Trans Mountain pipeline ushers in new economic era for Alberta's oilsands city

As the urban centre at the heart of Canada's oilsands industry, Fort McMurray has seen more than its share of ups and downs.

A decade and a half ago, the northern Alberta community was this country's most famous boom town. High oil prices helped to drive unprecedented demand for the thick, viscous bitumen that lies beneath the earth's surface here, and workers flocked from around the world to cash in on the bonanza.

Then crude prices crashed, layoffs began, and the frenzy of oilsands-related construction dried up. The party, it seemed, was over.

Now, with the official opening of the long-awaited Trans Mountain pipeline expansion just days away, those who live and work in this region hope their fortunes are once again headed for an upswing.

Fort McMurray, population 68,000, is situated in northern Alberta in the heart of the Athabasca oilsands, the world's third-largest proven crude oil reserve.

The oil industry permeates every aspect of life here. Every morning, oil workers clad in blue-and-yellow coveralls line up at the local Tim Hortons for double-doubles, and diesel trucks and big rigs churn up dust on their way out to industrial work sites. The airport gift shop sells "Canada's Oilsands" sweatshirts and local rec centres and educational facilities are emblazoned with the names of their oil company sponsors.

With so many livelihoods dependent on oil, all eyes here are on the expected opening this week of the Trans Mountain pipeline expansion, a years-in-the-making megaproject which will soon start shipping Canadian crude to export markets.

"It's hard to quantify the value of the ... pipeline to a region like ours," said Dennis Vroom, senior strategic adviser for the regional municipality of Wood Buffalo, which encompasses Fort McMurray and the surrounding rural area.

"We are so heavily supported by oilsands operators in the region, that when things that are important to them — like the Trans Mountain pipeline — happen, there are direct benefits to us. What supports them, supports us."'

The Trans Mountain pipeline, which was bought six years ago by the federal government, is Canada's only oil pipeline to the West Coast. The expansion will increase its capacity from approximately 300,000 barrels per day currently to 890,000 barrels per day, improving access to export markets for Canadian oil companies.

The path to get here hasn't been rosy. The pipeline project, which took more than four years and at least $34 billion to construct, has been marred by environmental protests, delays and budget overruns.

The federal government, which paid $4.5 billion for the project in 2018, is likely to take a significant writedown when it tries to sell the completed project, experts say. And Trans Mountain itself remains locked in a dispute with its oil company customers about the rising fees it wants to charge them to ship their product.

Still, oilsands producers have been waiting for this pipeline for a long time. Export issues have been a thorn in the side of Canadian energy companies for years, due to a lack of pipeline capacity from Alberta's oilsands region to coastal tanker loading facilities.

That shortage of pipeline space, combined with refinery and transportation costs, is the reason Canadian oil producers typically take a price discount on their product compared with their U.S. competitors.