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‘Humiliated’ Kenney Demands Trade Sanctions, Could Sell Pipeline for Scrap as TC Shuts Down Keystone Construction

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  • Jan 22, 2021


A “humiliated” Alberta Premier Jason Kenney demanded trade sanctions against the United States, TC Energy cut 1,000 construction jobs, Fox Business and the Wall Street Journal falsely claimed 10,000 to 11,000 jobs lost, and the Keystone XL pipeline was at risk of being sold off for scrap after President Joe Biden signed a Day One executive order cancelling the presidential permit for the intensely controversial fossil megaproject.

“The Canadian province that invested US$1.1 billion (C$1.5 billion, or $7.42 billion including loan guarantees) of taxpayers’ money in the controversial Keystone XL project is now considering the sale of pipe and materials to try to recoup some funds,” Bloomberg News reported Tuesday, after news of Biden’s plans began to circulate last weekend.

“If the project ends, there would be assets that could be sold, such as enormous quantities of pipe,” Kenney told an online news conference Monday. “That would offset construction costs.”

But in a performance in which he “lectured, hectored, and pleaded with the Biden administration,” writes CBC News analyst Graham Thomson, “it was like watching a tap dancer trying to juggle as he set his hair on fire.” In political terms, “Kenney was at times on his knees begging, on his toes dancing, shaking his fist, shaking his head, and bending over backwards,” professing surprise at a decision that Biden promised last May and has been building up to ever since.

“I’ve been against Keystone from the beginning,” he said on the campaign trail. “It is tar sands that we don’t need, that in fact is a very, very high pollutant.”

And now that he’s learned that no means no, “Kenney faces headache and humiliation as Biden prepares to kill Keystone XL,” CBC writes, in its headline for Thomson’s Tuesday post.

Thomson goes through the red flags that should have heralded Kenney’s ill-advised plan to prop up the pipeline, from his description of his own “bold” initiative to the $7.5 billion in public dollars required to get construction rolling. “Whenever politicians describe something they’re doing as ‘bold’, they mean controversial or contentious or risky,” he says. “Kenney, it turns out, meant all three.”

But that didn’t stop the Alberta premier from demanding the federal government retaliate against the U.S., in a follow-up news conference after the executive order was signed.

“If, however, the U.S. government refuses to open the door to a constructive and respectful dialogue about these issues, then it is clear that the Government of Canada must impose meaningful trade and economic sanctions in response to defend our country’s vital economic interests,” he said.

(Multiple other analysts and observers over the last several months have had a more reality-based take on those interests, ranging from cross-border opportunities in electric vehicle manufacturing and electricity trade, to the powerful economic transition potential for Alberta fossil workers and communities.)

Prime Minister Justin Trudeau pledged Tuesday to keep up the federal government’s fight to defend the pipeline, then issued a follow-up statement Wednesday, after Biden had made his way through a stack of 17 Day One executive orders. “We are disappointed but acknowledge the President’s decision to fulfill his election campaign promise on Keystone XL,” he said. But “despite President Biden’s decision on the project, we would like to welcome other executive orders made today, including the decisions to rejoin the Paris Agreement and the World Health Organization, to place a temporary moratorium on all oil and natural gas leasing activities in the Arctic National Wildlife Refuge, and to reverse the travel ban on several Muslim-majority countries.”

Trudeau added: “I look forward to working with President Biden to reduce pollution, combat climate change, fight COVID-19, create middle class jobs, and build back better by supporting a sustainable economic recovery for everyone.”

In a refreshingly candid, respectful and, let’s just overuse this adjective, reality-based media briefing Wednesday evening, White House press secretary Jen Psaki said Trudeau will be first on Biden’s list today when he begins a series of introductory chats with foreign leaders. “I would expect his early calls will be with partners and allies,” she said. “He feels it’s important to rebuild those relationships and to address the challenges and threats we’re facing in the world.”

The executive order had Bold Nebraska founder Jane Kleeb issuing an emotional video to mark the win, acknowledge the campaigners who made it happen, thank Biden, and point to the other U.S. pipeline projects that are still awaiting cancellation. “Thank you, Joe Biden, for hearing regular people and standing with us instead of Big Oil,” she said.

Bloomberg News, meanwhile, is asking whether Biden’s decision marks the end of the mega-pipeline era in the U.S. “Even before Biden’s inauguration Wednesday, the oil and gas industry was on its back foot when it came to building major new infrastructure,” the news agency noted in the hours leading up to the signing. Now, “Joe Biden’s move to block the US$9-billion Keystone XL project is the clearest sign yet that constructing a major new pipeline in the U.S. has become an impossible task.”

“No one is going to announce a new pipeline while Joe Biden is the president,” agreed FiscalNote Markets Managing Director Katie Bays.

“I can’t imagine going to my board and saying, ‘we want to build a new greenfield pipeline’,” said Alan Armstrong, CEO of Tulsa, Oklahoma-based gas pipeliner Williams Companies, which abandoned a big project in New York State in 2020 after years of legal wrangling. “I do not think there will be any funding of any big cross-country greenfield pipelines, and I say that because of the amount of money that’s been wasted.”

And after Calgary-based Keystone proponent TC Energy suddenly came up touting a net-zero plan for the doomed project, analysts said the move was unlikely to sway anyone who’s serious and knowledgeable about environmental, social, and corporate governance (ESG) criteria for investments, The Canadian Press reports.

“Generally, ESG considerations do not automatically exclude certain industries,” said Olaf Weber, research chair in sustainable finance at the University of Waterloo. “But there is definitely a high risk for the oilsands, in particular, that they will have less investment in the future.”

In the Globe and Mail, columnist Gary Mason declares the death of Keystone—and the many dollars a cash-strapped Alberta stands to lose as a result—a political disaster for Kenney, who was already hemorrhaging voter support before the pipeline folded.

“There is no sugar-coating just how devastating this is for Mr. Kenney, his government, and the province,” Mason writes. “It represented billions in royalty revenues to the Alberta treasury. It also represented a ray of hope at a time when they are difficult to find in the province.”

“Why Mr. Kenney would have sunk $1.5 billion on a dicey proposition ahead of the U.S. election, and with an unstable and unpopular president in office, is bewildering and was grossly irresponsible,” Mason continues. “The premier is an intelligent person with an impressive political resume. But some of the decisions he’s made in the past two years are beyond perplexing.”

In the U.S., meanwhile, another brand of pipeline politics is beginning to play out. After TC Energy said it would axe 1,000 construction jobs in light of the executive order, conservative media previously aligned with the Trump White House inflated the number by a factor of 10 or 11.

“The conservative climate fear-mongering begins,” headlines climate journalist Emily Atkin, publisher of the excellent Heated newsletter. [Subs here. Yes, we’re reminding you again…]

The lost jobs are “nothing to be celebrated. But it’s also not something that should be exaggerated for political gain,” Atkin writes. “The 10,000 union jobs Republicans and the fossil fuel industry claim Biden killed were, first and foremost, hypothetical. Keystone XL was still awaiting permits in several states before it could begin construction,” so the jobs fossil media say have been lost had never been created.

Moreover, those jobs were almost all temporary, save the 35 permanent employees and 15 temporary contractors who would have been engaged to operate the pipeline. “The pipeline was expected to be a boom, however, for the climate crisis,” she adds. So “the Biden administration rejected Keystone XL’s permit because it asserts the enormous economic consequences of climate change outweigh the economic benefits” of 35 new permanent jobs.

“Leaving the Keystone XL pipeline permit in place would not be consistent with my Administration’s economic and climate imperatives,” Biden said in the executive order. “At home, we will combat the crisis with an ambitious plan to build back better, designed to both reduce harmful emissions and create good clean energy jobs.”

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