In the midst of a global health crisis, Premier Kenney has announced that the government of Alberta will subsidize construction of the Keystone XL pipeline, prioritizing the expansion of the oil and gas industry even over its own healthcare system. This $7.6 billion gift to one pipeline company is a reckless use of public money that could be better spent supporting physicians and workers across the province. The price of oil dipped below $6 last week, yet with this move the Alberta government is further increasing its exposure to an oil market in free fall.
Now is not the time to be further betting on the ongoing expansion of an industry that must become smaller to ensure a climate-safe future. It is the time to be putting in place a recovery program with measures to hasten a just transition for workers in the sector. Furthermore, starting construction during the COVID-19 pandemic is irresponsible, as worker camps and nearby communities are showing signs of being particularly at-risk from virus outbreaks, and could place undue strains on rural health systems.
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Alberta Premier Jason Kenney has just announced that it will provide $1.6 billion to the company TC Energy for the construction of its Keystone XL pipeline, to cover construction costs through the end of 2020. In addition, the government of Alberta will guarantee a $6 billion loan for the project, which is now expected to cost over $14 billion to build. All-in-all, the province will have $7.5 billion in total exposure to this single project. (TC Energy to proceed with Keystone XL pipeline after US$1.1 billion investment from Alberta government)
The Keystone XL pipeline – which has already been delayed by over a decade – would not be ready for years, if ever. If completed,the pipeline is expected to ship 830,000 barrels of crude oil per day to the U.S. Gulf Coast, which is home to the largest concentration of heavy oil refineries. The project still faces significant nationwide opposition in the US because of the threat it poses to clean water and the climate. The pipeline still has pending regulatory approvals and legal challenges from Indigenous groups, environmental groups and communities along its nearly 2000 km route from Alberta to the U.S. Gulf Coast. (Keystone XL faces significant nationwide opposition)
Health and Education Funding in Comparison
- The government of Alberta had pledged a fraction of this amount – $500 million – for health care costs during this global pandemic.
- The Alberta government terminated its existing contract with physicians in February, resulting in a system that doctors believe will make it more difficult to treat patients, particularly from vulnerable communities. Changes to healthcare funding have also resulted in more than 400 community clinics either closing or laying off staff. (Hundreds of doctors send letter to Alberta government over proposed changes)
- The province announced a $128 million cut to K-12 education, which will result in 25,000 education workers being temporarily laid off in April, de-railing plans for at-home and remote education. (Alberta education cut expected to lay off thousands during pandemic)
Risk to Workers and Communities from Rapid Construction Timeline
Premier Kenney announced that construction on Keystone XL is slated to begin as soon as April 1. At a time when only essential businesses are allowed to operate continuing construction for infrastructure that won’t be built for many years is an unnecessary risk for workers and nearby communities. Other pipeline projects are experiencing safety issues related to the virus at their worker camps, where practicing social distancing is difficult and workers frequently rotate in and out from an area. Health officials are warning that the thousands of workers brought to these work camps could overwhelm local medical systems, and unions are calling for projects to be tooled down to all but essential work. (BC’s work camps stay open despite pandemic risks)