Japan and Alberta Build on 40-year Commitment
It was a historic moment when the Alberta New Democratic Party (NDP) won the election on May 5, 2015, ending the 44 year reign of the Progressive Conservatives. The results were felt as far away as Tokyo.
“I actually had calls from [Japanese] energy stakeholders the very next day concerned about what a platform of sustainable and responsible energy development meant and how it would affect business in the province,” David Anderson, managing director of the Alberta Japan Office commented.
“To be honest I wasn’t completely sure myself, but I was able to quickly inform clients of the level of industry engagement and commitment the new government had to the energy file, after I witnessed — firsthand — an industry roundtable that the premier chaired at the Stampede Investment Forum in July of that year.”
Alberta has admittedly had some disappointing setbacks, including the recent announcement that the TransCanada Corporation would halt the Energy East pipeline project. However in terms of Japan, “All signs point to a bright future for the friendship between Alberta and Japan,” Alberta Premier, Rachel Notley said recently when addressing investors, representatives from Japan’s energy and public service sectors, and Indigenous and municipal leaders.
Much of this success can be attributed to the beginning of fiscal 2017 when Notley lead a trade mission to Japan, accompanied by Alberta’s Minister of Economic Development and Trade Deron Bilous. The goal of the delegation was to show support for expanding economic opportunities in Japan for Alberta’s
priority industries in the energy sector.
The trip has already yielded positive results for the province. A ribbon cutting ceremony in September marked the opening of the Hangingstone expansion project near Fort McMurray, Wood Buffalo in Alberta. The project is to be developed by a Japanese petroleum exploration and development company.
Operated by Japan Canada Oil Sands Limited (JACOS) in partnership with CNOOC-Nexen, the expansion project is valued at C$2 billion, and uses steam-assisted gravity drainage technology. Right from the start — on the day of the ribbon-cutting ceremony — the project was able to make its first delivery of bitumen to Edmonton, and is currently producing about 5,000 barrels of oil per day (bbl/d). Full production at the project is expected to reach 20,000 bbl/d sometime next year.
Our government understands how important the oil sands are both to the province and the world.
“Our government understands how important the oil sands are both to the province and the world,” commented Notley. “That’s why we have worked closely with a number of key industry partners, including JACOS, to position the oil sands industry as a leader in sustainable and environmentally responsible development. I want to thank JACOS for their work and commitment in the province and underscore that it’s never been more important for us to get new pipelines built, which will help diversify our markets and further strengthen our ties in the region.”
This message of support for the Trans Mountain Pipeline expansion — which would provide Alberta’s resources access to the Asian market — was echoed by Minister of Energy Margaret McCuaig-Boyd, during her mission to Japan in September to promote investment in Alberta’s energy sector.
JACOS, as the first Japanese-owned company to work and invest in the region’s oil sands, commenced developing the area in 1978. The Hangingstone expansion project concludes the company’s largest investment in Alberta to date, and the largest investment outside Japan by JACOS’s parent company, Tokyo-based Japan Petroleum Exploration Company (JAPEX).
“The start-up of this project is meaningful for Alberta as it is being sanctioned, with confidence, even in the current challenging economic conditions. The attendance of the premier is very encouraging not only for JACOS and its partner, Nexen, but also for other international investors who are seeking opportunities in the vast oil sands resources and want to be assured of the Alberta government’s support,” Satoshi Abe, president of JACOS said.
During the mission’s visit in April, Notley and Bilous signed an agreement with the Japan Oil, Gas and Metals National Corporation (JOGMEC) to work together on the scientific research and technical components of oil and gas exploration, development and production.
Today, Japan is also the province’s third-largest trading partner, accounting for 15 percent of non-US exports.
A Japanese state-run entity, JOGMEC invests in early-stage resource exploration projects around the world. To date, it has invested more than C$1 billion in Canada and is deeply involved in Alberta’s energy sector. Its participation includes the company’s work to commercialize Super Critical Water Cracking technology in Alberta as a means to reduce emissions associated with the oil sands upgrading process.
While in Japan, Notley also announced renewed Japanese support for Alberta’s forestry industry. This was marked by an allocation of C$300,000 to the Canada Wood Group, to improve access and regulatory issues for Alberta producers in export markets, and C$300,000 to the Alberta Forest Products Association, to increase its international promotion over the next three years.
The announcement followed a tour of the Saitama Prefecture state-of-the-art Mitsui Home Component Plant panel factory, which uses Alberta-sourced, premium-grade lumber specific to Japan called J-grade lumber. It also manufactures oriented strand board, a type of engineered lumber.
In addition Bilous facilitated a roundtable discussion to showcase Alberta beef- and pork-product exports to Japan. As Alberta’s largest market for pork and third-largest market for beef, Japan imported C$1.2 billion worth of agriculture and food products from Alberta in 2016, one-third of Canada’s total.
The minister also met with the president of Costco Japan and toured a Costco facility. The wholesale retailer has been a significant buyer and seller of Canadian and Alberta pork products.
Japan is one of Alberta’s longest-standing trading partners. The province’s first international office opened in Tokyo in 1970 and continues to play a critical role in connecting Alberta Province with Japanese businesses.
Today, Japan is also the province’s third-largest trading partner, accounting for 15 percent of non-US exports. The multi-faceted relationship between the two regions also extends beyond business to include cultural and sports-related exchanges, educational initiatives and municipal twinning.
“The Alberta–Japan relationship is strong, historical and on an upward trend. The complementarity of our economic make-up is easy to understand, and serves as the root of our long-term bilateral partnership,” noted Anderson. “Having Premier Notley visit in April 2017 sent a well-received message of commitment to Japan and JACOS’s unprecedented C$2 billion expansion in Alberta’s oil sands strongly confirms Japan’s continued belief in the province.”