Keystone XL is cancelled — so now what?

The announcement that TC Energy is cancelling the problem-plagued Keystone XL pipeline mission wasn’t an enormous shock.

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

After evaluating its choices, it seems TC Energy reached that similar conclusion on Wednesday.

But this week’s determination to tug the plug would not put to relaxation a few key questions that have been hanging over the mission — not only for Keystone XL, however for the Alberta government, environmental teams and other pipeline initiatives.

Can Alberta nonetheless get some a reimbursement? 

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

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

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

On Wednesday, the province stated the fabric price to the government was $1.3 billion, however that it wasn’t giving up on retrieving what it might.

“As stated, we remain committed to recouping the government’s investment in the project on behalf of Albertans,” a government spokesperson stated in an electronic mail.

That could imply starting the liquidation strategy of pipe and other belongings to assist offset a number of the prices. But as CBC News reported final week, the pipe that is already underground will keep there for now.

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

Dennis McConaghy, a former TC Energy govt who has authored books on vitality points, thinks there will be a market for the spare components.

“The pipe will be useful,” he stated. “The question about being able to salvage any of the expenditures they may have made on pumps will depend on whether those specific kinds of pumps can find markets somewhere in the world. Eventually, that will probably happen.”

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

McConaghy speculated that the formal termination of the mission could assist the corporate with both a few of its salvage actions or litigation — if that’s one thing it pursues.

WATCH | Expert explains why politics performed a task within the demise of Keystone XL

University of Calgary’s Richard Masson says politics performed a task on the dying of the Keystone XL mission pipeline. The Alberta government and TC Energy introduced right this moment the termination of the pipeline mission. 3:38

What about authorized motion?

In referencing its dedication to recoup its funding, Alberta’s United Conservative government additionally famous “we continue to examine all our legal options regarding the termination of the Keystone XL project.” 

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

TC Energy filed a lawsuit in U.S. Federal Court in Texas towards the Obama administration after it halted the mission in 2015, asserting that then-President Barack Obama’s determination to disclaim building of Keystone XL exceeded his energy below the U.S. Constitution. 

That lawsuit was finally suspended after Donald Trump inked the required building allow to get the mission transferring once more shortly after profitable the White House.

James Coleman, an affiliate professor of vitality legislation at Southern Methodist University in Dallas, stated he’ll be watching to see if Canada and TC Energy are weighing a problem below the North American Free Trade Agreement (NAFTA).

Though that commerce settlement was succeeded final yr by the Canada-U.S.-Mexico Agreement, Coleman stated there is a three-year window where a declare could be made for an funding made below NAFTA.

“They could bring a claim under NAFTA and say they were treated in a discriminatory fashion,” Coleman stated. “With that said, nobody’s ever won a NAFTA suit against the United States. So I think most people would say your odds of success are less than 50-50.”

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

On the identical day the information broke in regards to the cancellation of the Keystone mission, Kenney additionally shared that a $1.3 billion hydrogen mission is within the works for Edmonton.

But solely a type of tales made information within the Wall Street Journal, the New York Times 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 time. (Flickr/Alberta Government)

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

The Alberta government stood by that determination 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,” Energy Minister Sonya Savage advised the legislature. “We supported this pipeline because we believe it would have brought higher prices for Alberta oil, increase oilsands production and brought us $30 billion a year in royalties.”

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

“It’s just another cumulative thing,” stated Duane Bratt, a political scientist at Mount Royal University in Calgary.

“If you just pull off the energy file — the whole ‘fight back’ strategy, the Allen inquiry, the war room, the investment in Keystone, the carbon tax fight — there is no wins there.”

Setting politics apart, the main target for Alberta’s oilpatch will be seeing completion of the Trans Mountain enlargement pipeline to Burnaby, B.C., and Enbridge’s Line 3 alternative pipeline connecting to Superior, Wis.

“That just really homes in the magnifying glass,” stated Thomas Kirk-Pearson, a senior analysis affiliate with vitality knowledge analytics agency Enverus.

“Without those projects, you’re going to have a pretty hard limit on how high production can go in Western Canada.”

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

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

“This is huge for people who’ve been resisting new fossil fuel infrastructure and calling for alternatives, because this was the first really big pipeline battle,” stated Keith Stewart, a senior vitality strategist with Greenpeace Canada.

Beyond that, he stated, Keystone additionally knowledgeable how present and future environmental campaigns may very well be performed.

“The Keystone fight represented a shift in strategy from the environmental movement and an increasing recognition that we have to work in partnership with, and often behind the leadership of, Indigenous communities.”

No doubt, trade, government 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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