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Lac La Biche could be affected by Keytone XL delay

International politics and activism plays role in local economy

Dec 13, 2011 05:11 pm | Josh Marcellin

Sitting in the heart of Alberta’s oil country, Lac La Biche County is tethered to the boom and bust of the oil and gas market.

Take Crude Energy Services. The Lac La Biche-based oil sands contractor has grown from just three employees in 2005 to a peak of 120 this year. But while business is booming, international politics and activism could disrupt future expansion – and effect local companies.

Case in point is TransCanada’s $13-billion Keystone XL project. The Calgary-based company’s 2,800-kilometre pipeline from Hardisty, Alberta to refineries in Texas has been touted as a key component of oil sands expansion plans (the oil sands currently produce 1.7 million barrels of oil a day, with that number projected to increase to 3.7 million by 2025).

Common throughout North America – and Lac La Biche County – pipelines are approved and built so often the subject is almost boring. However, this project has been met with unprecedented opposition, with condemnation raining in from around the world. Environmentalists, state governors, former Albertan premiers, and Nobel peace prize winners – including the Dalai Lamai – have all urged President Barack Obama to deny approval for the Keystone XL pipeline.

“If they don’t build the pipeline, it probably won’t affect our business in the short term – but it could in four or five years when the industry hits capacity,” said Crude Energy co-founder Peter Mahowich.

In November, Obama announced he would delay a decision until after the next presidential election, likely in late 2012, so the pipeline can be rerouted around an environmentally sensitive aquifer in Nebraska that provides drinking water to millions of Americans. However, Mahowich said it might not be a bad thing if Keystone XL never carries a drop of oil to the States.

“One thing I look at, if this pipeline doesn’t go south with the bitumen, it could mean they’ll build upgraders in Edmonton,” he said. “I’d rather see Alberta get these long-term jobs instead of shipping them to the States.”

The dozens of organizations who campaigned against the Keystone XL are calling Obama’s delay a death sentence for the project.

“If you looked a year ago, most people would have said this pipeline was a done deal,” said Greenpeace campaign coordinator Mike Hudema. “It’s definitely a huge victory.”

Hudema said Alberta doesn’t have to be subject to the rollercoaster ride of a commodities-based economy. Indeed, the Alberta government’s economic outlook report for the upcoming budget says the province’s dependency on oil sands revenue puts it at financial risk.

“Alberta’s economic growth is largely driven by oil-related activity, particularly in the oil sands,” the report states. “This type of concentrated, commodity-based mega-project driven growth leaves the province particularly vulnerable to external turmoil in currency, credit and commodity markets.”

But Hudema said there’s another way: Alberta is the sunniest province in Canada, which makes it a prime spot for solar power; plus there are the wind corridors in southern Alberta as well as geothermal potential throughout. And despite how job creation is touted as the driving force behind building the Keystone XL pipeline, Hudema said Alberta’s potential for ‘green jobs’ is massive.

“Alberta could be a hotbed in renewable energy,” he said, adding that Germany’s push towards renewable energy has created 250,000 jobs. “There’s a finite amount of oil. It’s going to take time to make a transition, but it’s better to go towards it now – that’s where the rest of the world is headed.”

But Shawn Howard, spokesperson for TransCanada, told the Post the company fully intends to build the project they’ve been planning for the last three and a half years. While he acknowledged that moving towards renewable energy is admirable, Canada and the United States still needs the oil sands crude the Keystone XL would carry for many more years.

“Yes, we need to move towards renewable – but we’ll still need oil for decades,” Howard said. “You can’t tell people to stop using oil and not have unbelievable impacts on North American quality of life. We all want to move towards that goal, but it’s not realistic – the technology simply isn’t there yet.”

International politics, activism, and a multi-billion dollar industry all affect Lac La Biche’s bottom line – and the future of the community.

“As a natural resource, the oil sands will be here for the long term – they’ll still be here after Saudi Arabia’s oil is gone,” Mahowich said. “If it’s here for our children and grandchildren, then we’ve done our job.”

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