CALGARY, Alberta / OTTAWA (Reuters) – US President-elect Joe Biden’s anticipated move to cancel the Keystone XL pipeline prompted Canada’s major oil-producing province, Alberta, to seek damages on Monday as Ottawa made an effort to save the troubled project.
Scrapping the project would threaten Canadian jobs and the US-Canadian relationship as Prime Minister Justin Trudeau tries to turn the page of the Donald Trump era, though the idea gained support from environmental groups and progressive US Senator Bernie Sanders.
A source told Reuters on Sunday that Biden will cancel a permit for the $ 8 billion project over concerns about fossil fuels contributing to climate change, which will be a blow to the Canadian energy sector.
The news on Monday sent shares in Keystone XL owner TC Energy down, prompting Alberta Premier Jason Kenney to urge Trudeau to contact the incoming Biden administration within 48 hours. Biden, a Democrat, will take the oath of office on Wednesday.
“This is the eleventh hour and if this is really the top priority, as it should be, then we need the government of Canada to stand up for Canadian workers, for Canadian jobs, for the relationship between Canada and the US,” Kenney said. a press conference.
He said Alberta had taken legal advice and believed there was a “very solid” legal basis for seeking damages under international free trade agreements if the pipeline is effectively killed by presidential fiat. Alberta’s financial exposure is just over C $ 1 billion ($ 783 million), Kenney said, after the province invested in the pipeline, also known as KXL, last year.
KXL is intended to transport 830,000 barrels of oil sands crude oil per day from Alberta to Nebraska, but is met with fierce opposition from American landowners, Indian tribes and environmentalists. Outgoing Republican President Donald Trump had backed the project.
Ottawa diplomats are continuing to liaise with their US counterparts about Keystone XL, two sources close to the Keystone XL file said, and one said TC Energy is still lobbying.
“We don’t have a decision from Biden’s administration at this point. We have to keep working, ”said a source, adding that Trudeau had consistently supported the pipeline and would continue to do so. “It’s not over until a decision is made public.”
“While there are reports suggesting a decision is imminent, our feeling is very strong that it remains possible that this could take several weeks,” said a second source.
The Trudeau government has previously urged the president-elect not to halt construction. Canadian Minister of Natural Resources, Seamus O’Regan, said in a statement Monday that Canada would continue to push for KXL with the Biden administration.
KXL owner TC Energy said in a statement Monday that the pipeline is in line with Biden’s vision of a cleaner energy future that creates jobs. TC promised on Sunday that KXL would run entirely on renewable energy by 2030.
The cancellation would be a blow to a group of Canadian First Nations known as Natural Law Energy that planned to invest, said the executive director, Brian Mountain, although he added that the group has not yet finalized the purchase and there is no financial risk is for the First Nations.
KXL was first proposed 12 years ago, when it emerged that Alberta’s oil sands would rapidly outgrow pipeline export capacity. Two other export pipeline projects, the Canadian government-owned Trans Mountain Expansion and Enbridge Inc’s replacement of Line 3, are underway, reducing the need for KXL.
TC Energy closed out 4.5% on Monday at C $ 54.00 in Toronto.
($ 1 = 1.2762 Canadian dollars)
Additional reporting by Rod Nickel in Winnipeg and David Ljunggren in Ottawa; additional reporting by Kanishka Singh in Bengalarus; edited by Steve Orlofsky and Jonathan Oatis