Keystone XL Oil Project Abandoned by Developer -- Update
June 09 2021 - 6:39PM
Dow Jones News
By Timothy Puko
Canada's TC Energy Corp. and the Albertan provincial government
said Wednesday they would scuttle the Keystone XL oil pipeline
project, bringing to an end a yearslong controversy over an effort
to pipe more Canadian crude to the U.S.
The decision had been expected after President Biden used his
first day in office to revoke a key permit for the pipeline to
cross the country's northern border, shutting down
construction.
It is a victory for environmentalists who have campaigned to
block new pipeline construction as a way to limit oil consumption
that contributes to global warming.
Groups like 350.org, which has fought the Keystone XL project,
have also pressured Wall Street and saw activist investors win
board seats at Exxon Mobil Corp.
The group pointed to its own history of leading sit-ins against
Keystone XL in front of the White House. And it said it would work
to defeat more pipelines.
"When this fight began, people thought Big Oil couldn't be
beat," the group's founder, Bill McKibben, said. "But when enough
people rise up, we're stronger even than the richest fossil-fuel
companies."
TC Energy gave little explanation for its final decision in a
Wednesday news release. It alluded to Mr. Biden's decision and said
it had completed a comprehensive review of its options before
making the final decision to terminate the project. It said that
going forward it would build its businesses in shipping and storing
natural gas, liquid fuels and power to meet growing North American
demand for cleaner fuels.
"We value the strong relationships we've built through the
development of this Project and the experience we've gained," TC
Energy Chief Executive François Poirier said.
Mr. Biden's action was a major setback for Canadian oil
producers and the Canadian government, which had urged Mr. Biden to
help salvage the $8 billion project immediately after his election.
Keystone XL has been mired in court challenges and left in limbo by
shifting U.S. political leadership since it was initially proposed
in 2008.
That was a time of record oil prices, and the pipeline was
pitched as a key artery to eventually bring 830,000 barrels a day
of Canadian crude from Alberta to Nebraska and then to refineries
on the U.S. Gulf Coast. Since then, Canadian oil producers have
been rocked by falling oil prices and the government had doubled
down on getting approval for the project as a lifeline for the
industry.
But Mr. Biden agreed with environmentalists who said opening
that avenue for more crude into the U.S. conflicted with a need to
respond to climate change by shifting to cleaner sources of energy.
He said allowing the project to go ahead would undercut the
country's international credibility as Mr. Biden tried to push
other countries to lower their greenhouse-gas emissions.
"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," said
Jason Kenney, premier of Alberta. The province had invested $1.1
billion in the project and will now have to swallow the cost. The
government said it would continue to explore its options to recoup
its money.
Mr. Biden 's decision, which reversed the pipeline's approval
first given by former President Donald Trump, came before TC Energy
could finish construction in the U.S. It promptly suspended
construction, leading Mr. Biden's critics to decry layoffs that
came from the decision and several Republican states to launch a
lawsuit to overturn it.
Write to Timothy Puko at tim.puko@wsj.com
(END) Dow Jones Newswires
June 09, 2021 18:24 ET (22:24 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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