Alberta’s finance minister says the province’s C$1.3-billion investment of taxpayers’ money in the now-defunct Keystone XL oil pipeline project was a prudent gamble given the potential payoff in profits and jobs.
“We did commit to delivering on pipelines, and we made a calculated decision around investing in the KXL pipeline, a pipeline that would have provided $30 billion of wealth creation for Albertans over the next 20 years,” Travis Toews told the house last Thursday.
Energy Minister Sonya Savage added the decision meshed with a broader commitment to grow Alberta’s wellspring industry.
“In this province, we produce over three million barrels a day of oil from the oilsands alone,” she said. “If prices go down because we don’t have enough pipeline capacity, we can lose hundreds of millions of dollars in provincial revenue.”
They made the comments a day after the project operator, TC Energy Corporation of Calgary, officially abandoned the multibillion-dollar cross-border project, The Canadian Press reported last week.
In early 2020, Premier Jason Kenney and his United Conservative government committed $1.5 billion in direct financing and $6 billion more in loan guarantees to TC Energy. At the time, the project faced multiple court challenges and the emerging U.S. Democratic party candidate, now President Joe Biden, was promising during his election campaign to cancel it.
Biden did just that in January on his first day in office, saying more product from Alberta’s oilsands does not mesh with his larger goal of combating climate change.
During question period last week, Opposition NDP critic Joe Ceci renewed a call for the government to release all details surrounding the contract to confirm the calculated $1.3-billion hit to Alberta’s bottom line. He called the decision to invest in Keystone XL an irresponsible gamble given that the project was already in jeopardy when the line’s backer, then-U.S. president Donald Trump, was facing stiff opposition to retain the presidency.
“The UCP gambled wrong,” said Ceci.
“Yesterday’s loss is another example of how this premier has failed our energy sector.”
Kenney has promised his government will sue the U.S. government to recoup the money under legacy rules tied to the old North American Free Trade Agreement, or NAFTA.
NAFTA has been replaced by the United States-Mexico-Canada Agreement, but investors can still sue under NAFTA until the middle of 2023.
This report by The Canadian Press was first published June 10, 2021.