Is Fort McMurray really headed for a 'gravel crisis?'

Warnings about a looming gravel crisis in the Fort McMurray region grew louder this week after news emerged that a replacement pit for the depleted Susan Lake mine won't proceed as expected.

The province and the mine's developer, Mikisew North, have mutually agreed to terminate their contract to operate the new Coffey Lake gravel pit, Matt Dykstra, press secretary for Alberta's environment minister, said in a statement,

The contract to operate the new quarry 105 kilometres north of the city ended on good terms on July 16, Mikisew North said in an email to CBC News. 

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The province didn't say why the contract was terminated. But the project has been dogged by delays and permit approval problems.

Failure of the NDP: MLA says

Tany Yao, the United Conservative Party MLA for Fort McMurray-Wood Buffalo, said the NDP government has failed to ensure there's an adequate resource for the region.

"It is quite scary," Yao said. "We need to build. It is the foundation of everything, from our roads to structures. The government has been aware of this issue for a very long time."

"This is extremely disappointing, and quite honestly scary for our region."

Yao said the crisis has worsened since the Fort McMurray Aggregate User Group raised the issue in February.

The industry group warned the government it would miss the April 2018 deadline to open a new mine to replace Susan Lake, about 85 kilometres north of Fort McMurray. CBC tried to follow up with the organization but its president did not return phone calls for comment.

Paul McLeod, a local contractor, agreed the situation has worsened. Though he hasn't seen the cost of gravel spike, he said there will be future pressure on the market as oilsands companies consume most of the local gravel supply.

"There's no question we are heading towards a crisis," McLeod said. "If we're not there, we'll be heading there soon. We now have an issue where the oilsands will take up the existing resources. This does not give me any comfort."

To meet the region's need in the meantime, Dykstra said, the province will ensure the Susan Lake gravel pit remains open and will work with other existing pits and speed up the approval of new ones in the area.

'Fictional' gravel crisis

One private aggregate operator in the region said warnings about a looming gravel crisis are overblown.

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Terry Owen, president of Hammerstone Corporation, said his quarry and the other private ones can meet demand in the region for the next 50 years.

"That so-called gravel crisis is purely fictional, in the sense there is lots of supply," Owen said.

Consumers might see small price increases, he said. If gravel prices spike by 20 to 30 per cent, the impact to homeowners rebuilding after the 2016 wildfire would be about $400 to $500, Owen said.

Now that the contract for the Coffey Lake pit has ended, the province said it will accept new bids from private companies in coming days, when it re-tenders the project.

Connect with David Thurton, CBC's Fort McMurray correspondent, on Facebook, Twitter, LinkedIn or email him at david.thurton@cbc.ca