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U.S. Politics

Biden's rejection of pipeline throws 'wrench' in Canada, US ties

Prime Minister Justin Trudeau, despite championing climate action, has pledged to get the Keystone XL and other long-delayed pipelines built in order to get Canadian oil to new markets and to get a better price for it - Lars Hagberg / ©AFP
Prime Minister Justin Trudeau, despite championing climate action, has pledged to get the Keystone XL and other long-delayed pipelines built in order to get Canadian oil to new markets and to get a better price for it - Lars Hagberg / ©AFP

(AFP)

Prime Minister Justin Trudeau is eager to turn the page on four years of strained ties with Canada’s neighbor, but US President-elect Joe Biden’s plan to block a major oil pipeline complicates the reset, experts say.

“It’s not a great way to start a relationship,” pollster and former political strategist Tim Powers told AFP.

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“Given that the Canadian government has said it is very committed to the Keystone XL pipeline, to have the American administration signal that it’s going to be scrapped is not helpful,” he explained.

Biden is expected after his inauguration on Wednesday to immediately rescind a permit via executive order for the partially completed Keystone XL pipeline between Canada and the US.

The $8 billion pipeline would transport up to 830,000 barrels of oil per day from the Alberta oil sands, which Biden has lambasted as producing a “very, very high pollutant,” to refineries in coastal Texas.

The project was approved by Canadian regulators in 2010 but was then blocked by US President Barack Obama in 2015 due to environmental concerns — a decision that his successor Donald Trump reversed in 2017.

Ryan Katz-Rosene, a politics professor at the University of Ottawa, agrees that Biden’s decision “does throw a wrench in the Canada-US relationship.”

But more important, he said, “it makes things a little bit more uncomfortable for Trudeau in a domestic context.”

Oil is Canada’s top single export.

“For Canadians, we are talking about $100 billion in (annual) exports,” Alberta Premier Jason Kenney said on Monday. “So this is a matter that touches on Canada’s vital economic interests.”

He warned that blocking completion of the pipeline will kill jobs on both sides of the border, weaken the Canada-US relationship and undermine US energy security by making it more dependent on OPEC oil imports.

Trudeau, despite championing climate action, had pledged to get this and other long-delayed pipelines built in order to get Canadian oil — the third-largest reserve in the world — to new markets and to get a better price for it.

To that end, Ottawa bought the Trans Mountain pipeline to the Pacific coast in 2018 to prevent the project’s collapse. Kenney’s government invested more than $1 billion in Keystone.

If Keystone is nixed, there will be “real pain” in Canada’s oil-rich Alberta and Saskatchewan provinces — already reeling from a slump in oil prices (compounded by the pandemic) — as well as “a broader economic impact on Canada,” Powers noted.

– ‘Devastate thousands’ of Canadians –

Trudeau heads a minority Liberal government and could face snap elections at any time.

Opposition leader Erin O’Toole, who leads the Conservative Party, said Biden’s move would “devastate thousands of Canadian families who have already been badly hurt by the economic crisis.”

He called on Trudeau “to immediately reach out to the incoming US administration to stop this from happening.”

TC Energy Corp, the company behind the project, said the pipeline would be operational by 2023. On Sunday, it announced plans to use only renewable energy to power the pipeline in a bid to stop Biden from scrapping it.

News about the pipeline’s possible demise, meanwhile, was welcomed by New Democrats and the Green Party, whose leader Annamie Paul said the Biden presidency presented an opportunity to advance joint climate actions.

“We have the chance of a lifetime, as we look to the inauguration of President-elect Biden,” she said, “because this is a president who has made it very clear that the climate is going to be at the top of his agenda.”

“We should be using our diplomacy to work with them,” she said.

Resources Minister Seamus O’Regan said the government is continuing “to make the case for (Keystone) to our American colleagues.”

“Canadian oil,” he said, “is produced under strong environmental and climate policy frameworks, and this project will not only strengthen the vital Canada-US energy relationship, but create thousands of good jobs for workers on both sides of the border.”

But if there is political blowback for Trudeau, Powers opined it would likely be short-lived.

In the long term, he said, Trudeau may even score points with voters — especially millennials — by developing a broader partnership with Biden on climate change.

“They may try to frame it as something that helped advance the climate change agenda,” he concluded.

Michel COMTE

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