Keystone XL pipeline developer abandons project; Tester, Daines displeased

In this Dec. 18, 2020 photo, pipes to be used for the Keystone XL pipeline are stored in a field near Dorchester, Neb. (Chris Machian /Omaha World-Herald via AP and Courthouse News)

(CN) — After 12 years of delays amid opposition by environmentalists, Native American tribes and Democratic U.S. presidents, the company developing the Keystone XL Pipeline has terminated the project.

Keystone XL would have had the capacity to transport 830,000 barrels per day of oil sands crude from Alberta, Canada to terminals in Nebraska, where it would have been tied in with a larger pipeline system that carries crude to refineries on the Gulf Coast.

Both Montana Sens. Jon Tester and Steve Daines expressed disappointment. 

“I am bitterly disappointed to learn that construction of the Keystone XL pipeline will no longer be moving forward. I supported this project for years because of the good-paying jobs and tax revenue it would have created for the folks who live and work in Montana,” Tester said in a statement. “It’s frustrating that national politics killed a project that would have yielded big benefits for our state, but I am going to keep fighting to create jobs in rural Montana, ensure our energy independence, and get our state’s economy firing on all cylinders.”

Daines blamed President Joe Biden for the cancellation.

“This is devastating news for our economy, jobs, environment and national security—and its entirely President Biden’s fault. It’s beyond clear that President Biden is beholden to extreme environmentalists, and Montanans and the American people are bearing the burden. While President Biden killed the American Keystone XL pipeline, he continues to support the Russian Nord Stream 2 pipeline. Biden would rather support Russian workers and jobs than Americans. Montanans and the American people are disappointed,” Daines said. 

Keystone XL faced fierce resistance from environmentalists who believe the United States must wean itself off fossil fuels to avoid catastrophic climate change.

Opponents were also concerned a spill would contaminate the Ogallala Aquifer, which provides drinking water for millions of people and irrigation for crops.

The province of Alberta agreed last year to invest $1.5 billion in the project, and its Canadian leg had been under construction for several months before Biden yanked the permit, the Canadian Broadcasting Corporation reported.

The province said it is in talks with TC Energy about options to recoup its investment.

“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,” Alberta Premier Jason Kenney said in a statement.

But Kenney said Alberta will keep working with its U.S. partners to supply crude to meet U.S. energy demands.

Two other pipelines move crude from Edmonton, Alberta’s capital, to Wisconsin and Washington state.

TC Energy promised an orderly wind down of the project.

“The company will continue to coordinate with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the Project,” it said.

The Keystone XL would have added to the 3,000 miles of oil pipeline in TC Energy’s portfolio. The company also operates 57,900 miles of natural gas pipeline and several power plants, including a nuclear facility.

TC Energy’s president François Poirier highlighted a silver lining in the failed project.

“Through the process, we developed . . . a first-of-its-kind, industry leading plan to operate the pipeline with net-zero emissions throughout its lifecycle,” Poirier said.

Buoyed by that progress, he said, TC Energy is evaluating the potential of powering its U.S. pipelines with renewable energy.

TC Energy’s announcement will likely bring an end to a lawsuit Texas and 22 other Republican-led states filed against the Biden administration in March, challenging Biden’s revocation of the construction permit for Keystone XL as unconstitutional.

The states claimed Biden had infringed on Congress’ commercial regulatory powers, and they stood to lose tens of millions of dollars in property taxes the pipeline would have generated once it was up and running.

Texas Attorney General Ken Paxton did not respond Wednesday evening to an email asking about the status of the litigation.

The Center for Biological Diversity called the pipeline’s demise a “landmark moment.”

“This is a landmark moment in the fight against climate change,” its senior attorney Jared Margolis said. “We need to keep moving away from dirty, dangerous pipelines that lock us into an unsustainable future. … Good riddance to Keystone XL!”