One of President-elect Joe Biden’s first acts in office reportedly will be to scrap his predecessor’s approval of the Keystone XL Pipeline project, leaving many in Alberta’s already hard-hit construction sector gutted.
“We are not happy. We are very disappointed, but we are waiting to see what happens on Wednesday and to have it confirmed,” said Terry Parker, executive director for the Building Trades of Alberta. “It was going to be a lot of well-paying jobs for our members. We were looking forward to the impact it was going to have on Alberta’s economy. We are disappointed to say the least, but we haven’t given up.”
Parker said national building trades officials have been reaching out to the Biden administration to delay the decision and convince them to reconsider.
While campaigning, Biden promised to rescind President Donald Trump’s approval of the project and it has since been revealed that he indeed plans to do so on his first day in the White House.
As a result of this news, the premiers of Alberta and Saskatchewan are condemning his plans with Alberta Premier Jason Kenney looking into potential legal options.
“Right now we have close to half our 60,000 members unemployed,” said Parker. “This work could have been very helpful for a lot of trades that are involved in pipelines. This could have been full-time work for years.”
Parker explained pipefitters, operators, teamsters and labourers are the main trades involved in pipeline work but many more become involved in the construction of pump stations. As soon as a pipeline increases capacity for the oilsands, more work is created.
“We are hoping that the prime minister and our federal government will reach out to Biden and try to convince him that this is a step in the right direction and to move forward with the pipeline.”
Werner Antweiler, a professor with UBC’s Sauder School of Business, said the move was not unexpected and is part of a larger trend taking place in North America.
“The difficulty is that these projects are being planned while standing on one leg instead of two,” he said. “That is the trouble we have with resource projects. To have some certainty and to make investments we need to be sure that there is more than just partisan support.”
However, Antweiler noted that the glass is half full, as the Line 3 replacement project and the Trans Mountain Pipeline Expansion are going ahead and will likely be more important now that Keystone XL will mostly likely be cancelled.
But Antweiler cautioned builders that these are likely the last significant pipeline projects.
“We are look at a turnaround in this industry,” he said. “The move away from oil has started. A strategic reorientation is taking place.”
He noted in addition to climate change concerns becoming more important, electric cars are growing in popularity and electricity is far cheaper than gas. But the LNG industry and natural gas industry could provide opportunities for builders in the pipeline sector.
“The construction industry is certainly looking towards where they can develop their skills to remain in the energy sector,” said Antweiler. “The way we use energy is changing.”
He added while the oilsands is producing five million barrels of oil a day, he doesn’t ever see that going beyond 5.5 million after Line 3 and Trans Mountain are completed.
“The key for the construction industry will be flexibility,” said Antweiler. “The demands of the day are always changing.”
Follow the author on Twitter @RussellReports.