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Will Killing Keystone Be Biden’s First Salvo in the War on Energy?

A transition briefing note list of executive actions includes "Rescind Keystone XL pipeline permit."

By the time 159 million Americans cast their ballots in the 2020 presidential election, it was clear where President-Elect Joe Biden stood when it came to the nation’s oil and gas industry. From banning fracking to imposing new regulations in the name of environmental justice, America’s historic achievement of energy independence could come under threat over the next two to four years. With reports that Biden will cancel the Keystone XL pipeline on his first day in the White House, has the incoming Biden administration declared war on the fossil fuel energy sector?

Will 46 86 Keystone?

A briefing note from the Biden transition team contains a list of executive actions scheduled for the incoming president’s first day. One item consists of the words “Rescind Keystone XL pipeline permit,” according to the state-owned Canadian Broadcasting Corporation (CBC).

A lengthier version of the list has already been released by Biden’s Chief of Staff Ronald Klain. This did not include the Keystone XL decision, but Klain noted that it was not a complete list of planned decisions. If the reports are accurate, Biden would keep his pledge of ripping up Keystone approval if he won the 2020 election, effectively reversing President Donald Trump’s actions.

In a statement last spring, Stef Feldman, Biden’s policy director, said of the $9 billion pipeline project:

“Biden strongly opposed the Keystone pipeline in the last administration, stood alongside President Obama and Secretary [John] Kerry to reject it in 2015, and will proudly stand in the Roosevelt Room again as President and stop it for good by rescinding the Keystone XL pipeline permit.”

On Inauguration Day, will it be a promise made and a promise kept?

Keystone XL: A Primer

In 2008, TransCanada Energy and the province of Alberta proposed and commissioned the Keystone Pipeline System. This oil pipeline runs from Alberta’s Western Canadian Sedimentary Basin to refineries in Illinois and Texas, as well as tank farms and distribution centers in Cushing, OK. The 2.6 million miles of oil and gas pipelines are estimated to ship approximately 830,000 barrels per day from the Canadian tar sands to the U.S. Gulf Coast.

Keystone XL has been a contentious project, facing environmental protests and legislative hurdles in the United States and Canada. In November 2015, Obama accepted Kerry’s recommendation and rejected a permit for the oil pipeline. However, a few days after his inauguration, President Trump reversed the decision and approved the pipeline.

Proponents championed that Keystone XL was going to be the cleanest pipeline project ever constructed while creating thousands of high-paying jobs. TC Energy partnered with four labor unions that would have generated $2 billion in earnings for U.S. workers. Plus, the company worked with five First Nations groups regarding equity. Supporters averred that this initiative balanced economic benefits with environmental concerns.

Opponents argued that KXL would exacerbate climate change. Sen. Bernie Sanders (I-VT) recently tweeted:

“The Keystone pipeline is & always has been a disaster. I’m delighted that Joe Biden will cancel the Keystone permit on his first day in office. With all of the major crises facing America, we must never lose sight of the most existential threat facing our planet: climate change.”

Canadian Prime Minister Justin Trudeau revealed that he pressed Biden on Keystone following the November election. Despite greenhouse gas emissions falling about one-third over the last 20 years, and the Liberal government slapping a national carbon tax on Canadians, it appears that Trudeau’s pleas were not enough to convince the Biden camp. Oil and gas continue to be the Great White North’s largest exports, and its biggest trading partner is its neighbor to the south. For a fragile economy and recovery – both nationally and provincially – this could be devastating news.

But if this is a black eye to the Trudeau government, it will be a more significant blow for Alberta’s United Conservative Party Premier Jason Kenney. He invested $1.5 billion of taxpayer dollars in the project, plus about $6 billion in loan guarantees, to ensure KXL would be completed.

War on Energy?

The proverbial shots have been fired at the U.S. oil and gas industry. Is this the peak of Biden’s war on energy, or is there more to come? Despite paying lip service to environmentalists and adding to federal regulations for eight years, even Obama realized the importance of crude to the broader economy and American households by removing a ban on crude oil exports, allowing output to soar during his reign. Perhaps Biden will appeal to his moderate instincts, something the country may have seen as he reversed his fracking ban stance. Or, as many conservatives warned since Biden’s nomination, will he serve as the Manchurian candidate for the radical left, doing the bidding of the fringe elements within the Democratic Party?

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Read more from Andrew Moran.

Read More From Andrew Moran

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