In this Nov. 6, 2015, file photo, a TransCanada’s Keystone pipeline facility is seen in Hardisty, Alberta. (Jeff McIntosh/The Canadian Press via AP)

In this Nov. 6, 2015, file photo, a TransCanada’s Keystone pipeline facility is seen in Hardisty, Alberta. (Jeff McIntosh/The Canadian Press via AP)

Oil and gas “existential crisis” looming in rural Alberta

Paul McLauchlin, president of Rural Municipalities of Alberta (RMA) on oil and gas

By Jennifer Henderson Local Journalism Initiative Reporter, St. Albert Gazette

Canada needs to start becoming more energy-independent and the country needs to start working toward a national energy strategy to protect itself from volatile market changes, like the cancellation of the Keystone pipeline, says the president of an organization representing rural Alberta municipalities.

Paul McLauchlin, president of Rural Municipalities of Alberta (RMA) and Ponoka County Reeve, says relying on international energy markets is fraught with risk, but looking inward as a country for an energy strategy – for all types of energy – is something the country can control.

McLauchlin says rural municipalities weren’t surprised to hear the Keystone pipeline was cancelled, but said it is now more important than ever for rural Alberta to pivot toward a different energy strategy.

While the cancellation of Keystone by U.S. President Joe Biden impacted many rural communities in the east of the province, McLauchlin said the decline in the oil and gas sector is felt across the province overall, with many rural jurisdictions pulling much of their tax base from the industry.

“It’s touching on an existential crisis. It definitely is getting close to that,” McLauchlin said.

“If you see a negative trajectory in our oil and gas industry, that definitely changes rural Alberta. It’s core to the majority of the rural municipalities that I represent. Oil and gas is core to our existence as it is now.”

Without action, McLauchlin says the province runs the risk of becoming the Rust Belt – a region from New York through the Midwest that was once dominated by manufacturing but has now become synonymous with regions facing industrial decline – or northern Scotland in the ’80s.

“We don’t want to become one of these hollowed-out industrial centres where we’ve got rusting gas plants and then it becomes a shadow of its former self,” he said.

“I think we have to force ourselves to innovate because I don’t think (we) have a choice, right? Apathy isn’t your choice – that’s not going to work.”

Municipalities can be leaders in creating a national energy strategy because they are so close to the situations on the ground, he noted – they can build a consensus together and then bring a plan forward to the federal government.

An energy plan that deals with the climate change goals the country has and takes the strategy down to a local level is possible, McLauchlin said, allowing small communities to thrive and to utilize the resources and skills in the country.

Natural gas can be a “phenomenal product,” McLauchlin said, and in the right situation and treated the right way, can be a low carbon fuel. The country needs to also supply different markets with blue hydrogen, a product made from natural gas in the process of steam methane reformation, with the resulting emissions curtailed through carbon capture and storage or green hydrogen, which is a hydrogen fuel that is created using renewable energy instead of fossil fuels.

Right now, some jurisdictions in southern Alberta are already capitalizing on renewable products and showing a lot of success, with up to 20 per cent of municipal tax assessment coming from renewable energy.

But McLauchlin said the province has to move fast on finding solutions or it will get left behind.

“We have to find the solutions and we have to move fast on this. None of this is theoretical,” McLauchlin said.

“(We need to) start to use future planning as the way we deal with our energy industry instead of looking backwards.”

Keystone withdrawal disappointing

Doug Irving, Mayor of Hardisty, where the Keystone pipeline starts, said the news of the project’s cancellation was disappointing, but not devastating.

The pipeline is owned by TC Energy and starts at the Hardisty Terminal, which is a major storage and pipeline export hub for the province.

“With all of these pipeline works, we seem to get a lot of ups and downs,” Irving said.

“We’re all excited and then jobs get cancelled, but they cancelled outside what we can do. The Town of Hardisty really has no say in permits or who approves things.”

The project brought some 600 workers into the town, which has a permanent population of 540 people – a huge boom for Hardisty’s hospitality industry.

“It’s a major economic disruption, that’s for sure,” Irving said.

“It is a big blow to us.”

The Alberta government expected the pipeline to bring 2,000 construction jobs to the province over two years and then generate $30 billion in revenue after it was complete. The government invested $1.5 billion in the project in March 2020 to get construction started on the extension after it was approved by the U.S.

Irving hopes the project will be reconsidered and reviewed and somebody else will issue a permit for it.

“Maybe we can get a reversal on the permit. I don’t think it’ll happen very quickly. But that’s the sort of view of Hardisty. It’s outside our control and we have to work around it as best we can and hope for the best in the future.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

COVID
Red Deer down to 313 active cases of COVID-19

Alberta reports an additional 411 COVID-19 cases

(Facebook photo)
Calumet Curling Club wins $20k in 50/50 draw at Scotties

Small curling club between Ponoka and Bashaw wins big

THE CANADIAN PRESS/Alex Panetta
Economists “cautiously hopeful” for economic recovery in Alberta

Charles St. Arnaud says Alberta’s recovery will rebound along with roll-out of the COVID-19 vaccine

Alberta’s chief medical officer of health Dr. Deena Hinshaw acknowledged that Friday would be one year since the first case of COVID-19 was identified in the province. (photography by Chris Schwarz/Government of Alberta)
Three more Red Deer COVID-19 deaths, 331 active cases in Alberta

Red Deer is down to 362 active cases of the virus

Caitlin Kraft, the sister of Jeffery Kraft, stands third from the left, holding a sign calling for the maximum sentence for Campbell, who is charged with manslaughter. (Photo by Paul Cowley)
UPDATED: Judge again rejects submission of 7-year sentence for slaying of Kraft

Tyler John Campbell charged with second-degree murder for December 2019 homicide

Hockey hall-of-fame legend Wayne Gretzky, right, watches the casket of his father, Walter Gretzky, as it is carried from the church during a funeral service in Brantford, Ont., Saturday, March 6, 2021. HE CANADIAN PRESS/Nathan Denette
Walter Gretzky remembered as a man with a ‘heart of gold’ at funeral

The famous hockey father died Thursday at age 82 after battling Parkinson’s disease

Supporters rally outside court as Pastor James Coates of GraceLife Church is in court to appeal bail conditions, after he was arrested for holding day services in violation of COVID-19 rules, in Edmonton, Alta., on Thursday March 4, 2021. THE CANADIAN PRESS/Jason Franson
‘Law remains valid:’ Pastor accused of violating health orders to remain in jail

The Justice Centre for Constitutional Freedoms is representing the pastor

A decommissioned pumpjack is shown at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. The Alberta Energy Regulator says it is suspending all of the licences held by an oil and gas producer with more than 2,200 wells and 2,100 pipelines after it failed to bring its operations into compliance. THE CANADIAN PRESS/Jeff McIntosh
Alberta Energy Regulator suspends licences of oil and gas producer that owes $67M

The company is being asked to comply with past orders to clean up historic spills and contamination

Prime Minister Justin Trudeau holds a press conference in Ottawa Friday, March 5, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Trudeau holds firm on premiers’ health-care funding demands, COVID-19 aid comes first

Premiers argue that the current amount doesn’t keep pace with yearly cost increases of about five per cent

Seniors in the 65-unit Piper Creek Lodge are among those waiting for COVID-19 vaccinations. (File photo by Advocate staff)
Central Alberta senior lodges anxiously waiting for COVID-19 vaccinations

“Should be at the front of the line, not the back of the line”

Pictured here is Stettler’s Jenner Smith with a guide dog from Aspen Service Dogs. An online auction will be running soon to help raise funds for Jenner to receive his very own service dog later this year. Jenner, who is four years old, was diagnosed with Autism Spectrum Disorder in 2019. photo submitted
An online auction is planned to raise funds for a service dog for a Stettler family

Jenner Smith, four, was diagnosed with Autism Spectrum Disorder in 2019

Walter Gretzky father of hockey hall-of-famer Wayne Gretzky waves to fans as the Buffalo Sabres play against the Toronto Maple Leafs during third period NHL hockey action in Toronto on Tuesday, Jan. 17, 2017. THE CANADIAN PRESS/Nathan Denette
Walter Gretzky, father of the Great One, dies at 82

Canada’s hockey dad had battled Parkinson’s disease and other health issues

Most Read