`Now is the critical hour': Kenney calls for support of Keystone XL
OTTAWA — Alberta Premier Jason Kenney says it is the “critical hour” for the Keystone XL pipeline, urging Ottawa to step up its support for the embattled project following years of regulatory delay.
His comments came after news reports that U.S. president-elect Joe Biden would scrap the $10-billion project on his first day in office on Wednesday. Biden has long voiced plans to revoke the permit for Keystone XL, but news of immediate action on the controversial pipeline nonetheless raised alarms in the core of the struggling Canadian oil industry.
“Now is the critical hour,” Kenney told reporters Monday. “If this really is a top priority, as it should be, then we need the Government of Canada to stand up for Canadian workers, for Canadian jobs, for the Canada-U.S. relationship right now, today and tomorrow.”
Oil producers in Western Canada have been struggling ever since commodity markets crashed in 2015, made worse by a lack of available pipeline capacity that has diminished the price of Canadian crude. Major projects like Keystone XL, the Line 3 replacement, and taxpayer-owned Trans Mountain expansion have languished for years due to legal and regulatory delays. Keystone XL was first proposed in 2008.
A failure to complete Keystone XL, proposed by Calgary-based TC Energy, would eliminate one of three pipelines that Prime Minister Justin Trudeau has often touted as critical conduits for the Canadian oil and gas sector.
The expectation of lower oil demand in coming decades has marginally reduced the need for major new pipelines, but many analysts say all three major projects might be needed to reduce dependence on rail cars and raise Canadian oil prices.
Jack Mintz, senior fellow at the University of Calgary's School of Public Policy, said Biden's decision to quash Keystone XL is likely to cool Canada-U.S. relations on the energy file, an area where the two countries have long shared large plots of common ground. “For someone who wants to work with his allies, this isn't a very good start,” he said. “This is a slap in the face for Canada.”
Industry representatives on Monday said scrapping Keystone XL would only intensify the U.S.'s dependence on oil supplied by countries operating under less environmentally-conscious regimes.
According to a report by the Wall Street Journal, TC Energy this weekend said it would commit to using only renewables to power Keystone XL, part of an effort to appease the Biden administration.
Former U.S. president Barack Obama vetoed a bill to build Keystone XL in 2015. In 2017, President Donald Trump signed an executive order to again move ahead with the project.