Many regions across Alberta have felt the impact of the crude oil price collapse since 2014, but many regions have also responded by continuing to build strong investment opportunities.
The Town of Hardisty is a good example of that. In this community of 554 people, it’s the tank farms and crude oil terminals that serve as the backbone of economic activity and job creation.
Enbridge and Gibson Energy are the major operators of tank storage in this prairie landscape of east-central Alberta, about 200 kilometres southeast of Edmonton.
No less than 10 pipelines bring crude oil into Hardisty, while four others send it out to markets across Canada and the United States. Some of those inbound pipelines originate in the oil sands region near Fort McMurray, more than 500 kilometres away in northeast Alberta.
“There are four pipelines that go straight into Hardisty from Fort McMurray and any increased volumes of oil moving on those pipelines helps not only Hardisty but the whole region,” says Arnold Hanson, chair of Battle River Alliance for Economic Development (BRAED), noting that increased inflows of crude also creates inflows of jobs with the tank farm operators. Gibson Energy, for example, hires a number of contract operators to run their tanker-trailers in support of the terminal operations.
Gibson is aggressively expanding those terminal operations at Hardisty as oil sands production continues to grow, despite the lower crude prices. Its latest project is the addition of three new tanks, which will add 1.1 million barrels of storage capacity. Two of the tanks, each 300,000 barrels, are underpinned by a long-term, fixed-fee contract with a large oil sands producer. The third tank, at 500,000 barrels, will service terminal operation needs.
“Our Hardisty terminal continues to demonstrate its commercial competitiveness and this contract affirms the ongoing demand for our strategic storage infrastructure in support of incremental oil sands brownfield development,” Gibson president Steve Spaulding said in a statement.
The terminals operated by Gibson Energy, Enbridge, TransCanada and others help put Hardisty on the map.
“When tanks are being added, we’ll usually see an influx of about 100 workers over the course of the project,” says Sandy Otto, chief administrative officer for the Town of Hardisty. “And big projects, like when Enbridge added 19 tanks over three years or so, pushed our shadow population to 1,200.”
“There are four pipelines that go straight into Hardisty from Fort McMurray and any increased volumes of oil moving on those pipelines helps not only Hardisty but the whole region.”
– Arnold Hanson, chair of Battle River Alliance for Economic Development
Those projects add an economic boost to the entire town, with some workers staying at hotels and campgrounds, others at an Enbridge-built work camp in town, and all of them supporting local businesses for the duration of the project.
Ben Brunnen, vice-president of oil sands for the Canadian Association of Petroleum Producers, says oil sands development will continue to contribute to Alberta’s economy over the next several years, with production expected to hit 3.7 million barrels per day by 2030 from about 2.4 million barrels per day today.
“We will see growth, and a lot of that growth is coming because of existing investments in the oil sands,” he says. “We will see production growth from long lead time mining projects, but we will also see some additional investment in SAGD [steam-assisted gravity drainage] areas where they are stepping out production of a known reservoir.”
All of that oil sands investment, he says, trickles down throughout the province — an estimated 20,000 Alberta companies form part of the supply chain — and helps economic regions like BRAED and communities like Hardisty.
“One of the biggest drivers of activity right now is the trucking industry, because most of the oil produced around here is hauled to Hardisty and the tank farms there by truck,” says BRAED’s Hanson. “That’s a big thing because it spills o into mechanical services and even some soft custom services and our region needs that.”