The Waterton Complex – An Economic Driver for Over Half a Century

The Waterton Complex, a natural gas production and processing facility located in rural southwest Alberta, has been a major driver of the economy of Pincher Creek and the surrounding region for over 60 years. Through direct, indirect, and induced employment, as well as the procurement of goods and services and payment of taxes, the development and ongoing operation of the Waterton Complex has generated and continues to generate significant economic value in local and regional communities. The income created by the Waterton Complex enables municipalities to provide infrastructure and other services, reduces the property tax burden for other ratepayers, and supports many families and businesses.

Photo Credit: © Rod Sinclair

In 2015, Shell Canada, the owner and operator of the Waterton Complex since its beginning in 1957, publicly announced that downsizing and eventual closure of its Waterton Complex would likely occur in 10 to 15 years, as natural gas reserves within the Waterton field are depleted. Closure could come sooner depending on economic conditions and market trends.

Coming to an End – What Does it Mean?

Recognizing that closure of the Waterton Complex could have significant economic and social ramifications, the Southwest Alberta Sustainable Community Initiative (SASCI) embarked on a multi-year initiative to support our region’s communities in transitioning smoothly to a future without the Waterton operations. We began by contracting an experienced independent consultant – Nichols Applied Management Inc., located in Edmonton, Alberta – to assess the economic and social impacts of the approaching facility closure. The socio-economic impact assessment was completed in late 2018, and the findings are sobering:

• Upon facility closure, annual GDP in the region will decline by $34 million compared to today.
• Tax revenues to the Municipal District of Pincher Creek will decline by over 20%.
• An estimated 265 high-paying full-time equivalent jobs will be lost at the facility and at local businesses, affecting 8% of the current local labour force.
• As many as 650 people could leave the region as workers and their families relocate to new jobs, affecting up to 9% of current local housing stock.

Since the publication of the socio-economic impact assessment, Shell Canada announced its intention to sell the Waterton Complex to Pieridae Energy; that sale was completed in October 2019. While Pieridae has indicated it intends to continue to operate the Waterton Complex, the operating life of the facility is still limited by the finite life of the gas reserves. That is, closure of the Waterton Complex is a matter of when, not if. The economic and social impacts of eventual facility closure will be felt throughout the region. At the same time, global shifts in the energy sector, driven in part by efforts to address climate change, also bode significant disruption.

A Unique Opportunity

Often, when a major industry or employer leaves a community, it tends to happen rather suddenly: recall when General Motors announced in November 2018 that it would close its Oshawa assembly plant by the end of 2019, putting nearly 3,000 people of out of work. In contrast, by announcing the potential closure of the Waterton Complex years in advance, Shell has given our community a unique opportunity to proactively plan for our future.

SASCI’s socio-economic impact assessment gives us fact-based evidence about the magnitude and scope of the potential impacts of the loss of this significant economic driver. Now, with that information in hand, SASCI will be turning its mind – as well as its expertise in community engagement, collaboration, capacity-building, and facilitation – to advancing diversification and resilience in the community. Our goal is to rally the community and put our collective energy, ingenuity, and entrepreneurship to work in shaping the economic future of our region.

We look forward to working with you.

To download the socio-economic impact assessment report, click here.

To download the Executive Summary of the socio-economic impact assessment report, click here.

If you are interested in participating, please contact the SASCI office and let us know, or follow us on Twitter (@sascidotca), Facebook, or LinkedIn to receive more information about our upcoming community engagements.

This project has been made possible by the generous financial support of Shell Canada, the Alberta Real Estate Foundation, and the Town of Pincher Creek. SASCI is grateful for their support. We also thank the many people in our communities who contributed time, attention, and information to the socio-economic impact assessment. Finally, we thank Nichols Applied Management Inc. for their professionalism in conducting the assessment and preparing the report.