Keystone XL is cancelled — so now what?

Keystone XL is cancelled — so now what?

The announcement that TC Power is cancelling the problem-plagued Keystone XL pipeline undertaking wasn’t a giant shock.

It appeared unlikely the Calgary-based firm may dig its method out of U.S. President Joe Biden’s determination final January to yank its cross-border allow. 

After evaluating its choices, it seems TC Power reached that very same conclusion on Wednesday.

However this week’s determination to tug the plug does not put to relaxation a few key questions which were hanging over the undertaking — not only for Keystone XL, however for the Alberta authorities, environmental teams and different pipeline initiatives.

Can Alberta nonetheless get some a refund? 

Final 12 months, Alberta invested $1.5 billion, plus mortgage ensures, in Keystone XL to assist kick-start a undertaking beset by authorized disputes and protests within the U.S.

The cash was aimed toward getting building began on the Canadian leg of the undertaking, which it did for a time.

U.S. President Joe Biden indicators his first govt orders within the Oval Workplace of the White Home on Jan. 20, together with one which cancelled the allow for Keystone XL. (Evan Vucci/The Related Press)

On Wednesday, the province stated the fabric price to the federal government was $1.Three billion, however that it wasn’t giving up on retrieving what it may.

“As acknowledged, we stay dedicated to recouping the federal government’s funding within the undertaking on behalf of Albertans,” a authorities spokesperson stated in an e mail.

That will imply starting the liquidation strategy of pipe and different belongings to assist offset among the prices. However as CBC Information reported final week, the pipe that’s already underground will keep there for now.

There may nonetheless be a marketplace for what’s left over, however how far that might go towards recouping Alberta’s funding is one other unknown at this level.

Dennis McConaghy, a former TC Power govt who has authored books on power points, thinks there might be a marketplace for the spare components.

“The pipe might be helpful,” he stated. “The query about having the ability to salvage any of the expenditures they could have made on pumps will rely on whether or not these particular sorts of pumps can discover markets someplace on the earth. Finally, that may most likely occur.”

What’s not recoverable are the bills paid out on camps, engineering and the workforce, he stated.

McConaghy speculated that the formal termination of the undertaking might assist the corporate with both a few of its salvage actions or litigation — if that is one thing it pursues.

WATCH | Professional explains why politics performed a job within the demise of Keystone XL

College of Calgary’s Richard Masson says politics performed a job on the loss of life of the Keystone XL undertaking pipeline. The Alberta authorities and TC Power introduced at this time the termination of the pipeline undertaking. 3:38

What about authorized motion?

In referencing its dedication to recoup its funding, Alberta’s United Conservative authorities additionally famous “we proceed to look at all our authorized choices relating to the termination of the Keystone XL undertaking.” 

Utilizing historical past as a information, it may attempt to do that in a few methods.

TC Power filed a lawsuit in U.S. Federal Courtroom in Texas in opposition to the Obama administration after it halted the undertaking in 2015, asserting that then-President Barack Obama’s determination to disclaim building of Keystone XL exceeded his energy beneath the U.S. Structure. 

That lawsuit was finally suspended after Donald Trump inked the required building allow to get the undertaking transferring once more shortly after successful the White Home.

James Coleman, an affiliate professor of power legislation at Southern Methodist College in Dallas, stated he’ll be watching to see if Canada and TC Power are weighing a problem beneath the North American Free Commerce Settlement (NAFTA).

Although that commerce settlement was succeeded final 12 months by the Canada-U.S.-Mexico Settlement, Coleman stated there is a three-year window the place a declare may be made for an funding made beneath NAFTA.

“They might carry a declare beneath NAFTA and say they had been handled in a discriminatory style,” Coleman stated. “With that stated, no person’s ever gained a NAFTA go well with in opposition to the US. So I believe most individuals would say your odds of success are lower than 50-50.”

What does this imply for Jason Kenney’s UCP authorities?

On the identical day the information broke concerning the cancellation of the Keystone undertaking, Kenney additionally shared {that a} $1.Three billion hydrogen undertaking is within the works for Edmonton.

However solely a kind of tales made information within the Wall Road Journal, the New York Occasions and CNN.

Alberta Premier Jason Kenney marked the beginning of building of the Keystone XL pipeline within the province, within the city of Oyen, final summer season. (Flickr/Alberta Authorities)

When Kenney made his large wager on Keystone XL final 12 months, it was in line with his marketing campaign promise of jobs, pipelines and a greater financial system. It additionally got here at a time when the oilpatch was hit laborious by a deep plunge in crude costs.

The Alberta authorities stood by that call on Thursday, because the NDP once more referred to as on them to launch the total particulars of the funding settlement.

“There’s full transparency,” Power Minister Sonya Savage advised the legislature. “We supported this pipeline as a result of we imagine it might have introduced greater costs for Alberta oil, enhance oilsands manufacturing and introduced us $30 billion a 12 months in royalties.”

Regardless, it is one other blow on a authorities precedence.

“It is simply one other cumulative factor,” stated Duane Bratt, a political scientist at Mount Royal College in Calgary.

“Should you simply pull off the power file — the entire ‘combat again’ technique, the Allen inquiry, the struggle room, the funding in Keystone, the carbon tax combat — there isn’t any wins there.”

Setting politics apart, the main target for Alberta’s oilpatch might be seeing completion of the Trans Mountain growth pipeline to Burnaby, B.C., and Enbridge’s Line Three alternative pipeline connecting to Superior, Wis.

“That simply actually houses within the magnifying glass,” stated Thomas Kirk-Pearson, a senior analysis affiliate with power information analytics agency Enverus.

“With out these initiatives, you are going to have a fairly laborious restrict on how excessive manufacturing can go in Western Canada.”

Opponents of the Keystone XL pipeline show on the Dodge Road pedestrian bridge throughout rush hour in Omaha, Neb., in 2017. (Nati Harnik/Related Press)

Each initiatives face some sturdy opposition over concern round their environmental and local weather change influence — and this week’s information is anticipated to rally assist to additional protests.

“That is big for individuals who’ve been resisting new fossil gasoline infrastructure and calling for options, as a result of this was the primary actually large pipeline battle,” stated Keith Stewart, a senior power strategist with Greenpeace Canada.

Past that, he stated, Keystone additionally knowledgeable how present and future environmental campaigns might be achieved.

“The Keystone combat represented a shift in technique from the environmental motion and an rising recognition that we now have to work in partnership with, and infrequently behind the management of, Indigenous communities.”

Little question, business, authorities and environmental leaders have discovered a lot from Keystone XL’s lengthy odyssey. And the teachings probably will not have ended after this week.

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