Updated: Mar 29
Policy Brief by Anson Shen,
Newly elected President of the United States Joe Biden did not waste any time on his first day in office. Immediately after President Biden was sworn into office, he and his administration sanctioned an array of executive orders. One of the most pertinent matters to Canadians was his executive decision to revoke the Keystone XL (KXL) pipeline permit prohibiting the continuation of the expansion project . President Biden does not take the climate crisis lightly and he has continued to prove his sincerity over this issue throughout his campaign. The cancellation of the Keystone XL pipeline has been a focal promise of the President's campaign; however, many Canadians including Prime Minister Justin Trudeau were shocked and disappointed by his hasty decision . Biden has made his standpoint on this project relatively clear and Albertans have been the most vocal about it since the announcement. Many of their concerns involve potential effects this decision could have on the Canadian economy especially following the adverse economic effects of the COVID-19 pandemic.
What Is The Keystone XL Pipeline?
KXL is an international project that has been years in the making. It was first proposed in 2008 by the TC Energy Corp . The expansion project would bring thousands of barrels of crude oil from Alberta to Texas. In 2010, TransCanada received approval from the National Energy Board and a series of teetering events began . After years of negotiation, former President Obama vetoed the bill for Keystone XL to continue, following concerns about the pervasive threats of the pipeline to the climate, ecosystems, drinking water sources, public health, and the country’s reliance on fossil fuel energy . However, hope for the expansion project ignited once more when Donald Trump was elected President in 2016. Trump signed an executive order approving KXL and issued a presidential permit to speed up the development process of the pipeline . By the spring of 2020, investments and loans were made, and the construction of the pipeline began . The direction of the project changed again once Joe Biden was elected president, cancelling the Keystone XL pipeline expansion project on his first day of presidency .
Why Did Biden Cancel the Project?
President Biden announced upon exhaustive review that the Department of State and himself had determined the Keystone XL pipeline not to be of national interest to the U.S. . He explained that the benefits of energy security and economic development are not significant in comparison to the possible environmental damages that come with the project. Biden’s focus is on developing a clean energy economy, which will “in turn create good jobs, and approval of the proposed pipeline would undermine the leadership of the U.S. in climate change . Biden believes that there are better solutions to the issues of job and energy scarcity, solutions that do not come at the cost of the clean air and water pollution.
“Leaving the Keystone XL pipeline permit in place would not be consistent with my Administration’s economic and climate imperatives," .
What Does This Mean for Canadians?
The construction of KXL provided over 2,500 jobs for construction workers in Alberta and the U.S., stimulating thousands of additional jobs and increasing economic activity in services of trades, retail and hospitality . In total, the project would have created 59,000 jobs that could have helped Canada reverse the adverse economic effects from the COVID-19 pandemic . The completion of the pipeline would contribute an estimate of $2.4 billion to Canada’s GDP and $30 billion in tax and royalty revenues for Albertans . Canada was the largest supplier of crude oil to the U.S. in 2019, accounting for 98% of all Canadian crude oil exports. KXL would limit North American reliance on supply from OPEC countries and provide North Americans with a stable supply of crude oil . Since the decision, Prime Minister Trudeau has promised to have the backs of Albertans as they make this transition and is working diligently with the Alberta administration.
The revocation of the Keystone XL project is one of President Biden’s many efforts towards decreasing the carbon footprint in the U.S. He has also signed onto an order to reinstate the United States’ commitment to the Paris Agreement, a legally binding accord on climate change that aims to limit global warming well below 2 degrees Celsius . President Biden’s recent actions have set an example for the rest of the country and the world to consciously make efforts that avoid contributing to the climate crisis.
The Executive Branch, Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis, (Washington, DC: The United States Government, 2021), https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-protecting-public-health-and-environment-and-restoring-science-to-tackle-climate-crisis/.
Justin Boggs, “Canadian PM Justin Trudeau ‘disappointed’ with Biden’s decision on first day”, The Denver Channel, January 21, 2021, https://www.thedenverchannel.com/news/national/canadian-pm-trudeau-disappointed-with-bidens-decision-on-first-day.
“About Keystone XL,” TC Energy Corp., Accessed on January 27, 2021, https://www.keystonexl.com/about/.
Major Projects Management Office, Archived - Project Agreement for the TransCanada Keystone XL Pipeline Project, (Government of Canada, 2020), https://mpmo.gc.ca/projects/69.
M. Denchak, “What Is the Keystone XL Pipeline?,” NRDC, Accessed February 1, 2021, https://www.nrdc.org/stories/what-keystone-pipeline.
Tom DiChristopher, “Trump signs executive actions to advance Keystone XL, Dakota Access pipelines”, CNBC, January 24, 2017, https://www.cnbc.com/2017/01/24/trump-to-advance-keystone-dakota-pipelines-with-executive-order-on-tuesday-nbc.html.
“Investing in Keystone XL Pipeline,” City of Alberta, Accessed on January 27, 2021, https://www.alberta.ca/investing-in-keystone-xl-pipeline.aspx.
The Executive Branch, Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.