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Hardisty, Alta., is the starting point of the Keystone system that has been shipping crude to the U.S. Midwest since 2010.

Jeff McIntosh/The Canadian Press

Lee Hayes and his co-worker Dave Stuart have a blunt assessment of U.S. President Barack Obama's rejection of the Keystone XL pipeline: "It sucks."

The two fiftysomething men make their living maintaining equipment in the tiny, quiet town of Hardisty, Alta., where oil sands crude was to have begun its journey along Keystone XL.

"It creates a domino effect," Mr. Hayes says of the blow to the $8-billion(U.S.) project. "Plus, the price of oil is down right now."

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Mr. Stuart agrees the nixing of Keystone XL is particularly unwelcome when the price of oil is languishing below $50 a barrel.

"It's two strikes against you before you even get going," he says.

Hardisty is the starting point of the existing Keystone system that has been shipping crude to the U.S. Midwest since 2010, Oklahoma since 2011 and the Gulf Coast since early 2014.

With the XL segment, pipeline builder TransCanada Corp. was to have provided a more direct route for 830,000 barrels a day to get to the lucrative Gulf market, jutting diagonally from the Canada-United States border across Montana, South Dakota and Nebraska.

A sea of huge, cylindrical crude storage tanks lines the horizon on the edge of Hardisty, 200 kilometres southeast of Edmonton.

In town, the parking lot outside The Leaf bar slowly begins to fill up with pickup trucks as the work day finishes.

Some patrons bristle when asked for their take on the news out of Washington. A few say they'd seen it coming for years – the project had, after all, been in regulatory limbo for more than seven years – so really nothing has changed in the town.

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A man, who's one of the few Hardisty denizens who doesn't work in oil and gas, admits he's not particularly heartbroken, because when the industry's booming, his cost of living goes up.

"The president of the United States, he doesn't understand our economy in Canada or anywhere else," says Scott Gray, who works in construction. "All he's worried about is he's appeasing his people down there so his party gets voted in. That's all he's been doing pretty well down there. It has nothing to do with economy or anything else."

Mr. Gray said it's even more important now that TransCanada's other major crude pipeline proposal – Energy East – go ahead.

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