Trump gives green light to Keystone XL construction, subject to renegotiation

Mac Olsen
Premier Rachel Notley has welcomed the news that the Trump Administration is allowing the Keystone XL pipeline to be constructed, although that is subject to renegotiation.

The premier held a news conference in Edmonton on January 24 to discuss the announcement, and she touted the U.S. as an important trading partner for Alberta.

“The U.S. is an extremely valuable customer of ours. Any step that allows us to better support the needs of one of our largest customers is good news,” says the premier. “This project is going to create good jobs here in Alberta – and that’s my focus. Support our workers, create good jobs and diversify our economy. More energy workers at our rural hotels is a good thing. More equipment out in the field is a good thing. Busier restaurants and hardware stores across Alberta are all good things.

Although this is a good opportunity to expand into the U.S. market, it’s not the only strategy the government is pursuing, she adds.

“While discussions around Keystone XL progress, we are focused on building Canadian pipelines to Canadian tidewaters. As any small business owner will tell you, you can’t have only one customer. You have got to diversify. While we value the United States as a key trading partner, we also know that the world is changing fast.

“We need to exert more control over our own future, especially our energy future. Getting a Canadian pipeline built to Canadian tidewater is the best way for our world class energy producers to sell our oil at world class prices, on the global market. That’s what we want – a better deal for our industry, for our economy, for our workers and for the future stability of our economy.”

A reporter noted that Trump wants to renegotiate the terms of the Keystone XL agreement and she was asked if she knew what it meant. Notley said the Alberta government has to monitor what exactly the Trump Administration means by this.

The federal and provincial governments have to work together to ensure Canadian oil gets to market, she adds.

“We’re aligned with the federal government in that we also collectively understand the strategic importance of getting Canadian access to Canadian tidewater. I do think they don’t run at odds. I think that we can work together on it and that’s what we’ll do.”

Notley does not believe reassurances will have to be offered to environmentalists about the Keystone XL pipeline because of her government’s Climate Leadership Plan.

“The Climate Leadership Plan that we’ve put in place, remains in place. I am confident that energy producers in Alberta who have signed on to it are going to be working so hard to reduce their emissions in the oil sands, will continue to do that work.

“Particularly with the oil sands, this is an industry that, unlike other parts of oil and gas, it doesn’t stop and start on a six-month cycle.
Investments are made on 20- or 30-year cycles at the minimum. So, regardless of what the political climate is in any given jurisdiction at any given time, what we know and what, quite frankly, most progressive leaders in industry know, is that there’s going to be a world demand for more progressive, more sustainable, more responsibly produced non-renewable energy products. Oil and gas to be specific.”

Nor does she believe that the U.S. government’s announcement about Keystone XL will complicate her government’s work with the federal government and other provincial governments regarding energy policy development.
The federal government’s response
Prime Minister Justin Trudeau and his cabinet were holding a retreat in Calgary when President Trump made his announcement. The Calgary Herald noted that Natural Resources Minister Jim Carr said he doesn’t know what kind of terms Trump is referring to, but he isn’t concerned about new conditions hanging over the project.
“This is a very good moment for Alberta,” he told reporters on the second day of the Liberal cabinet retreat at the Fairmont Palliser.
“This decision will result in many, many jobs for Albertans and it’s also a sign that there is a recognition by the new American administration that Canada can be a source of economic development and of job creation on both sides of the border.”
The Keystone XL detractors
Not everyone is pleased with President Trump’s announcement to greenlight Keystone XL. Patrick DeRochie of Environmental Defence in Toronto issued a statement condemning the move.
“As President Trump revives Keystone XL, the federal government needs to revisit its 2010 pipeline approval that was done without any consideration for Canada’s climate commitments.
“The National Energy Board (NEB) evaluated KXL under a flawed process that lacks credibility. The federal government has acknowledged this and is undertaking a review of the energy regulator. Once reformed, the NEB must look at projects in a new light – including Keystone XL.
“The evaluation of energy projects needs to include a credible climate test – to see if the project fits with Canada’s climate commitments. KXL was approved before Canada signed and ratified the Paris Climate Agreement and before the Pan-Canadian Framework on Climate Change was put in place.
“With the recent approval of Line 3 and Kinder Morgan, there is no more room for pipelines under Alberta’s legislated cap on tar sands emissions. Canada’s carbon budget cannot accommodate an additional 830,000 barrels per day of pipeline capacity and the estimated 22 additional megatons of upstream emissions the pipeline would enable.
DeRochie also questions the economic value of Keystone XL and he says it isn’t required.
“There is no economic rationale to support the construction of yet another tar sands pipeline. Current tar sands pipeline capacity is underutilized and the price of oil is too low to justify new tar sands projects.
President Donald Trump’s executive order
In the morning of January 24, President Donald Trump signed an executive order that would allow TransCanada Corp. to apply for a permit to build the pipeline. But the President has said it will subject to renegotiation and his emphasis is on the jobs that it will create in the U.S., with pipeline being built by American workers too.

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