A rocky start to Canada-U.S. relations? TC Energy suspends work on pipeline
Incoming U.S President Joe Biden has said one of his first acts will be to revoke approval for the Keystone XL pipeline expansion project. This has caused great consternation in Canada, and especially in the oil-rich province of Alberta.
“”” UPDATE: President Biden has signed an executive order which revokes the permit for the pipeline
Like all fossil fuel pipelines in recent years, Keystone has been involved in long and bitter debates pitting the economy against the environment, even as the company says many environmental efforts have been or will be included and that the pipeline will be ‘net zero’ in emissions by 2023.
First proposed in 2008, the on again, off again, project approved under outgoing President Trump, would see Alberta oil shipped south to join an existing line at Steele City Nebraska, then to tank farms in Cushing Oklahoma, and eventually end up at Texas refineries on the gulf coast. While a pipeline currently exists, the Keystone expansion of some 2,700 kilometres of new pipe, would increase capacity by 830,000 barrels per day.
The recent reiteration of Biden’s plan to cancel the multi-billion dollar project has upset Alberta’s Premier Jason Kenney as it represents a huge setback for the province financially and in terms of jobs in the already hurting oil sector.
Noting that Canada is the Americans long standing ally and biggest trading partner, he is concerned that Biden did not consult with either himself or the Prime Minister about his position on cancelling the project. This week Prime Minister Justin Trudeau said he had raised the issue with President-elect Biden in direct conversations a few weeks ago.
Kenney has put forward the argument that without the line, oil will be shipped by more polluting and dangerous methods by truck and rail, and that U.S refineries will have to import more oil from less reliable sources such as Saudi Arabia, and other sources. Proponents of the pipeline say these sources also have less regard for the environment in extracting and processing oil and would also involve greater emissions from tanker shipments.
Kenney says, “All we ask at this point is that president-elect Biden show Canada respect to actually sit down and hear our case about how we can be partners in prosperity, partners in combating climate change, partners in energy security”.
Alberta has invested some $1.5 billion in the partially completed line and Kenney suggests that besides the loss of many thousands of jobs in both countries, killing the project would open the U.S. to damages under the U.S-Mexico-Canada free trade agreement and international rules. When asked if he would support potential legal action, Bloomberg News says Trudeau dodged the question saying that he and Canadian officials in Washington would continue to put forward Canada’s position.
It remains to be seen if the arguments from proponents can sway the incoming administration which may make the decision as early as today.
Reports say TC Energy has suspended all work on the pipeline today in anticipation of Biden revoking their permit.
- Keystone XL- website
- Edmonton Journal: D Staples: Jan 20/21: kenney’s big mistake: plus other winners and losers of Keystone XL fiasco
- AP: R Gillies: Jan 18/21: Canada urges Biden not to cancel oil pipeline on first day
- Washington Post: A Coletta: jan 20/21: Biden’s plan to cancel Keystone pipeline signals a rocky start with Canada
- CBC: Jan 17/21: A look at the history of the Keystone XL pipeline expansion
- Canadian Press (BNNBloomberg): Jan 19/21: Trudeau vows to push U.S. on merits of Keystone XL
- Canadian Press (CTV): Jan 18/21: TC Energy plans net zero emissions for Keystone XL even as project’s future in doubt
- Capital Journal: C Junkins: Oct 20/20: After years of contention, Keystone XL awards $1.6 billion to American construction firms