A Gut-Punch in Genial Partnership -- Canada-U.S. Relations

"Well, that was fast. On day one, the new U.S.president, Joe Biden, is reportedly willing to gut-punch his northern neighbour by cancelling a presidential permit for the construction of Keystone XL. It is an insult. Full stop."

"Mineral fuels are Canada's largest export to the U.S. -- at over $89 billion in 2019 -- two-thirds more important than auto vehicles and parts. Almost 3,000 direct jobs and another 14,000 indirect jobs will be lost in Canada with the cancellation of Keystone XL."

"Because of reduced pipeline capacity, Canadian heavy oil will often sell at a discount, resulting in billions of dollars in lost GDP and federal and provincial tax revenues."

"It will be a no-win decision for the United States as well, if Biden goes ahead. The discrimination against Canadian oilsands production will lead to a loss of 42,000 direct and indirect jobs even as the pandemic recession rages on. When no longer piped, oil will travel by rail, which is less safe and environmentally more harmful. For every barrel of imported Canadian oil lost, the U.S will import more heavy oil from other countries."

"Who are the competing oil suppliers to the United States? In 2019, they included Mexico, Saudi Arabia, Iraq and Colombia. These producers, as well as others, including Russia and Venezuela, will be important beneficiaries from President Biden's decision to cancel Keystone XL."

Dr. Jack M. Mintz, President’s Fellow of the School of Public Policy, University of Calgary 

Construction on the Keystone XL pipeline project in Oklahoma, in 2013. Photo by Daniel Acker/Bloomberg files

"[It is] incredibly troubling [that TC Energy has suspended work on Keystone XL]."

"Now is the time for our nations to strengthen our trading relationship, not erect further barriers to collaborative and sustainable development."

Saskatchewan Premier Scott Moe

 

"[We are disappointed that Biden is] putting politics before reason [in his anticipated decision to rescind the pipeline permit]."

“Pulling the plug on a major project, hours after taking office, is a rocky starting point for re-setting Canada/U.S. relations."

PCAC president Paul de Jong, The Progressive Contractors Association of Canada .

U.S. President Joe Biden has cancelled the Keystone XL pipeline permit on his first day in office,  CBC News. (Kyle Bakx/CBC)

During the Obama presidency with Joe Biden as second-in-command, the environmental champions oversaw energy production spewing the dread carbon dioxide into the environment from coal-fired sources polluting the atmosphere with never a second thought. Under this administration fracking expanded exponentially, despite its questioned effects on groundwater and geological disturbances. That administration from 2008 to 2016 oversaw domestic oil production as it soared from 5 million to almost double the number of barrel production daily, fast-tracking to energy independence.

Since then, fracking for shale oil has diminished notably and the United States is back to importing oil from the very sources it meant to be independent from. Back then the administration viewed Canadian crude oil with the distaste of true environmentalists, and stopped the planned construction of TC Energy's Keystone XL pipeline meant to carry 830,000 barrels of crude daily from Alberta to refineries on the U.S. Gulf Coast. Citing the 'dirty' Alberta 'tar sands' environmental impact and an unwillingness to host a modest pipeline at a time when the American geography was criss-crossed by pipelines.

Nine years have passed since President Obama rejected the application for the Keystone XL pipeline. During that time U.S. oil production has fallen dramatically with shale production lost and the U.S. looks about for a secure oil supply. The one that exists right next door is once again rebuffed even though the Alberta oilsands is no longer a source of carbon intensive barrels; that carbon intensity has been reduced by over 20 percent at present, with the average barrel produced in Canada cleaner than that produced in California.

At 170 billion barrels, Canada's oil reserves in the Alberta oilsands represents the third largest in the world; greater than Russia, China and the U.S. combined. Keystone XL was meant to provide secure access to this strategic supply -- to be piped to purpose-built U.S. refining capacity in the Gulf; far and away preferable to carbon-intensive rail transit and a safer alternative supply than oil from Venezuelan tankers. It took one year for U.S. production to decline from13 million barrels a day to 11 million, where it is at the present time.

Oil is power, its energy source is an imperative tool to development and production anywhere. It has traditionally conferred strategic  geopolitical clout for those who control it. At the same time those who control oil production and distribution with few exceptions are represented by national entities unconcerned with human rights,environmental stewardship, transparency or international rule of law. Oil prices are increasingly set by Saudi Arabia, Russia and Iran with all the implications therein, particularly for sought-after U.S. security of supply.

 

 

Rather than sanctimoniously overturning former President Trump's agreement on proceeding with the pipeline as a benefit to both Canada and the United States in an oil-security partnership on his first day in power -- intent on overturning as many of the Republican president's initiatives as the Democratic successor could manage in one fell gulp -- the new president would have done well to open his ears and his mind to arguments in favour of the pipeline.

In his inauguration speech, Mr. Biden promised to chart a new course with America's friends, allies and neighbours, to mend relationships that had been set adrift by his predecessors. If the new president meant what he said, he has taken a peculiar route to achieving it by selecting as the first beneficiary of his more open 'friendliness' and appreciation for a steadfast neighbour in Canada, the first shock of bad faith meted out with a smile.