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A TransCanada's Keystone pipeline facility in Hardisty, Alta. on Nov. 6, 2015.

The Canadian Press

Alberta Premier Jason Kenney invested US$1.1-billion of taxpayer funds to gain a stake in the Keystone pipeline expansion project this year because he doesn’t trust Prime Minister Justin Trudeau to stick with the completion of the Trans Mountain pipeline Ottawa bought in 2018, he revealed Thursday.

Mr. Kenney has long claimed the federal Liberals want to destroy Canada’s oil and gas sector, even after the federal government bought the Trans Mountain expansion, referred to as TMX, from then-owner Kinder Morgan. But this is the first time he has attributed the province’s investment in Keystone to his belief Mr. Trudeau’s government will not follow through on Trans Mountain construction.

“I was not prepared to put all of our eggs in the basket of the Justin Trudeau-owned pipeline," Mr. Kenney told conservative blogger and podcaster Cory Morgan. Buying into Keystone instead, he said, “was an essential hedge against that political risk."

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Mr. Kenney’s comments, posted online Thursday, underscore the increasingly combative stand his United Conservative government has taken with Ottawa.

The Alberta government announced in March it would contribute US$1.1-billion to the Keystone expansion, which is owned by Calgary-based TC Energy Corp. It will also guarantee US$4.2-billion of debt related to the 1,947-kilometre pipeline, which will ship 830,000 barrels of crude a day to from Hardisty, Alta., to Steele City, Neb., giving Alberta oil companies a new route to refineries on the U.S. Gulf Coast.

The Premier said at the time the deal was Alberta’s “last chance to get a major pipeline project done." Without it, he said, "the future of our largest industry will be compromised.”

The contentious project has faced an array of delays and legal challenges in the decade since TC first applied to regulators in Canada and the U.S. to build it. The latest potential roadblock is U.S. president-elect Joe Biden, who pledged during the election he would cancel the pipeline’s presidential permit for construction.

And while Mr. Kenney congratulated Mr. Biden in a Sunday news release on the Democrat’s victory, he also said that U.S. energy security “is dependent on Alberta as the United States' largest source of oil imports," adding "much of the American economy is fuelled by Alberta energy.”

He said his government will work with the new administration “to ensure that this vital economic partnership continues,” but noted during the podcast he expects Canada’s federal government to pitch in with that effort.

To do that, he said the province needs “leverage” over Ottawa - part of the reason his government plans to next year hold a referendum on removing equalization from the Constitution, rather than have the vote this year, he said.

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“Justin Trudeau owns and controls the Trans Mountain pipeline. We need to have some kind of leverage to ensure that they enforce the rule of law when the war of the woods starts on TMX,” he said, referring to protests that have interfered with pipeline construction in the past.

Ian Cameron, press secretary to Natural Resources Minister Seamus O’Regan, said in an e-mail the federal government “fully supports the Trans Mountain Expansion and Keystone XL projects, both of which are under construction and have created over 7,000 well-paying jobs in Canada.”

Mr. Kenney also took a swipe at Michigan’s Governor, Gretchen Whitmer, and its Attorney-General, Dana Nessel, calling them “brain dead” over the state’s legal challenge in the summer to try and decommission the Enbridge Inc. Line 5 oil pipeline.

The pipeline ships 540,000 barrels a day of light crude oil and propane under the Straits of Mackinac in the Great Lakes. It’s a critical part of Enbridge’s Mainline network, which delivers the bulk of Canadian crude exports to the U.S. Enbridge closed the pipeline in June after discovering its anchor support had shifted from its original position. In September, it received court approval to restart the eastern segment of Line 5.

“There’s been a very hot legal political dispute there,” Mr. Kenney said. “I mean, how brain dead do you have to be to try to shut off your largest source of energy?”

- With a report from Reuters

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