Observers say the election of Joe Biden as U.S. president likely spells the end of the Keystone XL oil pipeline, but his environmental agenda will help Canadian energy companies better compete with their American rivals.
John Baird, a former minister of foreign affairs in the Stephen Harper government who is now a senior adviser for law firm Bennett Jones, says Keystone XL is a high-profile target for Biden’s administration and he will likely carry through with his campaign pledge to withdraw its presidential permit.
He adds, however, that Biden’s agenda is better aligned with Canada’s federal stance on climate change and predicts his influence on U.S. regulatory and environmental systems could make Canadian companies more competitive with their U.S. peers.
Biden was vice-president in the Barack Obama government which delayed Keystone XL for years before rejecting it in 2015, a decision that was reversed when Donald Trump became president.
Last March, Calgary-based TC Energy Corp. approved construction of the pipeline designed to transport up to 830,000 barrels per day of oil from Alberta to Nebraska after the Alberta government agreed to invest about $1.5 billion as equity and guarantee a $5.5-billion project loan.
Richard Masson, executive fellow with the University of Calgary’s School of Public Policy, says Alberta’s current oil production capacity can be transported by existing pipelines plus about 900,000 barrels per day from Enbridge Inc.’s Line 3 replacement pipeline late next year and the Trans Mountain expansion by 2023.
However, he adds those lines don’t provide any room for future growth, which means that billions of dollars in oil-related capital investment in the province will likely continue to be withheld.
“I believe Alberta’s going to grow production a million barrels a day between now and 2030 and the world needs that,” said Masson.
“In that world, we need Keystone XL, so this is not good news for us.”
The Canadian Press