CALGARY, Alberta / OTTAWA (Reuters) – US President-elect Joe Biden’s long-awaited move to cancel the Keystone XL pipeline led Canada’s main oil-producing province, Alberta, on Monday to threaten to seek compensation while Ottawa was making efforts to save the troubled project.
Undoing the project would threaten Canadian jobs and the US-Canada relationship as Prime Minister Justin Trudeau tries to turn the page in the Donald Trump era, although the idea has garnered support from environmental groups and progressive US Senator Bernie Sanders .
A source told Reuters on Sunday that Biden would cancel a license for the $ 8 billion project due to concerns about fossil fuels that contribute to climate change, damaging the Canadian energy sector.
The news caused the shares of Keystone XL owner TC Energy to fall on Monday and prompted Alberta Prime Minister Jason Kenney to ask Trudeau to contact the new Biden administration within the next 48 hours. Biden, a Democrat, is expected to take the oath of office on Wednesday.
“This is the 11th 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 Canada-US relationship, right now,” Kenney said in an interview collective.
He said Alberta had hired legal counsel and believed there was a “very solid” legal basis for seeking damages under international free trade agreements if the pipeline is effectively eliminated by presidential decree. Alberta’s financial exposure is just over C $ 1 billion ($ 783 million), said Kenney, after the province last year invested in the pipeline, also known as KXL.
KXL aims to transport 830,000 barrels a day of crude oil from Alberta to Nebraska, but has met with strong opposition from U.S. landowners, Native American tribes and environmentalists. Republican President Donald Trump had supported the project.
Ottawa diplomats continue to engage with their American colleagues on Keystone XL, said two sources close to the Keystone XL archive, and one said that TC Energy is still lobbying.
“We don’t have a decision by the Biden government at this time. We must continue to work, ”said a source, adding that Trudeau had consistently supported the pipeline and would continue to do so. “It wasn’t over until the decision was made public.”
“Although there are reports suggesting that a decision is imminent, our feeling is that it is still possible for it to drag on for several weeks,” said a second source.
Trudeau’s government had already urged the president-elect not to stop construction. Canadian Natural Resources Minister Seamus O’Regan said in a statement on Monday that Canada would continue to press for KXL with the Biden government.
KXL owner TC Energy said in a statement on Monday that the pipeline is in line with Biden’s vision of a cleaner energy future that creates jobs. TC promised on Sunday that the KXL would run entirely on renewable energy by 2030.
The cancellation would be a blow to a Canadian First Nations group known as Natural Law Energy that plans to invest, said its executive director, Brian Mountain, although he added that the group has not yet closed its purchase and there is no financial risk for First Nations.
KXL was first proposed 12 years ago, when it appeared that Alberta’s oil sands would quickly exceed the capacity of the export pipeline. Two other export pipeline projects, the Canadian government Trans Mountain Expansion and the replacement of Enbridge Inc Line 3, are underway, reducing the need for KXL.
TC Energy closed on Monday with a 4.5% drop to C $ 54.00 in Toronto.
($ 1 = 1.2762 Canadian dollars)
Additional reporting by Rod Nickel in Winnipeg and David Ljunggren in Ottawa; additional reporting by Kanishka Singh in Bengalarus; edition by Steve Orlofsky and Jonathan Oatis