Keystone Rejection Tests Trudeau’s Balancing Act on Climate and Energy

OTTAWA — One in every of President Biden’s first acts upon taking workplace was to cancel the allow for the Keystone XL pipeline, the long-debated undertaking to move crude from Canada’s oil sands to the US.

However Prime Minister Justin Trudeau and elected officers in Alberta, the Canadian province the place the pipeline originates, usually are not giving up so quick.

The practically 1,200-mile Keystone XL was supposed to hold crude oil from Canada to Nebraska, the place it will join with an present community to ship the crude to refineries on the Gulf of Mexico.

In canceling the pipeline, Mr. Biden took a few of his first steps towards reversing the legacy of the Trump administration, which revived the undertaking after it was rejected by President Barack Obama in 2015.

Mr. Trudeau has lengthy supported the pipeline as a part of his effort to steadiness his precedence to struggle local weather change with supporting Canada’s power trade in Alberta and in different western provinces.

Even earlier than Mr. Biden’s announcement, the premier of Alberta despatched out an announcement saying he was going to object to it, and vowing authorized motion.

“That is about extra than simply Keystone XL,” mentioned the premier, Jason Kenney, an usually fierce Conservative critic of Mr. Trudeau’s Liberal authorities. “That is concerning the Canada-U.S. relationship, that is about tens of hundreds of jobs right here, that is about billions of {dollars} of income for governments to pay for issues like well being care.”

Canada exports about 80 p.c of its oil to the US, most of it coming from the oil sands, which, together with the power trade, are vital to Alberta’s economic system. Even through the present oil value stoop, the sector offers about 140,000 jobs and, earlier than the collapse of oil costs, royalties from the oil and fuel trade made up about 20 p.c of Alberta’s price range.

The oil trade had pushed for improvement of the pipeline in hopes {that a} direct path to the Gulf of Mexico, the place refineries are outfitted to course of the heavy, low-grade oil from the oil sands in Canada’s inside, would remove delivery bottlenecks and decrease costs, mentioned Andrew Leach, an power and environmental economist on the College of Alberta in Edmonton.

However the pipeline undertaking was closely opposed by environmentalists, American farmers and ranchers, in addition to Indigenous teams in the US who feared it will alter and possibly harm their lands.

“President Biden’s resolution to reject Keystone XL on his first day signaled a brand new period,” mentioned Anthony Swift, the director of the Canada Venture on the Washington-based Pure Assets Protection Council, an environmental group lengthy vital of the oil sands.

“New fossil gas improvement tasks are going to be positioned below some form of a local weather check that assesses whether or not these tasks are in step with our worldwide local weather targets,” Mr. Swift added.

American environmentalists additionally focused the pipeline as a part of their effort to close down the oil sands, which they are saying is a very soiled power supply. However even with the demise of Keystone, that effort appears thwarted.

There are quite a few pipelines between the 2 international locations, along with railways, by way of which Canada sends oil to American refineries. And two different Canadian pipelines serving the US are at present being expanded, making it possible that manufacturing within the oil sands will proceed.

Nonetheless, the query, Mr. Leach mentioned, is whether or not these different pipelines are additionally targets of the brand new U.S. administration: Is Mr. Biden “saying principally we don’t need cross-border pipelines, or we simply don’t need this specific pipeline?”

One of many pipelines at present being expanded is within the Midwestern United States. One other hyperlinks the oil sands to a port in British Columbia that may serve refineries on the US’ Pacific Coast by ship and which additionally has a spur line to Washington State. Each have been focused by protests.

There may be one other pipeline — operating from Western Canada by way of the Midwestern United States — whose allow Michigan has proposed revoking for environmental causes, a transfer that might choke off a lot of the pipeline’s route.

Mr. Biden’s announcement to cancel the Keystone XL fulfilled a promise he had repeatedly made on the marketing campaign path as a part of his climate-change agenda, although the president has not introduced any future plans for the opposite pipelines shared by Canada and the US.

In an announcement issued Wednesday earlier than Mr. Biden took the motion, TC Power, the corporate that owns Keystone, mentioned that it was disenchanted by Mr. Biden’s alternative and that it will droop work on the pipeline whereas it thought of its choices.

The cancellation will “result in the layoff of hundreds of union employees and negatively affect groundbreaking trade commitments to make use of new renewable power in addition to historic fairness partnerships with Indigenous communities,” the corporate mentioned.

Chris Bloomer, president and chief govt of the Canadian Power Pipeline Affiliation, mentioned that the demise of Keystone XL had extra to do with opposition to the oil sands than the undertaking itself.

“It appears that evidently it doesn’t matter what the trade does, there’s no foundation for a center floor or compromise,” he mentioned from Calgary. “The urge for food amongst environmentalists to close issues down is insatiable.”

The probability of Mr. Kenney or TC Power prevailing in opposition to Mr. Biden by way of litigation is slim, mentioned Kristen van de Biezenbos, a legislation professor on the College of Calgary in Alberta.

Challenges in American courts or by way of investor provisions of commerce agreements might take years to resolve, would possible fail and, finally, wouldn’t restore the presidential allow wanted for the pipeline, she mentioned.

And a Canadian victory in courtroom wouldn’t remove the Keystone undertaking’s different hurdles — authorized challenges from environmental teams, regulatory roadblocks inside states and the unfavorable financial local weather which have scared off buyers and stalled development.

“I actually marvel concerning the knowledge of continuous to pursue this,” she mentioned. “It might be sooner to construct a pipeline in Canada.”


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