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TC Energy Touts ‘Zero-Emissions’ Plan, Kenney Threatens Court Action as Keystone Cancellation Looms

Calgary-based pipeliner TC Energy touted a “zero-emissions” approach to its fossil fuel transportation business, the federal and Alberta government vowed to continue the fight, and Premier Jason Kenney admitted his province stands to lose a billion-dollar gamble as the reality sank in that U.S. President Joe Biden is expected to cancel the Keystone XL pipeline after he’s sworn in later today.

News services reported over the weekend that Biden planned to revoke the presidential permit for the pipeline on Day One of his presidency, part of a “10-day blitz” of executive orders designed to reset the direction in Washington, DC after four years of Trumpian drama, dysfunction, and dystopia.

Right on cue Monday, TC Energy “announced a plan for its Keystone XL project to achieve net-zero emissions when it is placed into service,” The Canadian Press reports. It said it would hit (would have hit?) the target after the pipeline opens in 2023 “by buying renewable energy from electricity providers, and if it is not available it will purchase renewable energy credits or carbon offsets.”

By 2030, TC pledged to eliminate any need for credits or offsets by developing new renewable sources along the pipeline route.

In the meantime, Kenney and Natural Resources Minister Seamus O’Regan made a last-ditch pitch for Biden to reconsider.

“All we ask at this point is that President-elect Biden show Canada the respect to actually sit down and hear our case about how we can be partners in prosperity, partners in combatting climate change, partners in energy security,” Kenney told media on Monday. “Surely the relationship between Canada and the United States is worth at least having that discussion.”

“Our government’s support for the Keystone XL project is long-standing and well known. And we continue to make the case for it to our American colleagues,” O’Regan added. “Canadian oil is produced under strong environmental and climate policy frameworks, and this project will not only strengthen the vital Canada-U.S. energy relationship, but create thousands of good jobs for workers on both sides of the border.”

[Thought experiment: Does that mean the same investment outside the fossil sector would create 42,000 jobs?—Ed.]

Kenney also revealed a more desperate reason to push back on Biden’s expected announcement: after his deeply cash-strapped province lavished C$8 billion in subsidy dollars and loan guarantees on the Keystone project, it stands to lose the $1.5-billion “strategic investment” that helped prompt TC Energy to get started on construction. He said Alberta may pursue legal action to recover its costs if the pipeline is cancelled.

“I’m not sure that people involved in this decision in Washington are fully aware that the border-crossing section of the pipeline was built last year as part of construction efforts,” Kenney told a virtual news conference. “If a precedent is created that the United States can unilaterally stop border crossings of pipelines that already exist, then this could be applied to the many other pipelines that provide Canadian energy to U.S. consumers.”

“It’s clear that Jason Kenney is now swinging wildly at anything and everything to distract from his failure on Keystone XL. He’s threatening lawsuits while also pleading with the U.S. to let KXL proceed,” responded provincial opposition leader Rachel Notley. “We now know at least $1.5 billion has been put at risk, but it will likely be more. I can’t help but wonder how this money could have been better spent on new renewable energy projects and sustainable jobs.”

On Saturday, just hours before news began to circulate that the Keystone cancellation had become a Day One priority for Biden, the Globe and Mail reported that Alberta was spending $1.1 million on Washington lobbyists to try to keep the project alive. “The cost of these contracts is a tiny fraction of just one day, or even one hour, of the value of the goods and products that flow from Alberta to the United States,” said Justin Brattinga, press secretary to Alberta Jobs, Economy and Innovation Minister Doug Schweitzer.

But as the decade-long Keystone saga shows signs of winding down (unless it moves into the courts), former Alberta Oil editor Max Fawcett says Kenney has only himself to blame for the cancellation—and will have trouble pinning the decision on any lack of commitment from Ottawa.

“It could not have escaped the Biden team’s notice that the Kenney government has made attacking environmentalists and undermining climate policy one of the foundational elements of its political strategy,” Fawcett writes for the Globe. “Its [fossil] energy ‘war room’, as ineffective as it’s been, revealed an agenda that is out of step with the one articulated by Mr. Biden during his campaign. And the recent revelations about its public inquiry into anti-[fossil] energy campaigns, whose reading list and commissioned research seems far more in keeping with a government that wants to deny the reality of climate change than one getting on with the business of responding to it, couldn’t have helped matters.”

Moreover, Fawcett adds, “the Biden team also surely noticed the conspicuous presence of MAGA hats in Mr. Kenney’s political orbit—including atop the head of his government’s minister of agriculture and forestry, Devin Dreeshen. Similarly, they had to have been aware of the comments Mr. Kenney made during a post-election podcast, when he referred to Gretchen Whitmer—Michigan’s governor and, most crucially in this context, Mr. Biden’s campaign co-chair—as ‘brain-dead’ because of her opposition to a different pipeline, Enbridge’s Line 5.”

Against that backdrop, Globe climate columnist Adam Radwanski casts the impending Keystone decision as a “wake-up call for Canadians who expect [Biden] to compromise his climate agenda in the name of diplomacy,” and one that shouldn’t come as a surprise. “It’s what he promised during last year’s U.S. campaign, it’s easy to act on, and failing to do so swiftly would have sounded alarms within the Democratic Party’s base.”

Which means that, with one stroke of the pen, Biden will “force a reckoning about how Canada fits into Washington’s imminent effort to confront climate change more seriously than it ever has before and pull the rest of the world along with it,” Radwanski writes. “And there are two very different lessons that Canadian leaders, industry, and the broader population could draw: one of them positioning this country for a lot more frustration with increasingly adversarial continental relations, the other opening the door to new economic opportunities.”

The first option is to treat Biden’s decision as “virtue-signalling’, or “take it as evidence against the promised economic upside of ambitious domestic climate policy”, he explains. But it would be “incredibly self-defeating for Canada to embrace being a climate laggard at a time when its biggest trading partner—and the biggest customer for its oil and gas—is abruptly shifting in the other direction.”

The “more constructive approach is to recognize that while Mr. Biden may be starting with a blow to Canadian interests, there will soon be plenty of other opportunities to move more collaboratively—most of them helpfully highlighted in the platform he campaigned on.” Radwanski lists methane regulation, electric vehicle strategy, and cross-border electricity trade as potential early wins, along with carbon border adjustments as a Biden priority that could either turn out well or poorly for Canada.

Read Radwanski’s full analysis here.

While the issue plays out in Washington, Edmonton, and Ottawa, CBC has a different take from Hardisty, Alberta, the town of about 550 people in Alberta’s Battle River Valley that expected to see its population double and its municipal coffers refill based on the construction jobs the pipeline would bring.

“We’ll basically have to put our community on hold as to whether or not we can move forward,” said Chief Administrative Officer Sandy Otto, in a news story that points to the community’s immediate need for solid, reliable job transition options. “We’ll be going at a snail’s pace again if we can’t get Keystone through.”