Arthur Irving, Chairman of Irving Oil gestures while speaking during the grand opening of the Halifax Harbour Terminal in Dartmouth, N.S., in October, 2016.The Canadian Press
David Campbell is president of Jupia Consultants Inc. He was formerly chief economist with the New Brunswick Jobs Board Secretariat.
After taking over as president of Irving Oil in the early 1970s, Arthur Irving built one of the most successful companies in Atlantic Canada.
In a typical year, the company exports $8-billion to $10-billion worth of refined oil products across Canada and around the world, equivalent to an impressive 30 per cent to 40 per cent of the value of all interprovincial and international exports in the country.
There is an Irving Oil gas station in almost every small community in New Brunswick. Over the past two decades, I had the chance to chat with Arthur on multiple occasions and can confirm he cared deeply about the city of Saint John, where the company is headquartered, and the province.
However, in the global oil markets in which it competed for customers, Irving, despite trying, has never quite risen above its status as a bit player.
Arthur Irving passed away this week at the age of 93. With the future of the company he helped build in doubt, it’s unclear whether his long-term legacy will be one of positive economic benefits for New Brunswick.
Irving Oil is at a crossroads and decisions made in the wake of Arthur’s passing will either set the company up for a positive future or for a slow decline into irrelevancy.
There have been many attempts over the past 20 years to take the company to the next level.
Fifteen years ago, the company explored the development of a second oil refinery in Saint John in partnership with BP. The two firms cancelled the project 18 months later. Next, the company partnered with the Spanish firm Repsol SA to build an import liquefied natural gas (LNG) facility in Saint John but the plan soured when shale gas in Pennsylvania and Ohio started flowing, reducing the need for imported LNG to New Brunswick.
Arthur’s son, who helmed Irving Oil for a short time, attempted to move the company into other lines of business including green energy. However, his dad eventually decided to reclaim the leadership role and take the company back to its roots.
In the early 2010s, the proposed Energy East pipeline would have greatly benefited the Saint John refinery, but that project was also scuttled.
With no clear family succession plan, Arthur decided to put the company up for sale in 2023.
The economic legacy of his older brother, James K. Irving, is more established.
J.D. Irving Ltd., a separate company under the elder Mr. Irving’s control, has managed to expand its footprint in the region in a way that Arthur never could.
J.D. Irving Ltd. invested several billion dollars in recent years to build modern forestry operations, sawmills, and pulp and paper mills, setting up jobs for thousands of New Brunswickers and inducing several hundred million dollars each year in tax revenue for at least the next two generations.
Will Irving Oil transform itself into something new? Will it evolve into a producer of new forms of energy? Will the billions of dollars’ worth of capital deployed into the oil refining business continue to support the economy in New Brunswick? Will $8-billion in annual refined oil exports shift into green and clean energy exports?
Any firm purchasing Irving Oil has two main options.
First, it can use the company as a platform to evolve from a refined oil provider over the next couple of decades. In this vision of the future, the company continues to deploy capital in the province, offer high paying jobs and good careers to New Brunswickers, and be a positive economic force for generations.
The other option is to stay the course and continue to diligently serve the global markets for refined oil products as long as there is demand. In this scenario, the company slowly winds down before eventually closing its doors.
All things eventually pass. Arthur Irving lived a long and productive life. Whether or not his legacy lives on in New Brunswick is a different matter.