The Keystone XL controversy: cons, pros, and the uncertain future
By Janis McMath, Editor-in-Chief
With claims that carbon pollution essentially exclusively comes from oil and gas, the likely end of Keystone XL is seen as greatly beneficial.
Canadians were certainly glued to their screens when America finished their recent election—which was one of the most controversial American elections ever, along with achieving the most votes ever cast in a US election. After finishing our binge-watching of the historic election, Canada immediately felt the impact of the results. One of Biden’s campaign promises was to shut down the Keystone XL (KXL) pipeline when he first entered office; Biden delivered on some of his promises during his first day in office. Reactions from Canadians range from overjoyed environmental activists, to our PM Justin Trudeau calling it disappointing, and even Alberta Premier Jason Kenny calling it a “gut punch.” The pipeline faced a similar issue when Obama was first in office as he also shut KXL down in 2015. Is this death blow different?
THE PROBLEMS WITH THE PIPELINE
Biden has shown his commitment to combating climate change; in his first day in office, he rejoined the Paris climate agreement, ordered federal agencies to get on re-establishing over 100 environmental regulations Trump lessened or halted, and, of course, ended America’s Keystone XL pipeline agreement with Canada. The new American president’s action is greatly appreciated by climate-change activists, environmentalists, and some prominent indigenous activist groups.
The report “Understanding the Canadian oil sands industry’s greenhouse gas emissions” says that tar sands have a significant carbon footprint due to the excessive processing needed of the sands, so the termination of the pipeline deal comes as great positive for climate-change activists. The country is looking to meet a specific carbon emission goal in 2030, and with claims that carbon pollution essentially exclusively comes from oil and gas, the likely end of Keystone XL is seen as greatly beneficial. Others have brought up concerns about the pipe’s potential to burst and destroy nature and wildlife surrounding the spill. According to Équiterre (a Montreal-based organization), pipeline incidents and oil spills are rising across Canada—looking at 2016 to 2017, the number of accidents grew 41 percent.
Among those celebrating Biden’s move are indigenous activist groups that look to end the oil and gas sector in favour of clean energy. National Geographic previously highlighted Indigenous Climate Action: an Indigenous activist organization that doesn’t actually look to end the oil sands industry—as that would be very expensive and ill-advised. Instead, the organization desires a full pivot to investments in renewable energy research, and stopping any new oil projects. The executive director of this activist organization, Eriel Tchekwie Deranger, points out that a lot of beautiful Albertan wild land is being destroyed, and that many cannot hunt as they once could because of the oil sand industry’s impact on wildlife. Deranger also states that his organization was displeased with Trudeau’s move to sink billions into the project when those funds could have bettered Indigenous communities.
While some Canadian politicians are calling to even sue the states for damages, others are more focused on moving onto the future. Trudeau has been having a reportedly fantastic relationship with Biden administration so far, and while he was sad the contract ended, he is looking forward to prioritizing goals the two leaders share. Some are calling for the PM to apply more pressure on Biden in hopes of compensation or a restart of the project, but considering Trudeau’s desire to move forward, it does not appear that he will be hounding the new American president on the matter more than he reportedly has. It is argued that the US need for Canadian oil is not as great as it used to be when Obama revoked funding, as the US has since made deals with other countries and have found many alternative sources of fuel—and all of this protects the US from Keystone XL fallout damage. It is clear that this comes as a fantastic victory, and isn’t viewed as much of a dent to the states.
THE SUPPORT FOR KEYSTONE XL
TC Energy had a deal in place that would have gave five Indigenous tribes up to a 1-billion-dollar ownership stake in KXL.
While Biden’s actions will certainly garner applause from some, others are red with frustration at the losses this action will bring Canada—and specifically Alberta, as their premier Jason Kenney is demanding economic retaliation. Kenney states that Alberta has put about 1.5-billion dollars into the project, so he is seeking reimbursement for Alberta (and TC Energy, which owns Keystone XL) as he sees Biden’s act as a clear violation of the Canada-US-Mexico Trade Agreement.
A common observation of Biden’s move is that it sets a dangerous precedent in cancelling of other major projects without negotiation or fair discussion. Some speculate that it could end other pipelines and incentivize Biden to bring in “Buy America” policies which would freeze out Canadian products and damage our economy. Others call this foolish as the US has a vested interest in the completion of those projects, but just not so much in Keystone XL. An expert on energy law pointed out in an interview with CBC News that Keystone XL was a very unique situation as the permit was done by executive order, and could be revoked at any time because of such.
The idea that America doesn’t have a lot to gain from the Keystone XL pipeline is hotly contested. Canada already sends America 550,000 barrels of oil each day through the original Keystone pipeline, and the Keystone XL was projected to carry 830,000 barrels of oil each day—creating more product for the high demand. The KXL would decrease Canadian oil prices as the pipeline makes much more of the landlocked oil accessible and ready to ship. Through this, America would also gain easy access to cheap oil. (Canada would also be reaping the benefits as Keystone XL would allow us to get a better return on oil barrels produced and exported as Canadian exporters currently suffer low prices—partly due to pipelines that get congested at times.) The pipeline is also seen as beneficial because the two countries are very similar and already share a great trading relationship, and creating deals between similar countries on good terms is easier than with countries that may share an unstable relationship.
Another factor to consider is the claim that while oil sands have a reputation as a “dirty oil,” some research states that tar sands do not deserve the title they have earned. As reported by the Globe and Mail, a study conducted at the University of Victoria found that oil sands are not as dirty as many other energy sources. And if Canadian oil is not available, other dirtier and unrefined oils may be used by America as an alternative. Additionally, the Keystone XL pipeline committed to being the first pipeline entirely powered by renewable energy (by 2030).
Indigenous activist Deranger, while against the expansion of new oil-based projects, highlights an important issue surrounding the pipeline: the employment opportunities pipelines bring to Indigenous communities. In an interview with the CBC, Dale Swampy, president of the National Coalition of Chiefs, expresses his disappointment at Biden’s move against the Keystone XL pipeline. He states such a paramount change like this “really affects our bands’ ability to keep our people employed.” TC Energy had a deal in place that would have given five Indigenous tribes up to a 1-billion-dollar ownership stake in KXL. A report cited by CBC states that in oil and gas, about seven percent of workers are self-identified Indigenous people—this is compared to the regular three percent for many other industries. Overall, the pipeline would have roughly created 60,000 jobs spread across Canada and America. Over 2,000 jobs were lost from the get-go and many opportunities for employment have disappeared. Terry Parker, executive director of Building Trades of Alberta, estimates that about 30,000 people in his organization will be out of work because of this. He states that long-term, high-quality jobs will cease to exist because of the KXL shutdown.
As previously mentioned, there are concerns surrounding the safety of pipelines—some bring up bursts or spills and how those can affect wildlife. In response to this problem, the Government of Canada’s website states that pipeline are a very safe way to transport oil. “On average each year, 99.999 percent of the oil transported on federally regulated pipelines moves safely.” The website goes on to state that most of aforementioned spills are confined to company property and most of the spilt oil is recovered and used.
The last point brought up is the financial commitment the Keystone XL pipeline owners made to green energy. TC Energy promised that 1.7 billion dollars would be invested in green energy. Considering that oil is Canada’s biggest export earner, the pipeline had the ability to bring in a lot of revenue for the country to invest in renewable energy—and Trudeau previously highlighted this. “We need resources to invest in Canadians so they can take advantage of the opportunities generated by a rapidly changing economy, here at home and around the world.” Oil and gas brings in more than 20-billion dollars a year in taxes for Canada, according to the Government of Canada’s website.
WHAT COULD THE FUTURE HOLD?
Last time the project was stopped, TC Energy sued the US for 15-billion dollars under the North American Free Trade Agreement—obviously when Trump approved the pipeline the lawsuit was dissolved—but now some analysts predict that the new lawsuit will demand 17-billion dollars. Some (like Alberta Premier Jason Kenney) are calling for harsh taxes to be put on the US but others call that unlikely and argue that Canada has little to gain from an action with a trusted ally. As stated earlier, it is a prominent worry that Biden’s move against the pipeline signals problems in the future of Canada’s relationship with the United States (while others dismiss this case as a one-off).
It is a question if TC Energy will hope for another American president more aligned with their values and goals—as it did happen last time—but others are already talking about how the imminent death of Keystone XL will shift the weight of responsibility (and potential wealth) to the Trans Mountain pipeline.
The building of the KXL pipeline has been stopped for now—to both the great joy and utter despair of Canadians everywhere. The Keystone XL has seen a lot of controversy and drama in its lifetime—and may come to see more, as it has risen from the grave once before. Or, is the nail finally in the coffin for the Keystone XL pipeline and the often called “diminishing” oil and gas industry? Perhaps the next historic election will answer these questions fully.
