The deal that will see the Alberta government make a $7-billion financial commitment to the Keystone XL pipeline project will “in no way be a distraction” to the province’s ongoing efforts to combat the COVID-19 crisis, Premier Jason Kenney said Tuesday.

Kenney told reporters the newly announced deal — which will see the Alberta government take a $1.5-billion equity stake in the project as well as provide a $6-billion loan guarantee to ensure pipeline company TC Energy is able to finance construction costs — was six months in the making. He said it was nearly finalized when the novel coronavirus made its first appearance in the province in early March.

But while the initial aim of the government’s investment was to ensure the completion of Keystone and give Alberta’s struggling energy sector critical access to markets, it is now hoped it will also help boost an economy reeling from the unprecedented economic effects of COVID-19, Kenney said.

“The current crisis calls for dramatic action now,” Kenney said. “(This project) will rescue the future of our energy industry and power our country out of the COVID economic crash.”

According to the government, the Keystone XL pipeline project — which is set to begin construction immediately for a summer 2023 commissioning date — will create 1,400 direct high-paying jobs in Alberta, and 5,400 indirect jobs.

It will also boost investor confidence in Alberta’s oil and gas sector, leading to increased production and an additional $30 billion in royalty revenues for the Alberta government over a 20-year period, Kenney said.

The news of the government’s investment in Keystone was applauded Tuesday by the Business Council of Alberta, which called it “welcome news at a time of nothing but bad news.”

Business Council president Adam Legge said just as there was a case for the federal government to acquire a stake in the Trans Mountain pipeline project, there was a need for public sector participation to make Keystone XL a reality.

“Sometimes these massive infrastructure projects do need government to take on some additional risk position to make the project a final go,” Legge said. “It’s also job creation at a time when many, many people are unemployed.”

Image: Calgary Herald