The scrapping of Keystone XL is devastating for Alberta – and Jason Kenney

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When TC Energy ran into problems finding prospective partners for its Keystone XL pipeline project, alarm bells should have sounded in the government of Alberta Premier Jason Kenney.

Why was it so difficult to convince investors of the lucrative promise of this long-planned enterprise? Sure, the price of oil was low, but most industry prognosticators expected it to return to, if not gloriously new heights, at least semi-profitable ones.

Still, no one wanted any part of it.

Instead of taking his cue from nervous energy investors, Mr. Kenney made one of his boldest gambles since coming to office in 2019: placing a $1.5-billion bet (with taxpayer dollars) behind TC Energy and Keystone. Yes, the same Keystone XL that U.S. president-elect Joe Biden plans to promptly kill on his first day in office Wednesday, according to reports.

Now Mr. Kenney is pleading for understanding, suggesting that out of respect for his country’s closest ally, Mr. Biden owes Canada a hearing on the matter. I hope the Premier doesn’t plan on holding his breath until he gets one.

There is no sugar-coating just how devastating this is for Mr. Kenney, his government and the province. Keystone would have carried 830,000 barrels of crude a day from Hardisty, in east-central Alberta, to Nebraska and eventually to refineries on the Gulf Coast. It represented billions in royalty revenues to the Alberta treasury. It also represented a ray of hope at a time when they are difficult to find in the province.

Instead, it’s just another punch to the gut. One Mr. Kenney might have worried was coming if there was a change in government after the November, 2020, U.S. elections.

Several Democratic candidates for the presidential nomination campaigned on a promise to cancel Keystone, including Mr. Biden. As president, Mr. Biden is putting climate change atop his domestic agenda and Keystone does not fit into that. It was also a key promise to the influential environmental wing of the Democratic party. There is no way he will renege on that pledge.

Why Mr. Kenney would have sunk $1.5-billion on a dicey proposition ahead of the U.S. election, and with an unstable and unpopular President in office, is bewildering and was grossly irresponsible. The Premier suggested at the time that if the province didn’t step in, then Keystone would not likely get built. Again, all the more reason to take a step back, not forward.

The Premier is an intelligent person with an impressive political resume. But some of the decisions he’s made in the past two years are beyond perplexing. He’s actually hoping to get a meeting with Mr. Biden to sell him on all the wonderful things Alberta is doing in the name of climate change.

I’m just guessing that if such a meeting were ever to occur, he would not bring up the fact he vociferously fought Ottawa on the carbon tax or that his government, upon taking office, rolled back many of the environmental protections put in place by the previous NDP government. But do go on, sir, about the many ways in which you’re helping save the planet.

Mr. Kenney is already talking about ways in which the province might be able to recoup some of its Keystone investment, suggesting, for instance, that some of the pipeline that has already been built could be sold for parts. Yes, maybe Ottawa could use them to finish the Trans Mountain pipeline expansion.

It would be funny if it weren’t so tragic.

One thing Mr. Kenney won’t be able to do here is blame this fiasco on Prime Minister Justin Trudeau. His representative in Washington, Ambassador Kirsten Hillman, has spent months lobbying lawmakers there on the merits of the project, saying innovation has helped reduce emissions from the oil sands significantly. She argued that this version of Keystone was much improved over the one former president Barack Obama vetoed in 2015.

It didn’t make a difference.

I doubt that Mr. Trudeau is going to expend a lot of political capital arguing with Mr. Biden over a decision that is a fait accompli. It would be pointless.

Where Mr. Kenney turns now is anyone’s guess. I would not be surprised to see him pivot toward more pipelines in Canada, perhaps putting pressure on the Prime Minister to revive the Energy East, even Northern Gateway, knowing full well Mr. Trudeau will champion neither.

But at least it would allow Mr. Kenney to do what he’s done best since coming to office: blame Mr. Trudeau for any problem that has beset his province, while taking no responsibility at all for decisions he’s made contrary to Alberta’s vital interests.

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