Monday, December 11, 2023

Canada must ‘respect’ decision to cancel Keystone XL, minister says

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Canada’s Energy Minister said the country must “respect” Joe Biden’s decision to cut the controversial Keystone XL pipeline and rejected calls from provincial politicians to pursue punitive action against the United States.

“It was an important campaign promise from candidate Biden. It is the one he kept as President Biden, ”said Seamus O’Regan, federal Liberal government minister of natural resources. “We have to respect that.”

His comments to the Financial Times suggest that the federal government will no longer make an effort to change Mr. Biden’s mind. “We have championed our cause in every way possible,” he said.

But there is “any sign that he is serious about it,” he added, referring to the new president’s decision.

Mr Biden made the cancellation of TC Energy’s license to build the US leg of Keystone XL one of his first acts as chairman.

The $ 8 billion project would have involved building a pipeline to transport bitumen from the tar sands of northern Alberta to refineries in Texas.

Environmentalists have applauded the move as an important first step in Mr Biden’s plan to tackle the climate crisis. Canada’s ultra-heavy oil deposits are more carbon intensive than most other forms of crude oil, and environmentalists criticize the large ecological footprints of developments in northern Alberta.

But the move caused a shock in Canada – and opened up another bitter schism between Ottawa and the politicians of the western province of Alberta, who feel that the federal government has not been supportive enough.

Justin Trudeau, the Prime Minister of Canada, said in a statement shortly after the cancellation that he was “disappointed but acknowledged (d)” the decision.

Alberta politicians reacted angrily to the end of the project, which had been proposed over a decade ago and in which the province had taken a billion dollar stake to advance its progress.

On Thursday, Jason Kenney, the premier of the province, sent a letter to Trudeau criticizing the “lack of federal response” to the cancellation of the permit and calling for “a way of reconsideration for Keystone XL”.

“I urge you to ensure that these unjust US actions have proportionate economic consequences,” said Mr. Kenney.

He also called on Mr. Trudeau to seek compensation for the money TC Energy and the Government of Alberta had spent on the project.

But Mr. O’Regan seemed to rule out such moves, telling the FT that it was in Canada’s interest to look to other areas of cooperation with the United States now and not dwell on the Keystone XL saga.

“The windshield is bigger than the rearview mirror,” he says. “The pretty basic market dynamics are that you listen to the customer. . . and the customer has changed in terms of product requirements and expectations. ”

Alberta has waged a public relations war over the past two decades, promoting projects that have been vilified internationally by environmental activists and from which international investors and financiers have fled.

The cancellation marks a sharp – but expected – change in Mr Biden, who has placed climate change at the heart of his campaign and had explicitly promised to end the project. Before being elected in 2016, his predecessor, Donald Trump, promised to ensure Keystone XL built and issued a permit authorizing it in early 2017. Legal battles have impeded progress.

The project would have transported 830,000 barrels per day of bitumen from Hardisty, an oil collection point in central Alberta, to the US Gulf of Mexico coast.

Keystone XL supporters have maintained this additional growth of Canada’s tar sands – the largest source of foreign oil in the United States – is threatened by the lack of pipeline export infrastructure.

But a pipeline project to Canada’s west coast bought by the country’s federal government in 2018 would boost export capacity, analysts say. Canada’s exports to the United States hit nearly 4 million bpd last week, near a record high.


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