The sponsor of the Keystone XL crude oil pipeline pulled the plug on the contentious project Wednesday after Canadian officials and U.S. government political officials failed to persuade President Joe Biden to reverse his cancellation of its permit on the day, he took office.
Calgary-based TC Energy said it would work with government agencies to ensure a safe termination of and exit from the partially built line, which was to transport crude from the oil sand fields of western Canada to Steele City, Nebraska.
Construction on the 1,200-mile pipeline began last year when former President Donald Trump revived the long-delayed project after it had stalled under the Obama administration. Approximately 300 miles of the pipeline was completed and it would have moved up to 830,000 barrels (35 million gallons) of crude daily, connecting in Nebraska to other pipelines that feed oil refineries on the U.S. Gulf coast.
Canadian Prime Minister Justin Trudeau had objected to the move, raising tensions between the U.S. and Canada. Officials in Alberta, where the pipeline originated, expressed the frustration in recent weeks that Trudeau wasn’t pushing Biden harder to reinstate the pipeline’s permit.
Alberta invested more than $1 billion in the project last year, kick-starting construction that had stalled amid determined opposition to the line from environmentalists and Native American tribes along its route.
Alberta officials said Wednesday they reached an agreement with TC Energy, formerly known as TransCanada, to exit that partnership. The company and province plan to try to recoup the government’s investment, although neither offered any immediate details on how that would happen.
Biden canceled the pipeline’s border crossing permit his first day in office in January, over concerns that burning oil sands crude could make climate change worse and harder to reverse.
Attorneys General from 21 states had sued to overturn Biden’s cancellation of the contentious pipeline, which would have created thousands of constructions jobs. Republicans in Congress have made the cancellation a frequent talking point in their criticism of the administration, and even some moderate Senate Democrats including Montana’s Jon Tester and West Virginia’s Joe Manchin had urged Biden to reconsider.
Sen. Tester said in a statement, “I am bitterly disappointed at the cancelation. It’s frustrating that national politics killed a project that would have yielded big benefits for our state, but I am going to keep fighting to create jobs in rural Montana, ensure our energy independence, and get out state’s economy firing on all cylinders.”
Senator John Barrasso (R-WY), ranking member of the Senate Committee on Energy and Natural Resources, placed the blame for the cancellation on Biden. “President Biden killed the Keystone XL Pipeline and with it, thousands of good-paying American jobs,” Barrasso said in a statement.
“On Inauguration Day, the president signed an executive order that ended pipeline construction and handed one thousand workers pink slips. Now, ten times that number of jobs will never be created. At a time when gasoline prices are spiking, the White House is celebrating the death of a pipeline that would have helped bring Americans relief.”
Environmentalists who had 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. “Good riddance to Keystone XL, said Jared Margolis with the Center for Biological Diversity, one of many environmental groups that sued to stop it.
Unfortunately, the shutdown has cost the U.S. its energy independence and has quickly raised gas prices over 50% since the permit was withdrawn. It will undoubtably affect the U.S. economy, and that is on the Biden administration.