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Fort McMurray fights human camps in the final headache for the energy industry

Fort McMurray, a remote Canadian city built primarily by the oil industry, is trying to limit the ability of these companies to fly outside the city.

The city, which is located in the center of the world's third largest oil reserves, is developing a charter restricting the construction of housing for a temporary worker, known as a camp for people, as he seeks to encourage manufacturers to hire on site or to have workers settle there. The goal is to raise the population, local businesses and housing prices in a place where in 2016 there was a grim double blow caused by a devastating fire and falling oil prices.

“We want more people to live in this region and call it a home,” said Don Mayr from the regional municipality of Wood Buffalo, which covers the city, by telephone on Tuesday. "It will give many more people in this region a lot more opportunities."

Advisers to the region voted for the proposal to stop the camps of people within a radius of 75 kilometers from the city. The struggle of Fort McMurray with human camps is only the last headache for manufacturers who have had to deal with pipeline opposition and production cuts imposed by Alberta in order to try to raise local oil prices.

Alberta government has the right to intervene through a restriction order – Peter Tertsakyan

Peter Tertsakian, executive director of the ARC Energy Research Institute, believes that the risk of not interfering with the oil surplus will be worse than the risk of interfering.

The ban on the creation of manufacturers of new camps will prevent further investment only at a time when capital expenditures will decrease for the fifth consecutive year, said Karim Zariffa, executive director of the Union of Petroleum Communities, a local trade organization representing the industry.

“Any moratorium imposed on industry is essentially a development moratorium, aggravating the lack of investor confidence in the oil sands sector,” he said, adding that oil companies are trying to attract people to local life.

“This is only a draft, which may never be approved, but there is a risk that it will (although the timeline and wording is not defined) and, if so, could affect 61 camps and 27,256 workers at the border,” says an analyst from Kirk Wilson. Beacon Securities Ltd., said in a statement on Wednesday.

In recent years, most oil and sand extraction projects have either been canceled or suspended, since large companies, including Royal Dutch Shell Plc and ConocoPhillips, have sold their operations to local producers, such as Canadian Natural Resources Ltd. and Cenovus Energy Inc. announced since 2014, while the Aspen project with a capacity of 75,000 barrels per day is a notable exception last year.

According to the Canadian Ministry of the Environment, the average temperature this month at Fort McMurray, located about 740 kilometers (460 miles) north of Calgary, is -17.4 degrees Celsius. The city’s history has been associated with the oil industry since the 1960s, when what is now Suncor Energy Inc. first began extracting sticky bitumen from local soil. Fort McMurray was then a small distant outpost along the Athabasca River, connected to southern Alberta by a single dirt road. Today there are hotels, fabulous restaurants and a huge sports center.

When oil prices traded north from $ 100 a barrel to a crash that began in 2014, the people camps served as a safety valve. They employed workers who would otherwise burden a city that could not build houses, roads and infrastructure fast enough to keep up with growth.

However, according to the census, in this area, since 2015, the population has decreased by 11 percent, to 111,687 people last year. About a third of this number was the so-called shadow population, which consists mainly of workers who remain in camps. During this period, the shadow population has decreased by 15 percent.

“Small businesses are struggling,” said Mayor Scott. Many workers do not even use the local airport, instead they fly on charter airplanes to the runways of private companies. Local homes lost about 25 percent of their value after the 2014 recession.

“We need not only oil sands to be strong, but we need this community to be strong,” said the mayor. "It will be a balance."

– With the help of Brian C. Sullivan and Michael Bellushi

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