When newly-elected US President Joe Biden closed the book on the latest chapter of a new oil pipeline that was to run from Alberta into America, it made international headlines. It also had an immediate effect in the offices of many businesses across the Lakeland — a region known as the gateway to the oil sands.
Biden used his presidential veto powers on January 20, his first official day in office, to overturn permits signed by former US President Donald Trump in 2017 for the Keystone XL pipeline. The line's planned route was to run from Hardisty in central Alberta to a junction in Steel City, Nebraska, about 2,000 kilometres south of the Canada-US border. The Keystone XL line, operated by Canadian-based TC Energy, would then link to existing pipelines, including the original Keystone line that also runs from Hardisty to Steel City, part of a network that runs Canadian and US crude oil to the Gulf Coast.
The new Keystone XL line was slated to send anywhere from 500,000 to 800,000 barrels per day of Canadian oil to the US Gulf Coast and several refineries and storage facilities in between.
It is the loss of that quantity of oil export that will continue to choke local economies, says Shawn McDonald, president of the Lac La Biche-based Resource One Aboriginal Business Association (ROABA).
"To our local area, this means any new projected projects, and Industry growth will once again be put on the back burner if not cancelled altogether due to a lack of capacity we just lost to fill volumes that would have been allocated to the Keystone," said McDonald, speaking on behalf of his association's membership. "This in turn will will have a negative impact on the area’s businesses to get back on their feet financially and affect all surrounding areas even more than the current Alberta Recession we are in, and on top of COVID restrictions that also took many jobs and opportunities away."
McDonald, whose organization represents Indigenous-based companies across the Lakeland, says building capacity for industrial sectors across the region, as well as the province and the country is a benefit to all people. The fact that the US president chose to shut down the cross-border project — a commitment he's held throughout the presidential election campaign — obviously wasn't a surprise, says McDonald ... but it could have been done differently.
"It came as no surprise to me, as Biden is just following through on his campaign platform. The only surprise me was how fast he acted on it on his first day in office. To me any respectable neighbour and ally would have the decency to reach out and discuss it before making such a huge decision," he said, laying some of the blame at the feet of Canada's national leadership for not preparing for the inevitable. "The Canadian Federal Government has failed to have a quick response to Biden on killing Keystone XL. It was no surprise that he was going to kill it, so they should have had a contingency plan in place already to deal with it."
Instead, the association president, who is also the owner of his own resource-dependent maintenance company, says efforts should go back to re-igniting the Energy East pipeline project, sending Alberta's oil product to Eastern Canada. Although that project was halted in 2017 due to resistance from Quebec and Ontario legislators.
"Keystone is a very important pipeline, but a revised Energy East Pipeline would benefit our Country as a whole, the Eastern provinces need to be educated on supporting local first, and not bitting the hand that literally feeds them," said McDonald.
Bonnyville-Cold Lake-St. Paul MLA David Hanson was also disappointed — but not surprised — by last week's announcement. He also shares McDonald's view about looking for other export options, but Hanson, who spent his pre-political career in the region's oil and gas industry, is holding out a little hope that the XL project isn't completely dead.
"We need to increase our capacity one way or another, so now our only real bet is Trans Canada (pipeline) unless Prime Minister Trudeau can go and talk some common sense to the Biden administration that it is a benefit to both countries. Hopefully, it will go forward, but right at this moment it doesn't look good."
Making economical troubles worse for the province and the local industry, Hanson's UCP government did commit more than $1 billion of taxpayers' money to the Keystone XL project after Trump approved the permits. In the days following Biden's veto, TC Energy announced it was halting construction on the project, eliminating more than 1,000 jobs. Hanson says fallout from the job losses and the ripple effects on both sides of the border could force the issue back to the table.
Again, the MLA says, there's still time.
"It's all up in the air until the final decision is made on whether it is going to proceed or not. We can always hope because TC Energy has shut down operations already, which basically laid off a couple thousand people on both sides of the border ... that might get the attention of the administration. There's a lot of people (who) were depending on that work, not just Canadians, Americans as well."
If there is still time, it's running out for many of the businesses and rural communities already affected by the continuing economic downturn and the lack of new stimulus, says McDonald.
"Our population is dwindling already, so how do we implement youth retention if there is not as much work in the area for them? Again, another negative economic impact for us.
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