Alberta Premier Jason Kenney was shocked and horrified this week to learn that Joe Biden is going to cancel the Keystone XL oil pipeline as soon as he becomes president of the United States on Wednesday. Mr. Biden’s intention has been well known and has not wavered since his years as vice-president under Barack Obama. Canada’s and Alberta’s chances of changing Mr. Biden’s mind at this late date are slender at best.
Mr. Kenney believes he is dealing with a conspiracy of Hollywood celebrities and California tree-huggers bent on persecuting Alberta and shutting down its oil industry. He is not. He is dealing with an incoming U.S. administration that just won control of the White House and both houses of the U.S. Congress, and that campaigned on killing the Keystone XL pipeline for a long list of reasons with which a large portion of the U.S. public agrees.
Alberta and Canada will need a better grasp of the forces at play if they are to open the U.S. market more fully to Canadian oil and bitumen. Mr. Kenney has seemed for so long to be a tool of the oil industry that he may have trouble winning serious attention in Mr. Biden’s Washington.
Mr. Biden’s view has been consistent and well advertised. In November 2015, the Obama administration, including Mr. Biden, rejected Keystone XL, partly because the U.S. oil industry had increased domestic production and did not need increased supplies of Canadian oil. Nine months ago, after Mr. Biden had won a string of primaries and was clearly going to be the Democratic candidate for president, he announced he was going to cancel Keystone XL if elected.
TC Energy, the Calgary-based company that owns the Keystone network, has faced continuous criticism and opposition on account of spills from its lines, seizures of land for pipeline construction, potential damage to sand hills and to the Ogallala aquifer in Nebraska, and other issues contested before courts and regulatory agencies.
Canada exports huge volumes of oil to the United States and will continue to do so, with or without Keystone XL. Canada exported 3.7 million barrels per day to the U.S. in 2019, 98 per cent of all Canadian crude oil exports. Keystone XL would deliver bitumen from the Alberta oil sands more cheaply and efficiently to U.S. refiners. It would not, however, help Canadian oil producers serve buyers in Asia.
Prime Minister Justin Trudeau and his government should make the best case they can for the Keystone XL line, recognizing that it was a pet project of the Donald Trump administration, which is now defeated and discredited. TC Energy and Jason Kenney formerly enjoyed a sympathetic hearing in Washington, but those days are gone now.
Canada would be foolish to ask Mr. Biden, on the day he takes office, to start his presidential term by tearing up the platform the voters accepted and betraying the supporters who brought him to power. After a decent delay, however, Canada might ask for joint study of the vast rail traffic that now brings Alberta bitumen to U.S. refineries, and whether another safer and more efficient way might be found to serve those U.S. oil importers. If the solution turns out to be Keystone XL, then the problem is easily solved.
Mr. Kenney’s strategy has failed. Prime Minister Trudeau should take charge of the file and try a more promising approach.