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Jakarta Post

Keystone pipeline pipe dreams?

  • John J. Metzler

New York   /   Wed, February 24, 2021   /   01:29 am
Keystone pipeline pipe dreams? Deer gather at a depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline in Gascoyne, North Dakota, Jan. 25, 2017. (Reuters/Terray Sylvester)

When the new Biden administration spoke grandly of “restoring America's place in the world,” that bold new relationship with Canada restarted with an insult. Indeed, while the United States and Canada are among the world’s best neighbors, trading partners, and security allies, the governments in Washington and Ottawa have often not kept to the spirit of close friendship.

In one of its first lengthy executive orders, the administration fired a hubristic salvo on climate policy; buried within pages of bromides was the news that the US would cancel its part of the joint Canada/US Keystone XL pipeline. The pipeline, which was mired in controversy since its start over a decade ago, was first blocked by the Obama administration and then revived by the Trump team. Already last year, candidate Joe Biden had promised to cancel the pipeline. 

A Wall Street Journal editorial stressed, “This is a slap at Canada.”  Indeed.

“Despite all the bonhomie and civility between Biden and Trudeau, the abrupt decision on Biden’s first day in office underscores just how irrelevant Canada and its prime minister are to the Biden administration,” wrote Derek Burney, a former Canadian ambassador to Washington.

Writing in Canada’s National Post, Ambassador Burney called the Keystone decision “disrespectful” if not “insulting.”  

Alberta Premier Jason Kenney whose energy rich province took what calls a “gut punch” for the Canadian and Alberta economies from Biden’s decision, has demanded legal challenges to the American action, but it is more than curious to see the tepid response by Justin Trudeau’s own government to this setback. 

Let’s face it, Trudeau’s touchy-feely Liberal government was never a fan of Alberta’s enterprise- driven Western policies, Kenney or Keystone for that matter.

For Trudeau’s Liberal party it’s time to move on from Keystone and to energetically embrace Biden’s and the United Nations’ climate policies as the greater greener good to preserving jobs and livelihoods on both sides of the border. 

Trudeau’s Trade Minister Mary Ng told Bloomberg, “I don’t think that getting into a trade war with the US is in the best interests of Canadian workers or the energy sector,” she added, “What we’ve got to do is find that common ground where Canadian interests are viewed and seen as American interests as well.”

When complete, Keystone XL would ship more than 800,000 barrels of crude oil a day from Alberta’s oil sands to US refineries. The pipeline represents of part of a wider US/Canada

Energy relationship whereby Canada has shipped US$838 billion worth of oil and gas to the US markets over the past decade. The foreseeable consequence of the US not buying accessible Canadian oil is purchasing petroleum from Russia or the Middle East. 

Keystone XL was on track to create as many as 60,000 direct and indirect jobs in both Canada and the US; the 1,200 mile pipeline would carry crude oil going through Montana and South Dakota and to Nebraska before linking up to Gulf Coast refineries. The pipeline avoids costly and more environmentally impactful overland truck and train shipping.

But on the American side of the border, the direct losses are 11,000 high paying union jobs in welding and heavy machine operations. The cuts coming at a time when the US economy is still losing jobs due to the COVID-19 crisis. AFL-CIO union leader Richard Trumpka, though having supported Biden in the election, was rightfully upset over the Keystone job losses.

Realistically Canadian/US trade is huge; part of the $525 billion two way trade in 2020. But before the pandemic, bilateral trade stood at $618 billion in 2018. Not surprisingly, China has replaced Canada as the US’ number one trading partner.

But there’s pushback from Western American states to the pipeline decision. Montana’s Attorney General Austin Knudsen has joined with 14 other attorney generals from across America to call upon President Biden to reconsider and reverse his Keystone decision.  Calculations are based on preserving skilled union jobs. Recalculations by Biden to rescind parts of his otherwise massive executive order, could offer an olive branch to Ottawa and more importantly to American workers and their families who feel disenchanted after a year of dispiriting pandemic policies. 

But Biden’s Keystone cancellation is probably more than a symbolic rebuff to Canada’s rich energy export sector. It’s a philosophical commitment to green energy and a powerful environmentalist movement actually on both sides of the border, who views fossil fuels and the skilled workers who extract them, as an expendable cost to a brave new world.

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The writer is a United Nations correspondent covering diplomatic and defense issues, and the author of Divided Dynamism: The Diplomacy of Separated Nations: Germany, Korea, China.