Joe Biden’s administration decided to cancel the Keystone XL pipeline project. The Democratic President’s measure means the loss of some 10,000 jobs and the uncertainty of a project that was in its fourth and final stage of construction and about to begin operations.
It’s a project that took more than 12 years to complete and consists of a pipeline to transport Canadian crude oil to the United States.
The oil company TC Energy and even unions tried to persuade the new president by explaining the benefits of Keystone XL: 10,000 jobs; a $10 million training fund; $500 million for suppliers and indigenous jobs; and 100% renewable energy to operate the pipeline.
However, the project has faced lawsuits during three U.S. presidential administrations; and now it is part of one of the first measures that Biden dismantles, which was backed by the Trump Administration.
What’s the Keystone XL pipeline and why is it such a controversial issue?
Keystone XL is an expansion of an existing pipeline that transports Canadian crude oil to the USA. The expansion was conceived when oil prices were at record highs with the goal of pumping 830,000 barrels of oil 1,210 miles from the Canadian oil sands to Steele City, Nebraska.
The controversy exists because environmental groups opposed the project considering it a threat of oil spills. They also cited that Canada’s oil sand is considered the most greenhouse-gas-intensive energy in the world.
Farmers, ranchers and Native American groups also opposed the pipeline because the project crossed ecologically sensitive areas and large sources of drinking water.
Despite its rejection by Barack Obama’s Administration, it was in 2016, with the arrival of President Trump that hopes of resuming the project to make it a reality were revived.
Trump had made the approval of Keystone XL one of his main campaign promises, and his administration went ahead granting approval during the first months of his Presidency; however, there were challenges in Montana and Nebraska so Trump decided to issue a new permit in 2019 allowing construction without environmental review.
Now with Biden becoming President, TC announced that it was committing to spend $1.7 billion on solar, wind and battery power to operate the partially completed pipeline, yet the incoming President signed an executive order canceling the pipeline’s permit to operate.
It is unclear how the Biden administration plans to address the loss of 10,000 jobs that would come with the end of construction of the massive pipeline.
Without the pipeline, would the United States resume trade with Russia and Venezuela?
A Wall Street Journal report revealed that the United States continues to receive half of its oil imports from Canada; and now with the project’s refusal, oil companies “could be forced to buy more oil from adversary states such as Russia and Venezuela.”