrastructure is dominated by two major highway corridors: Highway 63 from Edmonton, through Fort McMurray to north of Fort MacKay; and Highway 881 north from Edmonton to Fort McMurray. There is no paved, all-season east-west transportation infrastructure in the AOSA, and no connections of this type to communities to the north or east of the AOSA.

  • Air transportation:

The primary public airport in the region is in Fort McMurray, with smaller public airports in Conklin, Lac La Biche and Wabasca. Numerous private airfields exist across the region at various oil sands project sites, privately owned and operated by the respective oil sands companies.

  • Rail transportation:

Freight rail service terminates just south of Fort McMurray. The movement of over-sized loads is constrained in many areas, particularly through the Fort McMurray community and in the area south of Conklin.

The AOSA CRISP proposes a phased transportation development plan intended to be flexible and responsive to changes in population and hydrocarbon production rates. CRISP AOSA anticipates that a staged approach would incorporate more immediate, shorter term, and longer term transportation improvements to be implemented over a 35 year horizon:

  • More immediate activity would include12:
    • additional lane capacity on Highway 63 north of Fort McMurray and south of Mariana Lake;
    • upgrades to Highway 881 south of Conklin to improve movement of over-sized loads;
    • directing population growth away from traditional work camps and towards existing communities, a possible new community north of Fort McMurray and planned work camp communities in the Conklin and Wabasca areas;
    • development of an eastern bypass route around Fort McMurray to access project sites east of the Athabasca River;
    • implementation of bus based rapid transit north of Fort McMurray and between Lac La Biche and project sites near Conklin; and
    • upgrades to the Lac La Biche and Fort McMurray airports to accommodate increased demand.
  • Short terms plans include13:
    • extension of the eastern bypass route to ultimately become a highway to access projects east of the Athabasca river;
    • completion of a Fort McMurray ring road;
    • a road connecting Fort McMurray to Wabasca and extension of Highway 813 north from Wabasca;
    • specific consideration of commuter rail systems to provide efficient access between communities and project sites, and to locations outside of the AOSA; and
    • extensions and improvements in rail, bus and airport services.
  • Proposed longer term plans include:14
    • extension of Highway 63 north to Fort Chipewyan;
    • upgrades to the Wabasca airport as oil sands activity increases in that region; and
    • development of a northwestern highway route to connect the new urban growth node and planned work camp community to project sites related to carbonate development in the northwest of the AOSA.

4. The Highway 63 Bottleneck

Improvements to Highway 63 are among the infrastructure projects generating the most attention from media, government and the oil sands industry. It is the main corridor from Edmonton to AOSA. It is the only all-weather road extending out of Fort McMurray, which ensures its criticality to the oil sands industry and in the Regional Municipality of Wood Buffalo. Most of the roadway is a two-lane undivided highway. Between 2001 and 2005, over 1,000 motor vehicle accidents occurred on Highway 63 in which 25 people were killed and 257 others were injured.15 As recent as Spring 2012, two major accidents occurred claiming an additional nine lives and involving eight vehicles. It has been reported that there has been at least 149 fatalities on the so-called Highway of Death since 1990.16

Industry is concerned that deficient ground transportation in the region will delay project investment and consequent development. Since 2006, only 16 km of twinning has been completed south and 17 km north of Fort McMurray. Construction resumed May 13, 2012 on the twinning of 36 km of Highway 63 north of Wandering River, which is anticipated to be completed and open to traffic by Fall 2013. Under current plans, approximately 50 per cent of the Highway 63 twinning will be completed by 2015. The cost of twinning the remaining 240-kilometers of Highway 63 is estimated at $1 billion. The federal government has committed to contribute up to $150 million toward the project under the Canada Strategic Infrastructure Fund.17

The development and widening of transportation corridors has been well understood for centuries. The greatest impediment is not technological, but rather financial – how should the project be funded?

5. Possible Funding Strategies

a) Government Funding

Government has traditionally funded most infrastructure projects. However, government does not necessarily have one or more of the time, expertise, or capital for Highway 63 twinning and extension.

b) Industry Funding

Private funding of infrastructure is currently more philanthropic than commercial and industry is hesitant to finance the twinning of Highway 63. Ken Chapman, executive director of the Oil Sands Developers Group (OSDG) has argued that industry already pays very substantial royalties and taxes to the provincial government and that road improvement is a provincial (government) responsibility. The OSDG suggested that "the sector is already doing its part in making the artery safer by trying to take as many people off the road by using the aerodromes for workers and using buses".18 A potential solution to encourage the timely completion of the Highway 63 twinning project may be that industry funds same with the opportunity to sell the widened highway back to the Province at a set percentage of profit at a future date certain.

c) Public Private Partnership (P3)

Collaboration between government and industry (both oil sands and road building and maintenance industries) and a mix of funding options may be a more feasible approach for the timely twinning of Highway 63. This is often cited as a preferred approach as government can borrow money at lower rates than other entities and private industry can develop the roadway on a cost-efficient basis.

Features of a P3 model could include:

  • the roadway design, build, finance, operate and maintain (DBOFOM) by private entity/consortium;
  • repayment of development and maintenance costs on a monthly ("tariff") basis over a long term (e.g. 40 years); and
  • a more balanced allocation of cost/risk.

Ownership of the infrastructure (in this case, the roadway) could fall within one of numerous ownership models including:

  • Design Build Transfer ("DBT") with License to Operate;
  • Build, Own, Operate, Transfer (at End of Term) ("BOOT"); or
  • Government Own with Government Permission (license) to Operate.

If government is reluctant to pay the full cost of the Highway 63 twinning, additional revenue could be generated through a mix of use-base (a toll model) and/or development fee (charging only those making extraordinary or heavy-duty use of the road) models.

By utilizing any of the aforementioned models, the completion of the Highway 63 twinning project, for the purpose of saving lives and promoting the further development of the AOSA, consistent with both LARP and CRISP, could well be accomplished on a more timely and cost efficient basis.

6. Conclusion

The Province of Alberta should be applauded for the consultation and analysis that have resulted in the very thoughtful development of LARP and AOSA CRISP. It will be in the implementation of these plans, with the involvement of the relevant levels of government, regulators and private industry, that infrastructure improvement and upgrade must take place, permitting the proverbial "rubber to hit the road".


1 Infrastructure Struggling to Keep Pace with Oilsands Development, Calgary Herald, May 29, 2012: story.html#ixzz1wqNqSnXZ.

2 Comprehensive Regional Infrastructure Sustainability Plan - Athabasca Oil Sands Area, Government of Alberta, May 2011: (CRISP AOSA).

3 Calgary Herald, supra note 1.

4 Responsible Actions – A Plan For Alberta's Oil Sands, ENERGY @ GOWLINGS, 2009:

5 Lower Athabasca Regional Plan, 2011 – 2021, Government of Alberta: (LARP).

6 Land-use Framework, Government of Alberta:

7 Comprehensive Regional Infrastructure Sustainability Plan, Government of Alberta, Treasury Board and Enterprise: (CRISP).

8 CRISP AOSA, supra note 2 at 2.

9 Ibid at 4.

10 Ibid at 7.

11 Ibid at 46.

12 Ibid at 48-50.

13 Ibid at 50.

14 Ibid at 52-55.

15 Multi-vehicle crash on Highway 63 kills 2, CBC News Edmonton:

16 Highway 63, Road Of Sorrow, Calgary Herald, May 25, 2012.

17 Highway 63, Government of Alberta, Transportation:

18 Oil Industry Balks At Covering Twinning Costs For Killer Highway, Calgary Sun, December 2011.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.