Pipeline dreams dashed: Alberta communities anxious as they await Keystone XL decision

The Town of Hardisty, home to about 550 people in the rolling hills of the Alberta's Battle River Valley, was banking on doubling its population over the next decade.

A large plot of land, with the oil terminal silos visible a few kilometres to the east, was set aside for an anticipated spike in new industrial and commercial business in the rural town 200 kilometres outheast of Edmonton.

Property tax from the parcels of land was expected to generate over $100,000 annually, money that would help build roads and provide other services, says Hardisty's chief administrative officer Sandy Otto.

But those visions of growth were built on the Keystone XL pipeline, which is now in jeopardy by U.S. president-elect Joe Biden's reported plans to cancel a key project permit.

"We'll basically have to put our community on hold as to whether or not we can move forward," Otto said. "We'll be going at a snail's pace again if we can't get Keystone through."

The pipeline, owned by TC Energy, originates at the Hardisty Terminal, a major storage and pipeline export hub for the Alberta oilsands, before snaking southeast to the Manitoba-North Dakota border and down to Nebraska.

"When you're relying on other governments and their permitting processes and their visions, there's always uncertainty," Otto said.

The Alberta government invested $1.5 billion last March, along with billions more in loan guarantees, to kickstart construction on the pipeline extension after it was given the green light by U.S. President Donald Trump.

The project, first proposed in 2008 and rejected under President Barack Obama's administration, has long drawn the ire of environmental groups who are opposed to additional oilsands investments and wary of pipeline spills.

The Alberta government expected Keystone XL to create 2,000 construction jobs over two years and generate $30 billion in revenue once it was complete.

Now hundreds of those jobs are at risk, and local towns along the pipeline route set to miss out on the economic windfall in the near- and long-term.

At the provincial level, Premier Jason Kenney said Monday he estimates the government could be on the hook for about $1 billion of its investment if the project is cancelled.

'A big difference' to a small village

The village of Consort, home to just over 700 people a few hours east of Red Deer, was preparing to host a roughly 300-person work camp this spring as pipeline construction continued north along the Alberta-Saskatchewan border.

"That can be a big difference in additional economic impact for all the small businesses," said Mayor Michael Beier.

"In the long term, half our community works in the oilpatch or is directly tied to the oilpatch in our area, so without that, there doesn't look like there'd be a whole bunch of growth unless we get another pipeline for export."

About an hour south, the town of Oyen has been enjoying a mini-boom, with the arrival of nearly 1,000 workers during the 2020 construction season.

Given the provincial and federal government's support for the project, Mayor Doug Jones was confident the pipeline would get built.

"I was quite shocked," Jones said of the latest development. "I did not expect that."

In abrogating the permit, former vice-president Biden will make good on a long-standing campaign promise to reverse Trump's approval of the project.

Work camps were also being planned for Provost, a community about 300 kilometres southeast of Edmonton. Despite the grim news coming from Washington, Reeve Allan Murray is still hopeful construction will continue.

"I was very disappointed," he said. "Money gets spent when people are around."

Municipalities along the pipeline right-of-way are set to miss out on $4 million in property taxes if the project is cancelled.

But back in Hardisty, the impact is bigger than just tax revenues.

The pipeline was expected to bring 830,000 barrels per day through the local terminal. New jobs, from maintenance to metering services, would be needed to help support that demand, said Blake Moser, chair of the Hardisty and District Development Group.

"The knock-on effects are something that you're not really able to measure," he said.

"It's tough for everyone to take."