Obama Redux : Hostility to Canadian Oilsands

"[Mr. President, I urge you to reconsider the cancellation of Keystone XL and] take into account the potential impacts of any further action to safety, jobs and energy security."

"It is of the utmost importance that the United States maintain energy security through strategic relationships with our allies rather than increasing reliance on OPEC nations and Russia. This includes the development of infrastructure like the Keystone XL and Mountain Valley pipelines, to get this energy to market in the safest and most responsible way."

U.S.Senator Joe Manchin, Democrat, West Virginia, Chairman, Senate Energy and Natural Resources Committee

The Narwhal

"Your decision will result in devastating damage to many of our states and local communities. Even those states outside the path of the Keystone XL pipeline -- indeed all Americans -- will suffer serious detrimental consequences."

"Please be aware that states are reviewing available legal options to protect our residents and sovereign interests."

"In the meantime, we urge you to reconsider your decision to impose crippling economic injuries on states, communities, families and workers across the country."

Montana Attorney General Austin Knudsen/Attorneys General of 13 other states 

 

"In a nod to the far-left environmental wing of the Democrat Party, the President issued a new moratorium on oil and gas leasing on Federal lands and called a halt to the Keystone XL Pipeline, even though we are a long way from significantly

 

reducing or eliminating our need for oil and natural gas."

U.S.Senator John Thune, South Dakota 

"Keystone XL was not just a policy decision to allow a pipeline to cross a border. What came with it were a whole bunch of permits."

"The policy change had the effect of revoking those permits without due process."

Scott Miller, senior adviser, Center for Strategic and International Studies, Washington

 

As Presidential Candidate Biden, no secret was made of the fact that in deference to those members of the Democratic Party and their environmental lobbyist supporters, much less his loyalty to the Obama years when the same interests held influence over the administration, the XL Pipeline carrying crude oil from Alberta to the U.S. that had been approved by President Donald Trump, would be cancelled at the earliest possible opportunity by presidential decree. That opportunity arrived the day following Mr. Biden's inauguration as President of the United States of America.

Oil dredged from Alberta's oilsands despite having undergone technologically advanced extraction methods to ensure minimal environmental contamination including CO2 emissions has always been characterized by U.S. environmental groups as injurious to the globe, hastening climate change. No such concentrated campaigns were undertaken on American soil by contrast, where 2.6 million miles of pipeline ferry natural gas and liquid petroleum products to refineries to service America's huge appetite for energy.

U.S. environmental groups were far less disturbed about coal-fired plants using old technologies and dirty coal that polluted the atmosphere far more extensively and harmfully than oil extraction in Alberta. Canadian oil was the bogeyman, symbolic of all that was wrong in the oilfields, whereas fracking with its great unknowns relating to forcing chemicals deep underground to pollute groundwater and the process leading to local earth tremors seemed by comparison to the environmentalists, quite benign.

 

Pipeline under construction in Alberta, Canada     rblood/Flickr

 

It is now not only Canada that is being short-changed by this stoppage of the KXL pipeline, but over a dozen U.S. states that are considering legal action against their federal government, voicing their concern that Americans "will suffer serious detrimental consequences" in job losses and energy insufficiency, as a result of that ill-considered move. President Biden's executive order revoking cross-border permits for the $14.4-billion KXL pipeline has union leaders, Republicans and Democratic lawmakers and state attorney generals attempting to persuade Mr. Biden to reverse that order.

Regulatory and legal hurdles were all overcome within the United States of the TC Energy Corp. pipeline project over the past decade. Alberta oil carried directly via pipeline to the U.S. Gulf Coast made good sense a decade ago and continues to make good sense now. The oil, irrespective of the presence of the pipeline, will still be sent, but by riskier-to-the-environment means; shipping and by rail, both methods vulnerable to accidents and costly clean-ups. The safer option of pipelines is vastly more economic, faster and obviously preferential for all those reasons.

 

Rocky Kistner/NRDC

 

Massive investments had already been made; construction was underway in Alberta, Saskatchewan, Montana and South Dakota well prior to Mr. Biden's executive order killing the project. Alberta Premier Jason Kenney's government is reviewing its options; whether to sue the U.S. government over the cancellation. "We are monitoring and continuing to talk to American political players about the importance of Canadian energy tot he United States", said  the spokesperson for the province's energy minister. The province is "reviewing every legal tool at our disposal to defend our financial interests in this project".

Meanwhile shipment by rail is increasing. "Canadian oilsands is in demand in the US. And because of that, it's economic for companies to be taking on [extra] rail shipments, in addition to shipping through [existing] pipe[lines]", said Ben Brunnen, vice-president of the Canadian Association of Petroleum Producers. "Western Canada still has the ability to overproduce its pipeline capacity ... It is reasonable to expect we will see a rise in crude by rail."

The U.S. oil industry wants Canadian crude shipped to its refineries. The alternative is oil shipped from Saudi Arabia, Russia, even Venezuela. Sending oil by pipeline is faster, safer, and would mean that Canadian shippers would be paid the full, not the current discounted price for their oil that comes with shipping by rail. The existing pipelines are fully used with no more capacity. The result is more rail shipments which are costlier and result in discounted prices for Canada; benefiting the U.S. and penalizing Canada.

The Biden administration’s cancellation of the Keystone XL pipeline was largely expected on both sides of the border, especially given former President Barack Obama previously rejected the project in 2015. Photo: Government of Alberta / Flickr