The fate of the long-embattled 830,000-barrel-a-day conduit for Alberta oil has become a key symbol in the U.S. debate over climate and energy.The Canadian Press
Joe Biden doesn’t like the Keystone XL pipeline – that much is clear. And incumbent Donald Trump is a booster.
Still, the fate of the long-embattled conduit for Alberta oil that has become a key symbol in the U.S. debate over climate and energy won’t be settled by who wins the U.S. election, even if Americans are certain of who their president-elect is when they wake up.
The 830,000-barrel-a-day project is significantly less likely to be completed if Mr. Biden wins the White House – but it still has a moonshot sort of chance of coming into existence. The pipeline is much more likely to be built if Mr. Trump is re-elected, but it is no sure thing. The project could still be stymied by legal challenges and protests, potentially adding unworkable delays or cost overruns.
Mr. Biden has stated he’s against the TC Energy Corp. project and his campaign team said this spring he will end the project “for good" by rescinding the permit that Mr. Trump issued. In his push to win both the Democratic nomination and the White House – and to appeal to both left-of-centre and centrist voters – he won’t embrace all the tenets of the Green New Deal, the sweeping set of goals touted by the most climate-focused part of his base. But he has committed to US$2-trillion in infrastructure spending over four years with a focus on an energy transition, infrastructure and good-paying jobs.
As COVID-19 continues to disrupt the U.S. (and every other) economy, the jobs associated with building the route from Alberta through Montana and South Dakota to Nebraska might start to look pretty appealing – even if the project is in the crosshairs of many Democratic supporters. Last week, TC Energy made a point of announcing it had awarded more than US$1.6-billion worth of construction work to U.S. firms, that will mean that 8,000 unionized Americans could be working on Keystone XL in 2021. The company notes there will be lots of other spin-off work, as well.
There will be, too, a strong lobbying effort from Canada to get the project completed after the ballots are counted. Canadian political leaders will argue some work is already completed – including the 2.2-kilometre border-crossing – and that the project is not the same one that Barack Obama rejected twice. Alberta’s envoy in Washington, James Rajotte, has been emphasizing Canadian commitments to net-zero emissions by 2050 and the push for Indigenous participation.
Despite the tension between Ottawa and Alberta on a long list of issues, there seems to be at least some public accord on Keystone XL. Prime Minister Justin Trudeau, Natural Resources Minister Seamus O’Regan and Alberta Premier Jason Kenney spoke about the project last week. Mr. O’Regan later told Global News that federal support is “unwavering." In a statement, Mr. Kenney’s office said “both the Premier and Prime Minister agreed that continued Canadian advocacy for the critical KXL project was necessary regardless of the U.S. election outcome.”
Of course, TC Energy only committed fully to the US$11.5-billion project earlier this year with the promise of financial backing from the Alberta government. Mr. Kenney’s cash-strapped government borrowed money to make the investment, and is counting on the project to create jobs in Alberta, and provide a net return to the provincial treasury of $30-billion through royalties and higher oil prices over two decades. “It would send a very, very negative message should a future U.S. administration cancel a project that is partially owned by a Canadian government,” the Alberta Premier said last month.
The federal Liberals will likely have a better relationship with a Biden Administration than with a Trump White House, given their similar world view. Still, the pipeline might be one of an array of areas – think of strong Buy American provisions likely to be enacted by Democrats – where the two countries may find their interests diverge.
On the other side, the Canadian-backed project is not a slam-dunk if Mr. Trump wins re-election. While the sitting Republican President made approving Keystone XL one of his first moves after his inauguration in early 2017, local protests and legal wrangling that have kept the project in limbo for more than a decade have continued throughout his time in office.
Earlier this year, a U.S. court said a nationwide permit issued by the U.S. Army Corps of Engineers that allowed pipelines to cross water bodies failed to adequately consult on risks to endangered species and habitat. The decision effectively barred TC Energy from putting any pipe in the ground for Keystone XL, and the company acknowledged it could delay the project – set to be completed in 2023 – by up to one year.
TC Energy is hoping for resolution in its favour, and hopes it will be able to proceed with pipe construction in 2021. But even if that legal hurdle is overcome, there will be continued opposition from some groups of U.S. landowners, environmentalists and Indigenous communities.
Like other major oil pipeline projects in an age where costs and scrutiny of such projects is high, nothing is certain. That will be true no matter who is the president.
Kelly Cryderman