Alberta’s Opposition, researchers react after TC Energy walks away from Keystone XL pipeline

Pipes intended for construction of the Keystone XL pipeline are shown in Gascoyne, N.D. on Wednesday April 22, 2015. THE CANADIAN PRESS/Alex Panetta

Alberta’s official Opposition raised questions about Premier Jason Kenney’s competence with regard to fiscal decisions after his government announced Wednesday that the province is expected to be out $1.3 billion following the decision by TC Energy Corp., to walk away from plans to finish building the Keystone XL pipeline.

“Today’s loss is another example of how Jason Kenney has failed our energy sector,” NDP energy critic Kathleen Ganley said in a news release. “From his embarrassing (energy) war room (known as the Canadian Energy Centre) to his overdue and over-budget inquiry (into groups that are critical of the oil sector), he’s failed to create jobs.

“Now, his mismanagement and complete incompetence on this file has cost the people of Alberta north of $1 billion.”

READ MORE: TC Energy terminates Keystone XL pipeline months after Biden revokes permit 

Ganley called on the premier to be more transparent about Alberta’s investment into the failed pipeline project, and to “apologize to all Albertans for so irresponsibly gambling away their money.”

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The Opposition said it has also asked Alberta’s auditor general to examine all documents related to the government’s deal with Calgary-based TC Energy.

READ MORE: Alberta finance minister says final bill on defunct Keystone XL pipeline not ‘materially’ above $1.3B 

On Wednesday afternoon, shortly after news broke of TC Energy walking away from the project, the Alberta government announced it had “reached an agreement for an orderly exit from the KXL project and partnership.”

“Terminating our relationship with TC Energy’s project is in the best interest of Albertans under current conditions,” Sonya Savage, Alberta’s energy minister, said in a statement.

“We remain undeterred in our commitment to stand up for Alberta’s energy sector and the hard-working people it employs.”

Watch below: Some Global News videos about the Keystone XL pipeline.

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The Keystone XL project has faced significant opposition from a number of environmental groups, Indigenous groups and landowners for the past decade. The main arguments its opponents have made are that the project poses too great a risk to the environment if a leak were to occur and that it would result in increased availability of oil which would slow the transition away from fossil fuels needed to address climate change.

Watch below: Some videos about opposition to the Keystone XL pipeline.

Construction on the project was paused earlier this year after newly-elected U.S. President Joe Biden revoked presidential permits for the pipeline.

READ MORE: Biden revokes presidential permit for Keystone XL pipeline expansion 

Last year, the Kenney government agreed to take a $1.5 billion equity stake in the pipeline and to provide it with a $6 billion loan guarantee in an attempt to help TC Energy expedite the construction process.

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“It’s all over except for the counting of how much it’s going to cost,” said Lori Williams, an associate professor of policy studies at Mount Royal University in Calgary. “It’s going to hurt the government.

“It’s going to raise questions about Jason Kenney’s judgment investing so much money in a project that had a significant chance of not continuing because he knew the track record of one of the candidates for (U.S.) president.”

Richard Masson, an energy researcher and executive fellow at the University of Calgary’s School of Public Policy, said Wednesday’s developments were a surprise to no one since “there’s no real way for this pipeline to move forward.”

He said the conclusion of the Keystone XL pipeline saga may not reflect well on a number of different governments, but he believes there was actually “a lot of merit” to the project and he is concerned that how things turned out could perhaps set a precedent for other major infrastructure projects.

“TC Energy had done a great amount of work on it,” Masson said. “When you think about the future of investments, whether they be pipelines, or if we get to renewable energy in a big way we’re going to need high voltage transmission lines.

“Those kind of things that can attract the level of opposition that we saw on Keystone XL, if they get stymied, companies that have to invest hundreds of millions of dollars or billions of dollars to get them developed… if they can have their permits pulled, we’re just going to see less investment that we need to have the energy transition, for example.”

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READ MORE: Oil industry still recovering 1 year after commodity’s historic freefall into negative pricing territory 

Masson said as an oil-rich province, Alberta can see significant discounts in the price it gets for its commodity if it does not get it to market efficiently.

“We produce about three-million barrels per day from the oilsands right now,” he said. “If prices go down because we don’t have enough pipeline capacity, we can lose hundreds of millions of dollars in a very short period of time.

“I think what the UCP (government) was doing was making a calculated bet that if the pipeline was under construction, it would be harder for President Biden to cancel the permit. Unfortunately, that didn’t really hold any sway.”

Watch below: (From March 31, 2020) Premier Jason Kenney speaks about Alberta’s partnership with TC Energy on the Keystone XL pipeline.

Click to play video: 'Kenney announces partnership with TC Energy for Keystone XL pipeline'
Kenney announces partnership with TC Energy for Keystone XL pipeline

Alberta’s government has said it invested in the Keystone XL project, which had about 200 kilometres of pipeline already laid, because it was in the province’s long-term economic interest.

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The government said Wednesday that it believes the pipeline would have led to higher prices for Alberta oil and increased production of oilsands crude that would have generated “at least $30 billion in increased royalties over 20 years for Alberta taxpayers.”

“We remain disappointed and frustrated with the circumstances surrounding the Keystone XL project, including the cancellation of the presidential permit for the pipeline’s border crossing,” Kenney said in a statement. “Having said this, Alberta will continue to play an important role in a reliable, affordable North American energy system.

“We will work with our U.S. partners to ensure that we are able to meet U.S. energy demands through the responsible development and transportation of our resources.”

READ MORE: Keystone XL cancelling will stifle Canada’s oil industry for years: experts 

Ian Cameron, a spokesperson for Canada’s natural resources minister, issued a statement reiterating the federal government’s disappointment with Biden for killing the project.

“Today’s announcement by TC Energy follows the disappointing decision by President Biden,” his statement reads, in part. “We will continue to support and invest in workers in Alberta and across Canada.”

READ MORE: Feds asked themselves if Canada needs more pipelines after Biden scrapped Keystone XL 

Shortly after Biden revoked the Keystone permit, Kenney called on the federal government to press the U.S. for compensation as a result of the decision.

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Williams noted that after Biden revoked Keystone’s presidential permits, Kenney railed against the federal government arguing it had not done all it could to save the project and questioning if Ottawa’s response would have been different had the project affected another province.

“But that’s just not the case,” she said, adding that Wednesday’s development is a tough one for Kenney’s government given that she believes Albertans elected him “because he was promising jobs, a growing economy and pipelines.”

READ MORE: Alberta premier calls for compensation amid cancellation of Keystone XL 

“They thought he had a better chance of turning the economy around than (NDP Leader) Rachel Notley did, or at least they were willing to give someone who wasn’t in government a chance to accomplish that,” Williams said.

“I think they’re (Albertans) also looking for people who can work with the federal government to get favourable treatment… and good relationships… with other provincial governments.”

Williams said the cost of the Keystone investment will be just one of Kenney’s fiscal decisions that voters may keep in mind the next time they head to the polls, along with his government’s controversial push to have teachers’ pensions handled by AIMCo, which has come under fire for poor performance, and interest in possibly withdrawing from the Canada Pension Plan to create its own provincial fund.

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READ MORE: Alberta Teachers’ Association planning legal action over finance minister’s order affecting pension management 

“Kenney’s capacity as a financial steward is something that will be a focus of the next election campaign, and this will be one of the issues used to raise questions about whether he’s a capable steward,” she said.

A number of people and groups who advocate for environmental issues took to social media on Tuesday to celebrate TC Energy’s announcement.

Greenpeace USA tweeted that the development amounted to “a major victory that would not have been possible without the leadership of the Indigenous communities who stopped at nothing to resist against and end the destruction on their lands.”

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Dallas Goldtooth, an organizer for the Indigenous Environmental Network, tweeted that he believes people’s opposition to the project was heard in the end.

READ MORE: Indigenous opponents of Keystone XL pipeline speak out against South Dakota’s planned ‘riot boosting’ penalties 

“It’s official,” he tweeted. “We took on a multi-billion-dollar corporation and we won.

“And specifically, it was Oceti Sakowin, Ponca, Métis, Cree, Dene organizers in solid step with scrappy and determined non-native farmers/ranchers who made this happen.”

Had it been completed, the line was to have delivered 830,000 barrels of crude oil per day from Hardisty, Alta., to Steele City, Neb., before being transported to refineries on the U.S. Gulf Coast.

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–With files from The Canadian Press

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