Can Biden be persuaded to keep Keystone XL? Canadian industry and government urge energy cooperation.
The Canadian and U.S. energy industries anxiously await the energy policies, plans and standards that will be set by the incoming Biden administration.
Washington insiders say the first big move will be on Day One of his presidency this week: an executive order to "Rescind Keystone XL pipeline permit."
Those words appear on a list of planned executive actions. They are seen as a prime offering to green and Indigenous opponents of the line, following this statement from Biden in May 2020: "I've been against Keystone from the beginning. It is tarsands that we don't need.”
The question now is: Can Biden somehow be persuaded to restore the permit — if amended with new environmental requirements — for the KXL oil pipeline being built from Alberta to refineries and oil facilities in Illinois, Texas and Oklahoma?
Builder TC Energy made a last-ditch effort to avert the cancellation, announcing on Sunday that the pipeline would be powered with renewable energy, by spending US$1.7 billion on solar, wind and battery-powered systems.
TC Energy also said it would hire a union-only workforce, sign Indigenous equity partners and establish zero-emissions operations by 2030.
And there are other reasons that lead supporters of the pipeline to hope that Biden might soften.
For one thing, Texas refineries are built for heavy oil such as ours, and can't count on getting it from Venezuela anymore. No KXL means more of our oil going south by train.
And, as a Democrat, Biden will hear from major unions how TC Energy’s pipeline means jobs for more than 8,000 union workers in three states and US$900 million in wages.
As well, our Natural Resources Minister, Seamus O’Regan, will tell Biden how First Nations own a share of KXL.
O’Regan adds: “What we do is we make the case: Oil is going to be with us for some time, we are responsible oil providers. . . . Our argument is that we can work together on a whole host of things that can drive down emissions.”
Then there’s the Line 3 oil pipeline from Alberta to Superior WI. Minnesota has approved it, but naysayers (and some U.S. Indigenous leaders) have been hounding Biden to reverse the U.S. Army Corps of Engineers’ permit for the line. The law would seem, though, to call for “evidence” to trigger such a reversal, not just political pressure.
One key argument that is being used to press Biden to lay off these pipelines is the question of energy security and the strategic value of Canadian oil.
Prime Minister Justin Trudeau played that card in his congratulatory phone call to Biden as President-elect, pushing Keystone XL as a source for "energy cooperation" between the two countries.
And Brian Schweitzer, former Governor of Montana, argued: “You don’t have to send the national guard into Alberta.”
One key proponent of energy co-operation is the international Pacific NorthWest Economic Region organization (PNWER).
It seeks solutions to cross-border challenges and has done so since it was founded in 1991 by the legislatures of Alaska, Idaho, Montana, Oregon, Washington, Alberta, BC, the Northwest Territories, Saskatchewan and Yukon.
It has drawn up a long list of recommendations to the Biden administration, that includes these points:
- ENERGY TRADE: “Energy is an integral part of the U.S.-Canada trade relationship, with Canada being our largest energy trade partner ($119b in 2019). The U.S.-Canada energy system is heavily integrated and includes cross-border pipelines and transmission. PNWER encourages the new administration to strategically address the long-term energy security needs of the U.S. and Canada and recognize the importance of this crucial and integrated energy system to the economic, safety, and security of the United States.
- POLICY-MAKING: “PNWER hosts a bi-national energy policy course for state and provincial legislators to educate them on key energy topics that they are addressing in their legislative committees. We encourage continued investment in these types of programs to ensure our policymakers have a clear understanding of the North American energy picture. The Department of Energy should continue to support funding to educate state and local policymakers on best practices in energy policy.
- CLIMATE TARGETS: “In order for states to achieve climate targets, multi-state planning must include Canadian provinces, because of our energy interdependencies. To achieve climate change goals and greater decarbonization, more funding is needed to address cross-border research, share best practices, and plan for the long-term infrastructure that will be needed to achieve those targets. This planning must include both public and private collaboration, for example on the future of green hydrogen.”
And there is more from PNWER:
- SUPPLY CHAINS: “U.S. and Canadian supply chains are deeply interconnected, and we must maintain this collaboration to ensure buyers, sellers, service providers, and experts can continue crossing the border to keep these relationships alive and trade flowing freely.
- RECIPROCAL SUPPLY: “COVID-19 exposed weaknesses in U.S. supply chains and has resulted in renewed interest for protectionist and ‘Buy American’ policies. While reshoring and cultivating local supply chains is important, the U.S. must preserve its reciprocal and collaborative supply chains across the Canadian border. As new global trade relationships are established, the U.S.-Canadian trade relationship is more important than ever.
- “Continue to collaborate with Canada on the Joint Action Plan on Critical Minerals Supplies. Securing Critical Minerals in Canada and the U.S. is an issue that will continue to be important to the bi-national relationship.”
As well, PNWER is urging a joint approach to reopening the Canada-US border:
- PLANNING REOPENING: “The U.S. should work with Canada to develop a coordinated plan for the eventual safe reopening of the land border to non-essential travelers. This must include a discussion on reopening bi-national tourism.
- SUPPORTING TOURISM: “The U.S. and Canada must present a strong, safe, and well-coordinated border reopening message. Reopening the land border between the U.S. and Canada to non-essential travelers will be vital for the economic recovery of the border region and the re-emergence of the bi-national tourism industry.”