Will Keystone XL be good for Canada? Depends who you ask
President Donald Trump signed a number of executive orders Tuesday to support construction of TransCanada’s Keystone XL pipeline project, which was first commissioned in 2010 and, if completed, would transport over 20 per cent of Canada’s oil exports to its southern neighbour.
The executive orders effectively give TransCanada the green light to reapply to build the pipeline extension. Trump’s predecessor Barack Obama killed the proposed pipeline in late 2015, saying it would hurt American efforts to reach a global climate change deal.
In the wake of Trump’s election, Canadian financial services providers TD and BMO Capital Markets both issued reports stating that approval of Keystone XL, which would carry oil from the Alberta oil sands to Nebraska, would support Canadian oil producers and boost the energy industries in Alberta and Saskatchewan.
But with Trump now following through on his campaign promise to approve the project, Canadian players remain divided on whether any job-creation and energy-supplying potential is worth the environmental impact.
WATCH: Prime Minister Trudeau backs Keystone XL pipeline
Prime Minister Justin Trudeau said Tuesday the pipeline extension would help Canada balance energy needs with environmental commitments.
“We can continue to support good jobs, including in the fossil fuel industry, while we improve our emissions standards, while we innovate and develop renewable resources, while we manage the long-term transition, that the planet needs to go through,” Trudeau said in a news conference.
The federal government is implementing a pan-Canadian climate change framework that includes a price on carbon, he said. Alberta has put a cap on emissions, he added. Plus, pipelines are a safer option than rail cars.
And he promised that his Liberal government would show leadership on the environmental front.
Canadian environmental groups disagreed, suggesting that the pipeline project’s job-creating potential was exaggerated, and its environmental footprint underplayed.
Mike Hudema, a climate and energy campaigner for Greenpeace Canada, urged Trudeau to defy Trump on Keystone XL.
“The question for Canadians is: will the Prime Minister continue to align himself with a climate denying Trump administration, or will he stand with the people and with science and start living up to his own commitments to the climate and Indigenous rights?” Hudema said in a statement.
“The Prime Minister can’t keep saying he will lead on climate while building three new tar sands pipelines. Alternative facts may work in the U.S. administration but they shouldn’t be tolerated here.”
Environmental Defence Canada pointed out that Keystone XL “was approved before Canada signed and ratified the Paris Climate Agreement and before the Pan-Canadian Framework on Climate Change was put in place,” and that the project would push Alberta beyond its tar sands emissions cap.
“The National Energy Board evaluated KXL under a flawed process that lacks credibility,” read a statement on Environmental Defence Canada’s website.
“With the recent approval of Line 3 and Kinder Morgan, there is no more room for pipelines under Alberta’s legislated cap on tar sands emissions. Canada’s carbon budget cannot accommodate an additional 830,000 barrels per day of pipeline capacity and the estimated 22 additional megatonnes of upstream emissions the pipeline would enable.”
The group urged the federal government to revisit its approval of the pipeline, and opined that there is “no economic rationale” to back the pipeline extension.
But Natural Resources Minister Jim Carr said that the regulatory approvals won’t be revisited, since the government decided it wouldn’t be fair to force projects to go back to square one as they look to modernize the approval process.
Carr said the government continues to maintain its twin pillars of the economy and the environment and Keystone XL doesn’t sway that balance.
“We believe that it is possible to have sustainable economic growth, creating important jobs in the energy sector, while at the same time maintaining our commitments to a lower carbon economy in the long term,” he said.
The project would be very positive for Canada, creating 4,500 construction jobs and deepening relations with the U.S., he added.
WATCH: We want Keystone built, federal natural resources minister says
Calgary-based TransCanada Corp. unsurprisingly welcomed the decision to move the project forward.
“KXL creates thousands of well-paying construction jobs and would generate tens of millions of dollars in annual property taxes to counties along the route as well as more than $3 billion to the U.S. GDP,” TransCanada said in a statement.
The company also touted its “best-in-class technology and construction techniques that protect waterways and other sensitive environmental resources.”
TransCanada isn’t the only Canadian company that stands to benefit from Keystone XL
Regina-based Evraz Group, which in 2009 won a contract to supply large diameter pipes to TransCanada, could also gain if the project is revived.
“The company participated in the Keystone project up to the point that it was shut down by the Obama Administration and are optimistic their company will continue to be involved in the project now that it has been approved to go forward,” Sasketchewan Premier Brad Wall said in a Facebook post.
Wall also posited that the Keystone XL project would create about 2,200 jobs “building the 530 kilometers of Keystone XL in Alberta and Saskatchewan” and would result in $3.5 million in additional property tax revenues in Alberta per year and $1.3 million in Saskatchewan.
Alberta premier Rachel Notley also welcomed Trump’s move on Keystone XL.
But federal NDP leader Tom Mulcair said moving ahead with Keystone XL would make for a “massive error,” and criticized Trudeau for supporting a project that’s incompatible with the Liberal government’s stated climate change goals.
“Mr. Trudeau, who was in favour of Keystone XL – is he actually going to approve that?” Mulcair said in an interview, pointing to Canada’s international commitments on reducing greenhouse gas emissions.
Trump has in the past described climate change as a fraud invented by the Chinese, Mulcair noted.
“We can’t let all of the bluster of Trump let us forget the essential aspect of the environment and greenhouse gas emissions and climate change.”
The criticisms of Trudeau come despite it being unclear whether he even has any ability at this stage to change the government’s mind on Keystone XL, which won federal blessing from the previous Conservative government long before it got held up in the U.S.
Meanwhile, Trump has signaled that approval of the project could hinge on “terms and conditions to be negotiated by us,” although details of specific conditions have not been forthcoming.
— With files from The Canadian Press
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