Energy infrastructure company TC Energy Corp. said June 9 it had terminated the $9 billion Keystone XL project, marking the end to a decade-long battle over the contentious pipeline.
Completion of the Keystone XL pipeline, which was expected to carry 830,000 bbl/d of oil from the Alberta oil sands to Nebraska, had been delayed for the past 12 years due to opposition from U.S. landowners, Native American tribes and environmentalists. Ultimately, it was U.S. President Joe Biden who dealt the final blow to the project after revoking a key permit on his first day in office.
Commenting on the decision to abandon the Keystone XL project, TC Energy CEO François Poirier said: “We value the strong relationships we’ve built through the development of this project and the experience we’ve gained.”
Alberta Premier Jason Kenney also commented on the project’s termination saying: “We remain disappointed and frustrated with the circumstances surrounding the Keystone XL project, including the cancellation of the presidential permit for the pipeline’s border crossing.”
Steve Weiler, partner at the international law firm Dorsey & Whitney LLP based in Washington, said the Keystone XL project’s termination had been expected following Biden’s executive order to revoke a Presidential Permit authorizing Keystone XL to cross the Canadian/U.S. border.
“There are other legal challenges to the pipeline, which could have amounted to ‘death by a thousand cuts,’” Weiler said in an emailed statement. “The revocation of the Presidential Permit was a mortal blow.”
However, he noted that the death of the Keystone XL project doesn’t necessarily mean other oil pipelines stand the same fate under the Biden administration.
“It’s not the simple,” he said. “A couple months ago, the Biden administration allowed the Dakota Access Pipeline (DAPL) to continue operating, despite a federal judge’s vacating an easement issued by the Corps of Engineers, while an Environmental Impact Statement is prepared to determine whether to issue a new easement.”
“Nevertheless, given the Biden administration’s all-government approach to combatting climate change, fossil fuel projects will likely have an uphill battle to obtain any required federal government permits or authorizations,” he added.
As for TC Energy, the Calgary, Alberta-based company was hit by CA$2.2 billion (US$1.81 billion) impairment charges related to the suspension of the Keystone XL project, resulting in a first-quarter loss.
“Through the process,” Poirier continued in his statement on June 9, “we developed meaningful Indigenous equity opportunities and a first-of-its-kind, industry-leading plan to operate the pipeline with net-zero emissions throughout its lifecycle.”
“We will continue to identify opportunities to apply this level of ingenuity across our business going forward, including our current evaluation of the potential to power existing U.S. assets with renewable energy,” he said.
In April, TC Energy announced it had started exploring opportunities to invest in renewable energy as part of plans to expand its power business and lower emissions.
Currently, the company has a Canadian power business with a 4,200-megawatt (MW) capacity. The company issued a request for information, according to an April release, seeking to identify wind energy investment opportunities that would generate 620 MW of “zero-carbon” electricity for its U.S. pipeline business.
Corey Hessen, TC Energy senior vice-president and president of power and storage, added in the April release that the company is also actively evaluating options to invest directly in renewable projects where possible. The capital investment could total about $1 billion, Reuters reported citing a note by analysts at BMO Capital Markets.
This article was updated at 4:44 a.m. CT on June 10. Reuters contributed to this article.
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