The U.S. will have to pay for canceling pipeline permits, federal drilling leases and other projects in the future, Interior Secretary Doug Burgum said.

A sovereign risk insurance would mean that, “if I'm TransCanada [now TC Energy] and I have a pipeline that we're building called Keystone XL and I have $3 billion in the ground,” the U.S. would have to reimburse that cost if canceling it.

Burgum spoke to energy industry members April 23 in Oklahoma City at a Hamm Institute for American Energy summit on powering AI.

Keystone XL was a TC Energy oil pipeline connecting the Western Canadian Sedimentary Basin to the Gulf Coast that was permitted by President George W. Bush in 2008.

The permit was revoked by President Obama in 2015, reinstated by President Trump in 2017 and revoked again by President Biden upon his inauguration in 2021.

A few months later, TC Energy abandoned plans to complete the project.

Say “the next administration comes along and by fiat on day one says, ‘Oh, nope. We're not doing that pipeline,’” Burgum said. Then “we have sovereign risk insurance.”

“It’s not like sovereign risk insurance that’s against another country. It's against our own country, which is a weird thing to think about, but if a future president wants to ‘pull a Biden,’ they would also have to write a check for $3 billion to that company,” he said.

The president who cancels the permit “would have to say ‘We're canceling this thing by fiat, but you get your money back that you've invested.”

Payment would be from a “sovereign risk insurance fund,” he said. “And so think of it like an insurance market, but it would be backed by the federal government.”

The point is to create a disincentive to future administrations to revoke permits.

“We're trying to get a financial aspect back to these policy decisions,” he said.

One of Biden’s last orders was to remove 625 million acres of federal minerals from future leasing. “That could have been a $10- or $20-trillion wipe [off] the balance sheet that belongs to you, your children and your children's children and future generations.”

Trump reversed the order upon his inauguration Jan. 20.

“We were able to turn that one around,” Burgum said.

“But if someone was going to do that, then there ought to be ‘Okay, you just took away [my leases, so] you’ve got to write a check.’

“There's got to be a financial cost if you're going to do these decisions where you're destroying our [federal] balance sheet or destroying a company's opportunity.”

The Trump administration is also looking to stockpile critical minerals, he said, such as “when China's dumping. When they're dumping to try to destroy a market, we should just go, ‘Hey, we'll buy all that.’”

A third plan is in “idea stage” only, Burgum said: A sovereign wealth fund that would make direct equity investments in strategic companies.

“Why wouldn't the wealthiest country in the world have the biggest sovereign wealth fund?” he said.

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