Friday, 09 December 2011 11:43

Communities hope Keystone XL becomes more than a pipe dream

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By Matthew Liebenberg — This email address is being protected from spambots. You need JavaScript enabled to view it.

Opponents of the proposed Keystone XL pipeline have been celebrating a recent announcement by the U.S. government to delay a decision on the project.

For communities along the Canadian portion of the pipeline route through southeast Alberta and southwest Saskatchewan the approval for the project cannot come soon enough.

Hermann Minderlein is the town administrator for Oyen, a community of about 1,100 people in Alberta. He said they are still positive the project will eventually happen.

“It would be nice.

It’s going to be a spike in our economy. When it happens is probably not as important as that it does happen.”

In a Nov. 10 announcement, U.S. President Barack Obama requested an additional 12- to 18-month review of route options for the pipeline with a specific focus on the environmentally sensitive Sandhills in Nebraska. There has been much speculation this delay can derail the project, but Calgary-based energy company TransCanada Corporation has remained confident Keystone XL will be approved.

On Nov. 14, TransCanada announced it supports proposed legislation in the State of Nebraska to move the project ahead. The intention of the legislation, which was introduced in the State legislature on that same day,  is to change the pipeline route to avoid the Sandhills.

In southwest Saskatchewan the pipeline will be a few kilometres outside the town of Shaunavon, whose population of about 2,500 has already benefited from oil industry activities in the area. According to Shaunavon Mayor Sharon Dickie, the town has an unemployment rate that is close to zero.

“We in Alberta and Saskatchewan have a whole different mindset about the value of oil,” she said. “Companies like TransCanada have been in our communities for many, many years.”

There are already two other pipelines in close proximity to the town, and Dickie said safety and environmental concerns have not been an issue for the community.

“We will open our arms to Keystone. We know the due diligence that TransCanada puts into their projects.”

Pipes have already been stockpiled at a site southeast of Shaunavon in preparation for the start of construction. Dickie said up to 40 trucks a day transported pipes through the town during the summer.

“Most people didn’t even know they went through our town because they were so strategically planned,” she mentioned “So they’re set to go here. ... They’re waiting, their project will proceed as soon as they get the nod.”

She was disappointed about the decision by President Obama to delay approval, but she remains confident the project will continue.

“It’s a bit frustrating because it’s driven by people that don’t understand the project. I think their focus is the environment and I appreciate that. That’s wonderful when groups make sure that things are being complied with. However, the jobs that would be created for the Americans in particular through this project ... I just don’t understand why they would show any resistance to this.”

Saskatchewan Premier Brad Wall, who is also the MLA for nearby Swift Current, is hopeful a final decision will not take as long as the U.S. administration anticipated.

“It looks like there’s really no excuses left for the Obama administration now, but to approve this project,” he said. “Their own administration has weighed in on the environmental efficacy of the pipeline as it’s proposed, the jobs are obviously there in a country that desperately needs them

and the State of Nebraska has developed a compromise.”

Wall felt the situation is of direct and indirect concern to Saskatchewan. Due to a lack of pipeline capacity, as much as 25 per cent of the oil in the proposed pipeline at any given time might be the conventional Bakken oil, including some of it from Saskatchewan.

If the pipeline is rejected, it is going to be a setback for the trade relationship between Canada and the U.S., which will also have an effect on Saskatchewan.

Dickie and Minderlein both indicated businesses and residents of their town will benefit from the Keystone XL project.

A construction camp for 400 people will be located at Shaunavon. Dickie said the benefits will continue after construction.

“There’s always job creation from any project like this,” she mentioned. “Shaunavon is a primary location in terms of monitoring and so there will be substations, different things.”

In the case of Oyen, a construction camp for around 250 people will be located a few miles out of town at the Highway 9 and 41 intersection for two construction seasons.

Even before then, Oyen’s population will see a significant jump when a camp for 250 workers will be located at the town for an ATCO Electric power transmission project.

Minderlein said the two camps could overlap, depending on starting dates for the projects.

“Ideally, I guess the situation would be if we have one camp following the other so that you have a more even flow over say a three-year period rather than two years where it’s hectic.”

The presence of the project workers will even benefit the town’s recreation facilities.

“Things like our golf course get a big increase to the activities going on because people still got to have their recreation time,” he said. “So anytime they have a spike in revenues it’s good for them.”

Not everyone shares the local optimism over the benefits of the proposed pipeline.

The Alberta Federation of Labour (AFL) estimates the Keystone XL project will only create about 12 permanent jobs in Canada after construction.

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Their calculation is based on TransCanada’s indication the existing Keystone pipeline, whose Canadian portion is longer than the proposed Keystone XL, has created 17 full-time jobs.

In testimony at the National Energy Board hearing on the Keystone Cushing expansion in Oyen on April 8, 2008, TransCanada Vice-President Robert Jones said they are not anticipating any permanent ongoing jobs from an operations perspective.

“The personnel that we have in place or we propose to have in place in order to operate the existing facilities will be similar to the staff that we’re going to require for the expanded facilities as well,” he noted.

The AFL has been critical of the Keystone XL project. Instead of transporting unprocessed bitumen by pipeline to the U.S. for upgrading, the AFL wants the bitumen to be processed in Alberta.

“Upgrading more bitumen in Alberta will help our province in many ways,” AFL President Gill McGowan said in a media release after the U.S. decision to delay the Keystone XL pipeline.

“Increasing value-added industries will provide quality, long-term jobs for Albertans and Canadians.”

According to the AFL, an investment of $314 billion in value-added capacity in Alberta (upgrading, refining and petrochemical production) would increase provincial, federal

and municipal revenues by $748 billion and add nearly two million jobs to the economy.

The National Energy Board approved the construction and operation of the Canadian portion of the Keystone XL pipeline in March 2010.

This portion of the project involves the transportation of crude oil from Hardisty, Alta. over a distance of 529 kilometres to the Canada/ U.S. border at Monchy, Sask.

The Board’s approval included 22 conditions that must be met before TransCanada will be allowed to open the pipeline. It includes conditions on safety, protection of the environment and landowner rights. The Board also included a condition to monitor greenhouse gas emissions.

Environmental groups have been critical of the National Energy Board’s approach to pipeline development applications related to the Canadian oil sands. Environmentalists argue the upstream environmental and greenhouse gas impacts of expanding oilsands development to fill a new pipeline must also be considered.

Pembina Institute spokesperson Dan Woynillowicz said more needs to be done to manage the environmental impacts of the oil sands.

“It could very well be that if those impacts are being properly managed, we may not see the same rate of oil sands development or the same scale of expansion, which then calls into question whether or not the pipeline would ever be needed,” he mentioned.

The Institute’s position is any additional pipeline capacity will only result in a faster expansion of the oil sands.

“As it stands right now neither the federal government nor the government of Alberta have the appropriate regulations and systems in place to ensure environmentally-responsible development of oil sands,” he said. “Adding additional pipeline capacity enables continued expansion of oil sands development absent those safeguards. We don’t feel there should be extra pipeline capacity that’s been developed because if you build it they will fill it.”

Woynillowicz cautioned communities should carefully consider the benefits of mostly construction jobs against the long-term risks

of a pipeline.

“The risks that can be associated with having a pipeline passing through your community extend over a much longer period of time and critically also increase over time as the pipeline ages,” he said. “There have been some very legitimate questions raised both in the U.S. — less so in Canada — about whether or not our pipeline systems in North America are adequately regulated or adequately monitored.”

Saskatchewan Premier Brad Wall said he has not heard any concerns over pipeline projects.

“We’ve had a number of pipeline projects that have spurred a lot of economic activity and have created jobs. I think by and large they’re supported here in Saskatchewan.”

Wall is is critical of the allegations, especially by Hollywood celebrities, about Canadian oil as being dirty.

“It’s a remarkably naive statement,” he said.

“If they look very carefully at their own oil they’ll know that north California thermal oil has a higher carbon footprint than steam-assisted gravity oil sands oil that arrives in America.”

He also emphasized Canadian oil is conflict-free and Canadians have the same values of rule of law and human rights as their American counterparts.

“These Hollywood types would rather apparently buy oil from countries that aren’t interested in the environmental impact of oil,” he said. “Robert Redford, Daryl Hannah and these other Hollywood glitterati that have weighed in on these things should do some home work. If they did, they’ll find — and Al Gore too — they’ll find a few inconvenient truths of their own.”

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