Canada scrambles to save Keystone XL as Joe Biden prepares to kill troubled pipeline

Oil-producing province Alberta threatens to seek damages following reports that the incoming US president will cancel a permit for the US$8 billion project

The pipeline has run into fierce opposition from US landowners, Native American tribes and environmentalists, though it was supported by Donald Trump

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Shane Red Hawk of the Sicangu Lakota band of the Rosebud Sioux and his daughter Tshina Red Hawk prepare to begin a horseback ride Washington in April 2014 in protest against the Keystone XL pipeline. Photo: EPA

Published: 6:22am, 19 Jan 2021Updated: 6:21am, 19 Jan 2021

US president-elect Joe Biden’s expected move to cancel the Keystone XL pipeline prompted Canada’s main oil-producing province of Alberta on Monday to threaten to seek damages as Ottawa made efforts to save the troubled project.

Scrapping the project would threaten Canadian jobs and the US-Canadian relationship as Prime Minister Justin Trudeau tries to turn the page on the Donald Trump era, though the idea drew support from environmental groups and progressive US Senator Bernie Sanders.

A source told Reuters on Sunday that Biden will cancel a permit for the US$8 billion project over concerns about fossil fuels contributing to climate change, dealing a blow to the Canadian energy sector.

The news sent shares in Keystone XL owner TC Energy lower on Monday and prompted Alberta Premier Jason Kenney to urge Trudeau to reach out to the incoming Biden administration in the next 48 hours. Biden, a Democrat, is due to take the oath of office on Wednesday.

Indigenous leaders and climate activists protest against the Keystone XL pipeline in Seattle in May 2017. Photo: AFP

“This is the eleventh hour and if this really is the top priority, as it should be, then we need the government of Canada to stand up for Canadian workers, for Canadian jobs, for the Canadian-US relationship, right now,” Kenney told a news conference.

He said Alberta had retained legal counsel and believed there was a “very solid” legal basis to seek damages under international free trade agreements if the pipeline is effectively killed by presidential fiat. Alberta’s financial exposure is just over C$1 billion (US$783 million), Kenney said, after the province last year invested in the pipeline, also known as KXL.