In what some dubbed “Carnegie 1,” our newly appointed Prime Minister Mark Carney met with then-President Donald Trump. They have reportedly discussed reviving the controversial Keystone XL pipeline project. This planned 1,179-mile (1,897-kilometer) pipeline was designed to transport crude oil from the oil sands of Alberta, Canada, to Steele City, Nebraska. We know the energy sector is facing unprecedented challenges at this time. Concurrently, there’s a tremendous and increasing need for additional transportation options for Canadian crude oil.
Yet, in 2010, the now-defunct Canadian National Energy Board approved the Keystone XL pipeline. This pipeline was meant to connect up with an already-built and existing pipeline in Steele City. Yet the project has faced major roadblocks since its conception. It has claimed vindication in having overcome strong opposition from then Senator Barack Obama and, more recently, from the Biden administration. It took five years, but both administrations finally scuttled the project to spare the environment. The Environmental Protection Agency (EPA) had previously recommended that it not be approved because of its adverse effects on the environment.
Over the course of his presidency, Trump accelerated efforts to advance the Keystone XL pipeline plans, permitting the construction so that work could begin. That progress came crashing down when President Biden revoked its permits on his third day in office in January 2021. At full capacity, the pipeline would have shipped at least 830,000 barrels of oil daily. This ambitious plan led to significant gains and losses while it was in progress. Alberta’s provincial government had invested a significant C$1.5 billion (about $1 billion) into the project.
Calgary-based TC Energy was the original and last owner of the Keystone XL project. It then spun off its oil pipeline business to form the new entity called South Bow. A South Bow spokesman reaffirmed in written statement to the press that the company is no longer pursuing the project. This achievement even as Trump very recently suggested the U.S. should bring it back.
“We will continue to explore opportunities that leverage our existing corridor with our customers and others in the industry.” – South Bow spokesperson
As First Minister Carney noted, energy’s importance to trade discussions can’t be overstated. In short, he said, the intention is to keep eyes on the main prize — in trade and defense. He noted that there are “identified opportunities for material progress in trade in steel, aluminium and energy.” His remarks are indicative of a larger commitment to improve Canada’s energy infrastructure and meet the world’s growing energy needs.
The Keystone XL pipeline project has suffered defeat after defeat. As advocates push for its revival, there’s a new appetite to improve energy transportation between Canada and the United States. The current controversies highlight the disorienting world of energy policy in an age that is, at least nominally, more concerned with stewardship and respect for the planet.