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In letter to PM, Kenney calls for consequences or compensation over Keystone XL cancellation

Alberta Premier Jason Kenney is repeating his calls for economic retaliation for the cancellation of the Keystone XL pipeline, or at least some compensation for TC Energy and the province for the loss of billions of dollars. 

In a letter to the Prime Minister, Kenney accuses Justin Trudeau of failing to advocate for the project. 

“By retroactively revoking the presidential permit for this project without taking the time to discuss it with their longest standing ally, the United States is setting a deeply disturbing precedent for any future projects and collaboration between our two nations,” the letter reads.

“The fact that it was a campaign promise makes it no less offensive. Our country has never surrendered our vital economic interests because a foreign government campaigned against them.”

Kenney proposes his government join Ottawa in pushing for shared climate goals that mirror the integrated North American energy system. 

WATCH | Kenney discusses his call for reprisals over Keystone cancellation:


Alberta Premier Jason Kenney says the federal government ‘folded’ in response to U.S President Joe Biden’s decision to revoke the Keystone XL pipeline. 2:14

‘Proportional economic consequences’

Repeating calls he made in the immediate wake of the announcement, Kenney urged Justin Trudeau to seek “proportional economic consequences” for the decision.

“At the very least, I call upon the government of Canada to press the U.S. Administration to compensate TC Energy and the Government of Alberta for billions of dollars of costs incurred in the construction of Keystone XL to date.”

Kenney said the cancellation is a clear violation of the investor-protection provisions of the Canada-U.S.-Mexico Trade Agreement.

Trudeau’s government has repeatedly said that it supports the project and has made that clear to the new U.S. administration, but both the Prime Minister and Canada’s ambassador to the U.S. have said it is time to respect the decision and move on.

Speaking on Friday morning, Trudeau reiterated his disappointment in the cancellation and said he would raise the issue during his phone call with U.S. President Joe Biden scheduled for later in the day. 

“Obviously the decision on Keystone XL is a very difficult one for workers in Alberta and Saskatchewan who’ve had many difficult hits,” he said. 

“Over the past years we have been there for them and we will continue to be there for them and I will express my concern for jobs and livelihoods in Canada, particularly in the west, directly in my conversation with president Biden.”

Trudeau stressed he and the new president are on the same wavelength on fighting climate change and middle-class job creation, as well as the “values of Canadians.”

WATCH | Canada’s ambassador to U.S. on Keystone cancellation: 

Canada’s Ambassador to the United States Kirsten Hillman tells the CBC’s Adrienne Arsenault that she “respects” but is “disappointed” by U.S. President Joe Biden’s decision to cancel the Keystone XL pipeline permit. 0:47

First Ministers meeting

The letter comes one day after a First Ministers meeting where Ontario’s Doug Ford, Saskatchewan’s Scott Moe and Quebec’s François Legault all pushed the prime minister to take action. 

The details of that meeting were first reported by Global News and confirmed by CBC News. 

Those premiers expressed concerns that the decision and Canada’s response, could set a dangerous precedent as the U.S. examines Buy American protectionist policies as part of a pandemic rebound strategy. 

Ford, in Ontario, also expressed concern for the Line 5 pipeline, a target of Michigan governor — and Biden campaign co-chair — Gretchen Whitmer. 

Line 5 is part of Enbridge’s Lakehead network, which carries oil and liquids used in propane from western Canada to refineries in the U.S. and Ontario.

That pipeline moves about 23 million gallons (87 million litres) daily between Superior, Wis., and Sarnia, Ont., traversing parts of northern Michigan and Wisconsin.

Kenney has also noted that Gina McCarthy, Biden’s senior domestic adviser on climate change, has voiced opposition to Enbridge’s Line 3 replacement project, which aims to increase the amount of oil shipped from Alberta to Wisconsin. 

“The same political forces that succeeded … in obtaining this retroactive veto are seeking now to kill other critical pipelines,” Kenney said Wednesday.

NDP demands details of the deal

Alberta’s opposition NDP, however, blamed Kenney for the current situation, saying he was combative and continues to be so when the situation calls for diplomacy. 

Energy critic Kathleen Ganley said the Alberta government gambled away at least $1.5 billion in taxpayer money on the deal but refuses to release details about the investment.

“Albertans still don’t know exactly how much we are on the hook for. The premier has said that it’s around $1.5 billion in equity and construction costs, but that number could grow.”

She said the NDP would formally request that details of the deal with TC Energy to be released at an upcoming meeting of the public accounts committee.

“The UCP members of that committee will have to make a decision,” Ganley said. “Will they stand up for the public interest and make these documents public or will they vote to keep the details of this deal a secret from the public and prevent legislative oversight?” 

Setting a precedent?

James Coleman, an expert on energy law at Southern Methodist University in Dallas, also sees Biden’s move as setting a precedent that could endanger other projects should the president decide that he wants to shut them down as environmental groups urge.

“One thing we just don’t know is will President Biden go along with that agenda of shutting down existing pipelines, or is this sort of the high watermark of his anti-pipeline actions?” Coleman said in an interview with CBC News.

Coleman now thinks it’s an open question what Biden thinks about other cross-border energy projects, and imagines “the entire industry is nervously awaiting any indications” of where he stands. Biden has pledged to invest heavily in renewable energy.

But Kristen van de Biezenbos, an expert on energy law at the University of Calgary, doesn’t think Biden’s move signals anything for other projects.

“I don’t actually think it sets a precedent because Keystone XL’s permit was unique in being issued via executive order” from then-president Donald Trump, she said.

“Because it was done by executive order, it was entirely foreseeable that it could be cancelled by President Biden,” she added.

“If you take a look at the executive order that was signed by Trump that gives the permit for the border crossing for Keystone, it actually says it can be revoked at any time.”

She said other pipelines could still face challenges in the U.S., but not because of the Keystone XL decision this week.

“I would say that we should be very skeptical of any attempt to forecast what might happen to those projects based on what happened to Keystone XL,” van de Biezenbos said.

keystone xl alberta
Pipe ready to be used for the construction of the Canadian leg of the Keystone XL pipeline near the town of Oyen, Alta., is seen in September 2020. On Thursday, TC Energy said it would lay off 1,000 workers involved in the pipeline’s construction. (Kyle Bakx/CBC)

Keystone XL layoffs

The 1,897-kilometre Keystone XL pipeline, first announced in 2005, would have carried 830,000 barrels of crude a day from the oilsands in Alberta to Nebraska. It would then have connected with the original Keystone pipeline that runs to U.S. Gulf Coast refineries.

U.S. President Joe Biden’s revoking of the permit was part of a series of executive orders aimed at tackling climate change that also included re-entering the Paris climate accord. 

The Alberta government agreed last year to invest about $1.5 billion as equity in the project, plus billions more in loan guarantees.

As a result, the Canadian leg of the project has been under construction for several months with about 1,000 workers in southeast Alberta. 

On Thursday, TC Energy said it would be laying off those 1,000 workers. 

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