U.S. President Joe Biden revoked the permit for the Keystone XL pipeline within hours of taking office on Wednesday, using an executive order to bring an end to a controversial project that had been on and off for more than 12 years.
Prime Minister Justin Trudeau expressed disappointment at the news in a statement, but used the rest of his response to try to move beyond this disagreement, saying he looks forward to working with Mr. Biden to fight climate change and COVID-19, and to create jobs.
“While we welcome the President’s commitment to fight climate change, we are disappointed, but acknowledge the President’s decision to fulfill his election campaign promise on Keystone XL,” Mr. Trudeau said.
Mr. Biden’s spokesperson, Jen Psaki, said the President will phone Mr. Trudeau on Friday to talk about Keystone and other topics. It will be his first call to a foreign leader.
Late Wednesday, Alberta Premier Jason Kenney called on Ottawa to impose significant trade and economic sanctions on the United States, as it did when the Trump administration imposed tariffs on Canadian aluminum and steel. “Not doing so would create a dangerous precedent,” Mr. Kenney said.
He said the Prime Minister and cabinet appear to have accepted the decision with only mild expressions of disappointment. He said it doesn’t line up with private conversations he’s had with federal officials.
“This is a gut-punch for the Canadian and Alberta economies,” he said, noting that 2,000 construction workers have already been laid off.
Mr. Kenney said he has no regrets about his government’s investment in the pipeline – otherwise the project would have died last year. He added he was elected to fight for oil pipelines and market access.
The Premier added that his government will do a close legal analysis of the wording on the executive order signed by the U.S. President, and – if the project is truly done – pursue “every legal means at our disposal” to seek compensation.
“We do believe Alberta would have a strong case to make,” he said.
Construction on the Canadian-owned Keystone XL pipeline was suspended earlier in the day after the transition team for Mr. Biden, who was sworn into office at noon ET, confirmed in a press release that he would tear up the permit former president Donald Trump granted. The statement described it as one of several environmental actions by the departed president that “do not serve the U.S. national interest.”
Mr. Biden campaigned in 2020 on a promise to shut down Keystone XL, which would have run 1,947-kilometres and shipped 830,000 barrels of crude a day from Alberta to the U.S. Midwest and Gulf Coast.
Calgary-based TC Energy Corp., co-owner of Keystone XL with the Alberta government, said in a statement it was “disappointed” and that Mr. Biden’s decision overturns an “unprecedented, comprehensive regulatory process that lasted more than a decade and repeatedly concluded the pipeline would transport much-needed energy in an environmentally responsible way while enhancing North American energy security.”
The statement said the company will review the decision and consider its options.
The end of the project would leave Alberta on the hook for as much as $1.5-billion.
Mr. Biden promised last May to kill Keystone, calling it “tar sands we don’t need” in an interview with CNBC. U.S. critics, including many in the Democratic Party’s base, said the pipeline would encourage more energy-intensive extraction of crude from Canada’s oil sands, which was incompatible with plans to reduce carbon emissions.
Mr. Trudeau, Mr. Kenney and the industry had hoped Canadian officials could meet with U.S. Energy Secretary Jennifer Granholm before Mr. Biden made his decision and make a case for the pipeline.
Ending Keystone was made a litmus test of environmental commitment by U.S. climate activists. Former president Barack Obama opposed the pipeline in 2015.
Following through on that promise is among the steps Mr. Biden’s team said would “address the climate crisis, create good union jobs, and advance environmental justice, while reversing the previous administration’s harmful policies” that “do not serve the U.S. national interest.”
TC Energy said on Wednesday halting the project will mean job losses for thousands of workers, and damage efforts toward sustainability in the energy sector, including its own pledge to power the pipeline with renewable energy by 2030.
The U.S. Chamber of Commerce also criticized the permit revocation, with Marty Durbin, president of its Global Energy Institute, calling the decision politically motivated and not grounded in science. “The pipeline – the most studied infrastructure project in American history – is already under construction and has cleared countless legal and environmental hurdles. … Halting construction will also impede the safe and efficient transport of oil, and unfairly single out production from one of our closest and most important allies.”
BMO Capital Markets analyst Ben Pham said the early decision by Mr. Biden has a silver lining in that “investors are hearing this sooner rather than later.” He said the result leaves TC Energy “without large-scale project risk” and an improved balance sheet.
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