Biden’s Keystone cancellation threatens Canadian oil industry – Quartz

United States President-elect Joe Biden plans to cancel the Keystone XL pipeline permit, the fourth phase of a major oil transportation system between Canada and the United States, by executive order during its first mandate day. Canadian politicians are already voicing concerns about how this might affect the country’s economy.

The cancellation of the cross-border project was on a list of actions for its first day that was shared with US stakeholders over the weekend and ‘widely publicized’, according to news from the Société Radio-Canada (CBC).

Biden’s move on Keystone XL is one of a number of other environmental policies the new president plans to implement in his first day of work, including re-accession to the Paris Climate Agreement . President Donald Trump withdrawn from the historic initiative in November of last year.

“It’s very symbolic to cancel a project that has been in trouble for many years and has no place in the Biden administration’s view of [the US] transitioning to a clean energy future, ”said Steve Melink, founder and CEO of green energy supplier and consulting firm Melink Corporation.

The news of the cancellation is particularly painful for the provincial government of Alberta. In addition to an existing deal to invest approximately $ 1.5 billion in equity in the project as well as billions in loan guarantees, construction of the Canadian section of Keystone XL has already been underway for several months, according to on CBC News.

A complicated political history

Keystone is a multi-billion dollar pipeline system that transports Canadian crude oil to refineries, oil farms and a distribution center in the United States. It was first proposed by TC Energy Corporation, based in Calgary, in 2005. After the National Energy Board of Canada approved it in 2007, several phases were built between 2010 and 2016. The fourth phase XL, estimated at $ 8 billion, would connect the terminals in Hardisty, Alta., and Steele City, Nebraska using a shorter route and a pipe larger in diameter to transport both Canadian and American-produced oil.

The project was promoted by American and Canadian politicians as an important source of jobs and economic growth. In addition to the temporary nature of this construction work, critics and lawmakers have repeatedly raised environmental and safety concerns about possible leaks and spills, particularly in the Ogallala Aquifer, a major source of freshwater spanning eight US states, as well as higher greenhouse gas emissions.

Keystone XL was rejected in 2015 by President Barack Obama’s administration due to environmental concerns, including its controversial routing on an area known as the Sandhills, a Nebraska National Natural Site.

Trump signed a memorandum to relaunch the Keystone XL pipeline during his first week in office in January 2017, and he signed a permit granting its construction in May later that year. the valued the transportation capacity resulting from the addition of Keystone XL between the Canadian province of Alberta and the US Gulf Coast was “over 800,000 barrels per day of heavy crude.”

Canadian Prime Minister Justin Trudeau, who has publicly supported the project for several years, notably during a great american conference on energy in 2017, reiterated its support for the project during a press briefing today.

Canada has already invested a lot

Alberta Premier Jason Kenney released a statement online Jan. 17, reiterating claims Keystone was an important part of Canada-U.S. Relations and reducing the need for foreign sources of oil. He also said the province would work with TC Energy, the company that owns the pipeline, to “use all legal avenues to protect its interests in the project.”

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