The project was expected to cost US$8 billion.
However, Biden had long promised to rescind the presidential permit in keeping with his campaign promise to shift the U.S. from fossil fuels and towards clean energy.
The executive order published on the White House website said “following an exhaustive review,” the State Department and Biden “determined that approving the proposed Keystone XL pipeline would not serve the U.S. national interest.”
“That analysis, in addition to concluding that significance of the proposed pipeline for our energy security and economy is limited, stressed that the United States must prioritize the development of a clean energy economy, which will in turn create good jobs,” the order read.
The administration said the review also concluded that approving the project would “undermine U.S. climate leadership by undercutting the credibility and influence of the United States in urging other countries to take ambitious climate action.”
Speaking to CNBC last year, Biden said the pipeline “is tar sands that we don’t need — that in fact (are a) very, very high pollutant.”
Biden said claims that shutting down the Keystone pipeline would do undue damage to the oil industry are “just not rational,” adding that the arguments do not make any environmental or economic sense.
In a statement Wednesday evening, Prime Minister Justin Trudeau said the move was disappointing.
“”While we welcome the President’s commitment to fight climate change, we are disappointed but acknowledge the President’s decision to fulfill his election campaign promise on Keystone XL,” he said.
Trudeau said he spoke with Biden about the project last November, adding that Canada’s Ambassador to the U.S., Kirsten Hillman and others “made the case to high-level officials in the incoming administration.”
“Workers in Alberta, Saskatchewan, and across Canada will always have our support,” the statement read. “Canada is the single-largest supplier of energy to the United States, contributing to U.S. energy security and economic competitiveness, and supporting thousands of jobs on both sides of the border.”
Trudeau continued, saying despite the decision on the Keystone XL pipeline, he welcomed other executive orders Biden signed.
“I look forward to working with President Biden to reduce pollution, combat climate change, fight COVID-19, create middle class jobs, and build back better by supporting a sustainable economic recovery for everyone.”
Alberta Premier Jason Kenney slammed the decision during a press conference on Wednesday, telling reporters he was “deeply disturbed” by the move.
Kenney called the order a “gut punch” to both the Alberta and Canadian economies.
“The leader of our closest ally retroactively vetoed approval for a pipeline that already exists and which is co-owned by a Canadian government, directly attacking, by far, the largest part of the Canada-U.S. trade relationship, which is our energy industry and exports,” he said.
The premier called on the Trudeau government to ask the U.S. to “sit down and discuss the decision.”
“If, however, the U.S. government refuses to open the door to a constructive and respectful dialogue about these issues, then it is clear that the government of Canada must impose meaningful trade and economic sanctions in response to defend our country’s vital economic interests,” he said.
Just ahead of the announcement Canada’s Foreign Affairs Minister Marc Garneau told Global News that “from the beginning Canada has stated our position in support of Keystone.”
However, Garneau said the government was aware of Biden’s plans to rescind the permits.
“And we understand that and we respect that,” he said. “So we will be there, of course, for the people of Alberta and we will continue to work with the United States on the important question of energy security as we move forward.”
Garneau said he is “very optimistic” about the relationship between Canada and the U.S.“I named a bunch of areas of cooperation: trade, security, climate change, fighting racism,” he said. “And I think there’s an enormous amount of commonality that we have between our two countries.”
He said the U.S. is Canada’s “most important relationship.”
“But you can’t expect everybody on either side to always agree 100 per cent on everything,” he continued.
“So our relationship has been strong and has lasted for well since the beginning, and we will continue that relationship.”
White House Press Secretary Jen Psaki said Wednesday evening that Biden’s first foreign call as U.S. president will be with Trudeau on Friday.
“His early calls will be with partners and allies,” she said.
Psaki said she expects the leaders will discuss the pipeline expansion project.
Earlier on Wednesday, TC Energy Corp. suspended work on the Keystone XL project in anticipation of the permit being removed.
The Calgary-based company said it will suspend construction and warned there could be a “substantive” predominantly non-cash, after-tax charge to earnings in the first quarter of 2021.
TC Energy said the decision would lead to layoffs for thousands of unionized construction workers.
Biden also signed an order to rejoin the Paris Climate Agreement on Wednesday, a legally binding international treaty on climate change which his predecessor dropped out of in 2017.
-With a file from Global News’ Rachel Gilmore, The Canadian Press and Reuters
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