Politics

/

ArcaMax

Keystone XL may be sold for scrap if Biden moves to kill project

Robert Tuttle, Bloomberg News on

Published in Political News

The Canadian province that invested $1.1 billion of taxpayers’ money in the controversial Keystone XL project is now considering the sale of pipe and materials to try to recoup some funds.

“If the project ends, there would be assets that could be sold, such as enormous quantities of pipe,” Alberta Premier Jason Kenney said in a press conference Monday. “That would offset construction costs.”

With Joe Biden set to be sworn in this week, the U.S. president-elect’s campaign promise to cancel the crude pipeline’s license is haunting the Canadian oil sands industry. The decision may come via executive action on his first day in office, CBC News reported on Sunday, citing people it didn’t identify.

Alberta, home to the world’s third-largest crude reserves, has struggled for years with a lack of pipeline capacity to ship its crude to the U.S. Gulf Coast and other markets. TC Energy Corp.’s Keystone XL was one of the possible pipelines the industry was counting on to solve that.

The cancellation of Keystone XL would cost Alberta taxpayers just over C$1 billion ($785 million), Kenney said.

In March, Kenney’s government agreed to fund the first year of construction with a $1.1 billion investment and to guarantee $4.2 billion of loans as a way to jump-start construction.

 

The province and TC Energy have a “solid legal basis” to recoup damages through the courts, Kenney also said.

More than a decade old, the Keystone XL project was first rejected by former-President Barack Obama due to concern about climate change, but his successor Donald Trump issued a new permit when he took office.

The incoming Biden administration owes Canada the respect to at least sit down and discuss the project before taking action, Kenney said.

The Canadian Association of Petroleum Producers said that canceling the project would kill thousands of jobs and offered to work with stakeholders to find a solution to complete the pipeline.

©2021 Bloomberg L.P. Distributed by Tribune Content Agency, LLC