Vol. 26, No4 Week of January 24, 2021
Providing coverage of Alaska and northern Canada's oil and gas industry

Going down in a rage

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Biden’s decision to rescind Keystone XL approval enrages Alberta’s premier

Gary Park

for Petroleum News

TC Energy was not alone on Jan. 20.

If it felt reluctant to air its seething anger it quickly found a friend in Alberta Premier Jason Kenney, who lashed out at newly installed U.S. President Joe Biden and Canadian Prime Minister Justin Trudeau over their role in the apparent collapse of TC Energy’s 13-year battle with U.S. courts and regulators to build the Keystone XL pipeline.

More than 2,000 pipeline construction workers on both sides of the border were left with one lasting memory of Biden’s triumphant Inauguration Day - they got pink slips from TC Energy even before the president attached his signature to an executive order rescinding a presidential permit by Donald Trump for work to proceed on the pipeline link from Alberta’s oil sands top Gulf Coast refineries.

‘Gut punch’

In the midst of what Kenney called a “gut punch,” and an “insult” the premier said the “leader of our closest ally retroactively vetoed approval for a pipeline that already exists (including a cross-border link finished last year) - directly attacking by far the largest part of the Canada-U.S. trade relationship, which is our energy and exports.”

“In my books that’s not how you treat a friend or ally,” he said, dismissing Biden’s pledge to immediately start rebuilding alliances that have been turned to rubble by Trump’s sledgehammer.

Kenney noted that oil and natural gas exports, mostly from Alberta, are valued at C$90 billion a year, about double the second largest commodity - auto vehicles and parts.

He called on the Trudeau government to press the Biden administration to review its Keystone XL decision, insisting trade sanctions should be implemented if that fails.

“If, however, the U.S. government refuses to open the door to a constructive and respectful dialogue about these issues, then it is clear that the Government of Canada must impose meaningful trade and economic sanctions in response to defend our country’s vital economic interests.”

Possible actions

Kenney did not outline what specific actions could be taken, but the options include imports of U.S. oil and gas to Eastern and Atlantic Canada.

What he wants is something to match Canada’s showdown with the U.S. when Trump threatened to impose tariffs on imports of Canadian steel and aluminum and Canada threatened to retaliate with countervailing duties - a threat it did not have to carry out.

In other energy disputes within Canada in the 1970s, Alberta talked off turning off the flow of oil and gas to other provinces - again a measure that was never implemented.

What annoys Kenney most is that Trudeau and his Foreign Affairs Minister Marc Garneau have so far expressed only “disappointment” with Biden’s actions while acknowledging that the president’s decision merely fulfills an election campaign promise.

Otherwise, Trudeau said his government will use “all available channels” to voice its concern to the Biden administration, an offer Kenney views as inadequate.

Jobs issue

There has been one glimmer of hope from the U.S., with the Consumer Energy Alliance, the largest organization of its kind in the U.S., expressing “deep disappointment” in the cancellation of Keystone XL.

“Instead of choosing to keep Americans working through the post COVID-19 recovery, supporting private investment that will augment America’s world-leading emissions reductions and strengthening North American economic and energy security, President Biden bowed to the demands of a handful of special interests … at the expense of American laborers, workers, families and small businesses who depend on reliable energy,” the alliance said.

What disturbs Kenney is the thought that Biden might now be emboldened to order a halt to the upgrading of Enbridge’s Line 3 to double capacity to 760,000 barrels per day of Alberta crude on the route to Superior, Wisconsin, at a cost of C$5.3 billion and US$2.9 billion and improvements to Line 5, which delivers 540,000 bpd to Michigan and southern Ontario, but which Michigan Gov. Gretchen Whitmer is seeking a court approval to shutter.

He also fears that Biden, encouraged by an anti-fossil fuel faction in the White House, might initiate action to close the 500,000 bpd Keystone pipeline, which started operations 10 years ago.

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