President Succeeds in Promise to Terminate Keystone XL Pipeline
TC Energy Corporation confirmed that after a comprehensive review of its options, and in consultation with its partner, the Government of Alberta, it has terminated the Keystone XL Pipeline Project.
Construction activities to advance the Project were suspended following the revocation of its Presidential Permit on January 20, 2021. The Company said it will continue to coordinate with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the Project.
Another news report said that the government of Alberta announced that it’s hoping to recover the $1.3 billion in public money the province had invested in the project. How they can do that was not explained, however one Canadian news reported that Premier Jason Kenney called on the Canadian federal government to press the U.S. for compensation as a result of the decision.
The project, which would have been approximately 285 miles, would have passed through six Montana counties Phillips, Valley, McCone, Dawson, Prairie and Fallon.
State and local tax collections in Montana were expected to exceed $65 million annually.
Additionally, an estimated 42,100 jobs with $2 billion in associated earnings throughout the United States would be created, including 3,700 direct construction jobs in Montana garnering approximately $127 million in employment earnings.
It would have had six pump stations in Montana taking Montana petroleum production to market.
The Montana Department of Environmental Quality issued Keystone XL a Certificate of Compliance on April 2, 2012, under the Montana Major Facilities Siting Act.
On Inauguration Day, as one of his first acts in office, President Joe Biden made good on his campaign promise about abolishing the fossil fuel energy industry by cancelling the federal government’s permit.
Most recently, Montana Attorney General Austin Knudsen filed suit declaring President Biden’s executive order unconstitutional. Twenty-three other states had joined the suit. In addition, the government of the Canadian province of Saskatchewan announced it would file an amicus brief in support of the lawsuit, which argues the president unconstitutionally changed energy policy set by Congress, which is granted sole authority to regulate foreign and interstate commerce.
The Montana Petroleum Association recently said that the pipeline would move approximately 830,000 barrels of crude oil per day from where it is produced in Canada and Montana to a large refining hub near the Gulf Coast and supplement refining capacity in Illinois, ensuring a reliable domestic and global energy source, bolstering U.S. energy independence and global leadership.
Governor Gianforte upon learning of the possibility of the company abandoning the project, made a plea to Senator Jon Tester to attempt to convince the President to reinstate the permit. He said, “… this decision has real and devastating consequences in Montana.” He noted thousands of good-paying American jobs, hundreds of millions of dollars in revenue to support our local communities and schools, the opportunity to advance America’s green energy infrastructure, and America’s energy security,”
Governor Gianforte wrote, “With its construction terminated, the oil will still reach markets in the U.S. and around the globe. Without a pipeline, though, it will be transported more slowly by trucks and other means, endangering the environment, delaying delivery and making it more expensive for consumers who are struggling to make ends meet amid the pandemic.”
US Representative Matt Rosendale commented, “President Biden owes Montanans an explanation as to why he decided to pull the Keystone XL Pipeline permit. This killed a project that was going to be critical to Montana. The administration has reversed over a decade of planning for our local governments, cut funding for our school systems, and sacrificed the communities that were dependent on revenue from this project to get through the pandemic. We are already seeing the price of Biden’s war on energy independence, and I fear its impact will only get worse.”
“We remain disappointed and frustrated with the circumstances surrounding the Keystone XL project,” Alberta Premier Jason Kenney said in a statement.
Daniel Turner of Center Square wrote recently that cancelling the pipeline “is a gift to someone.” Besides the rail and trucking industry which will now have to move the oil, Turner said it is a gift to US competitors, such as Russian and Venezuela. Turner dismissed fears expressed by environmental groups regarding the risks of pipelines, pointing out that America is ‘crisscrossed with over 2.6 million miles of pipeline.”
US and Canadian environmental groups fought the project since it was first announced in 2008 described its cancellation as a “landmark moment” in the effort to curb the use of fossil fuels that contribute to climate change.
Anthony Swift, director of the Canada Project at Natural Resources Defense Council, was much more jubilant about the decision, saying, “This is a fantastic day for clean water, safe communities and our climate. The era of building fossil fuel pipelines without scrutiny of their potential impact on climate change and on local communities is over. Keystone XL was a terrible idea from the start. It‘s time to accelerate our transition to the clean energy sources that will power a prosperous future.”
The proposed pipeline over the past 15 years passed through several environmental impact studies which always resulted in being granted state and federal approvals, but were then delayed or rejected for political reasons. Former President Barack Obama rejected permits in 2015, an action reversed by former President Donald Trump who allowed construction to move forward.
Canadian Prime Minister Justin Trudeau was among those critical of President Biden’s inauguration day cancellation of US approval.
TC Energy’s President and Chief Executive Officer, François Poirier:
We value the strong relationships we’ve built through the development of this Project and the experience we’ve gained. We remain grateful to the many organizations that supported the Project and would have shared in its benefits, including our partners, the Government of Alberta and Natural Law Energy, our customers, pipeline building trade unions, local communities, Indigenous groups, elected officials, landowners, the Government of Canada, contractors and suppliers, industry associations and our employees.
Through the process, we developed meaningful Indigenous equity opportunities and a first-of-its-kind, industry leading plan to operate the pipeline with net-zero emissions throughout its lifecycle. We will continue to identify opportunities to apply this level of ingenuity across our business going forward, including our current evaluation of the potential to power existing U.S. assets with renewable energy.
TC Energy’s infrastructure plays a critical role in powering the North American economy, delivering the energy people need every day, safely and responsibly. The Company has $20 billion in projects, with another $7 billion of projects under development.