By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
In a week that’s seen me post on three depressing environmental topics – U.S. non-adherence to the Basel Convention, a UN report on soil pollution, and cyclone damage to the Sundarbans, I’m pleased to report some good news: the Canadian developer of the Keystone XL oil pipeline, TC Energy and the government of the province of Alberta, has abandoned the project, which would have transported 800,000 barrels of petroleum per day from Canadian tar sands to Nebraska, and then onward through existing pipelines to to the Gulf Coast.
Cancellation was expected after Biden on his first day in office revoked a construction permit for the pipeline. As the New York Times reported in The Keystone XL pipeline project has been terminated.:
On the day he was inaugurated, Mr. Biden, who has vowed to make tackling climate change a centerpiece of his administration, rescinded the construction permit for the pipeline, which developers had sought to build for over a decade. That same day, TC Energy, the company behind the project, said it was suspending work on the line.
On Wednesday, the company wrote in a statement that it “will continue to coordinate with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the project.”
Keystone XL would have expanded the original Keystone pipeline. Planning for the extension commenced at a time when oil market conditions were very different from those that prevail today. According to the WSJ in What Is the Keystone XL Pipeline and Why Did President Biden Issue an Executive Order to Block It?:
The expansion was originally conceived when oil prices were at historic highs—just before the 2008 financial crisis and American shale oil boom—as an artery that would pump 500,000 barrels of Canadian crude more than 1,700 miles from Alberta to the U.S. Gulf Coast. The line, which is now partially built but not operating, was eventually expected to transport 830,000 barrels of oil 1,210 miles from the Canadian oil sands to Steele City, Neb., where it would link to existing pipelines heading to Gulf Coast refineries.
Solid opposition and protest from environmental groups has in recent years hindered construction of pipelines. In 2015, Trump’s predecessor declined to approve a construction permit for the Keystone XL pipeline. Trump made good on campaign promises to support the Keystone XL project and other fossil fuel pipelines, via executive orders and other policies, as I discussed in Trump Approves Keystone XL Pipeline, Making Good on Campaign Promise:
[Trump’s] decision to approve the [Keystone XL] pipeline reverses a 2015 decision to scupper the project. That earlier decision was made over concerns that to do otherwise would undercut the apparent US leadership role in efforts to fight climate change, as reported in 2015 by The New York Times in Citing Climate Change, Obama Rejects Construction of Keystone XL Oil Pipeline:
“America is now a global leader when it comes to taking serious action to fight climate change,” Mr. Obama said in remarks from the White House. “And, frankly, approving this project would have undercut ]that global leadership.”
Despite those ostensible concerns, the previous administration allowed major expansion of US fossil fuel production via fracking (and withheld a key report on environmental consequences until well into lame-duck status, as I discussed in this December 2016 post, EPA Concludes: Fracking Harms Drinking Water).
Reactions to cancellation of the pipeline were predictable. On one side, according to the NYT:
Environmental activists cheered the move and used the moment to urge Mr. Biden to rescind the Trump-era permits granted to another pipeline, the Enbridge Line 3, which would carry Canadian oil across Minnesota. Hundreds of protesters were arrested earlier this week in protests against that project.
“The termination of this zombie pipeline sets precedent for President Biden and polluters to stop Line 3, Dakota Access, and all fossil fuel projects,” said Kendall Mackey, a campaign manager with 350.org, a climate advocacy group. “This victory puts polluters and their financiers on notice: Terminate your fossil fuel projects now — or a relentless mass movement will stop them for you.”
BREAKING: The Keystone XL oil pipeline has officially been abandoned by its developers.
— Public Citizen (@Public_Citizen) June 9, 2021
Victory! “When this fight began, people thought Big Oil couldn’t be beat,” said Bill #McKibben, who led sit-ins against #Keystone XL in 2011 at the White House. “But when enough people rise up we’re stronger even than the richest #fossil fuel companies.”https://t.co/q4rP4LjI1U
— Reinhard Bütikofer (@bueti) June 10, 2021
The prevailing reaction of fossil fuel proponents was also not a surprise. Again as per the NYT:
On Capitol Hill, Republicans slammed Mr. Biden. “President Biden killed the Keystone XL pipeline and with it, thousands of good-paying American jobs,” said Senator John Barrasso of Wyoming, the ranking Republican on the Senate Energy committee. “On Inauguration Day, the president signed an executive order that ended pipeline construction and handed one thousand workers pink slips. Now, ten times that number of jobs will never be created. At a time when gasoline prices are spiking, the White House is celebrating the death of a pipeline that would have helped bring Americans relief.”
The Bottom Line
Biden administration policy on its face appears less congenial to fossil fuel producers than Trump’s policy was. Whether that apparent shift represents a sincere change in emphasis, or is just a consequence of lower fossil fuel prices, isn’t altogether clear to this cynical observer.
I’ll however celebrate victories where I find them. This appear to be one.