Advertisement

Alberta finance minister defends $1.3B loss on Keystone XL pipeline as ‘calculated decision’

Click to play video: 'TC Energy terminates Keystone XL expansion project' TC Energy terminates Keystone XL expansion project
WATCH ABOVE: TC Energy has terminated the Keystone XL pipeline expansion project, costing Albertans an estimated $1.3 billion. Jackie Wilson reports. – Jun 10, 2021

Alberta’s finance minister says the province’s $1.3-billion investment of taxpayers’ money in the now-defunct Keystone XL oil pipeline project was a prudent gamble given the potential payoff in profits and jobs.

“We did commit to delivering on pipelines, and we made a calculated decision around investing in the KXL pipeline, a pipeline that would have provided $30 billion of wealth creation for Albertans over the next 20 years,” Travis Toews told the house Thursday.

Read more: Keystone XL pipeline is officially dead. What does this mean for Canada?

Energy Minister Sonya Savage added the decision meshed with a broader commitment to grow Alberta’s wellspring industry.

“In this province, we produce over three million barrels a day of oil from the oilsands alone,” said Savage.

Story continues below advertisement

“If prices go down because we don’t have enough pipeline capacity, we can lose hundreds of millions of dollars in provincial revenue.”

They made the comments a day after the project operator, TC Energy Corp. of Calgary, officially abandoned the multibillion-dollar cross-border project.

Read more: TC Energy terminates Keystone XL pipeline months after Biden revokes permit

Premier Jason Kenney and his United Conservative government, in early 2020, committed $1.5 billion in direct financing and $6 billion more in loan guarantees to TC Energy Corp.

The KXL expansion project was to take more Alberta oil across the United States and down to ports and refineries on the Gulf Coast in Texas.

Click to play video: 'Developer pulls plug on Keystone XL pipeline' Developer pulls plug on Keystone XL pipeline
Developer pulls plug on Keystone XL pipeline – Jun 10, 2021

Around that time, the project faced multiple court challenges. The emerging U.S. Democratic party candidate, now President Joe Biden, promised in his election campaign to cancel it.

Story continues below advertisement

Biden did so in January on his first day in office, saying more product from Alberta’s oilsands does not mesh with his larger goal of combating climate change.

Opposition NDP critic Joe Ceci, during question period, renewed a call for the government to release all details surrounding the contract to confirm the calculated $1.3-billion hit to Alberta’s bottom line.

Read more: Members of Alberta UCP caucus nix NDP bid to seek details of failed Keystone XL deal

Ceci characterized the decision to invest in Keystone XL an irresponsible gamble given that the project was already in jeopardy when the line’s backer, then-U.S. president Donald Trump, was facing stiff opposition to retain the presidency.

“The UCP gambled wrong,” said Ceci.

“Yesterday’s loss is another example of how this premier has failed our energy sector.”

Kenney has promised his government will sue the U.S. government to recoup the money under legacy rules tied to the old North American Free Trade Agreement, or NAFTA.

NAFTA has been replaced by the United States-Mexico-Canada Agreement, but investors can still sue under NAFTA until the middle of 2023.

Sponsored content