Skip to main content

Such a decision would effectively stop the project, even as TC Energy Corp. – the Calgary company behind the project – said Tuesday that pipeline construction across the U.S.-Canada border is already completed.Alex Panetta/The Canadian Press

Alberta Premier Jason Kenney is continuing to champion his government’s multibillion-dollar bet on the Keystone XL pipeline even as U.S. presidential candidate Joe Biden’s campaign pledged to kill the project if the former vice-president wins the November election.

Saying the direct route to U.S. Gulf Coast refineries is key to getting better prices for the province’s heavy oil production, Alberta invested US$1.1-billion in pipeline construction this year and pledged billions of dollars more in project loan guarantees. On Monday, it was driven home that the pipeline’s fortunes are tied to the outcome of the U.S. presidential race, as an official with Mr. Biden’s campaign told Politico they would rescind U.S. President Donald Trump’s permit that allows the Keystone XL pipeline to cross the border into the United States.

Such a decision would effectively stop the project, even as TC Energy Corp. – the Calgary company behind the project – said Tuesday that pipeline construction across the U.S.-Canada border is already completed.

On Tuesday, Mr. Kenney said he’s disappointed with Mr. Biden’s position. But the uncertainty around the project is the reason why the province stepped in with a financial investment in the first place. TC Energy would not have started construction this year without government backing. The Premier said he hopes the jobs associated with the project, the promise of secure heavy oil supply to U.C. refineries, and on-the-ground project work already completed will prevail with the next U.S. president.

“I am that hopeful whoever the president of the United States is in February of next year will see substantial progress in the project,” Mr. Kenney said, referring to a presidential inauguration that would take place in late January, 2021.

"We believe this is the right call.”

The 830,000 barrel-a-day pipeline got a muted defence from Prime Minister Justin Trudeau on Tuesday. The federal government, he said, will work with “whatever government gets elected in the United States to impress upon them how important Canada is as a secure and reliable supply of energy that they require even as we move forward toward a different future.”

But even a partly completed pipeline could be deconstructed by a president opposed to the US$11.5-billion project, according to a professor of energy law.

James Coleman of the Southern Methodist University’s Dedman School of Law said if Mr. Biden wins, he can get TC Energy to remove portions of the pipeline already construction. The presidential permit gives the president “unreviewable authority" over border crossings for pipelines. "It doesn’t apply just to new pipeline crossings; it also applies to old ones.”

Mr. Biden has the power to say “dig up your steel and take it home with you.”

Mr. Biden’s campaign said he will follow in the footsteps of former U.S. president Barack Obama, who quashed the project in November, 2015. The project was revived by Mr. Trump as one of his first acts of office in 2017.

Prof. Coleman, whose academic focus is the scrutiny of energy production and transport, said Mr. Biden has been more vocal about his concerns over the environmental effects of oil and gas than Mr. Obama – and has said he will ban new fracking, and oil and gas permitting on public lands and waters.

Although Mr. Biden hadn’t previously stated a specific position on Keystone XL, Prof. Coleman said he can’t imagine that the Alberta government and TC Energy are surprised by the news.

In March, Alberta announced that it would invest US$1.1-billion in the pipeline, a project that will move oil from Hardisty, Alta., to Steele City, Neb. – piecing together an oil transportation system that will give the province a route to the large concentration of refineries on the U.S. Gulf Coast. The initial investment was meant to cover planned construction costs to the end of this year.

Alberta also announced it will guarantee US$4.2-billion of debt related to the 1,947-kilometre pipeline. The government justified the investment by saying it will mean Canadian producers will be able to net better prices for their oil. Mr. Kenney also says the pipeline acts as a rebuke to Saudi Arabia and Russia, whose price war earlier this year further hurt oil prices and stung North American crude producers already reeling from the drop in demand because of the novel coronavirus pandemic.

On Tuesday, Mr. Kenney said the loan guarantees wouldn’t come into use if the project is cancelled by a Democratic president early next year, as they do not get triggered until the 2021 construction season. The Alberta government and TC Energy will make an assessment in late January, he said.

“So those $6-billion in loan guarantees are not at risk,” the Premier told reporters, referring to the value in Canadian dollars.

Alberta NDP Leader Rachel Notley said she understands the economic importance of getting pipelines built. However, she said she’s concerned there hasn’t been financial transparency from Mr. Kenney’s United Conservative Party on the deal that saw the Alberta government take up to $7.5-billion in financial risk, to try to get Keystone XL built.

“I don’t think Albertans have ever been asked to risk that much money on one project," Ms. Notley said.

Our Morning Update and Evening Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.

Report an error

Editorial code of conduct