API agrees with Wall Street Journal: On first day, Biden offends Canada, kills thousands of jobs
President Biden issued a blizzard of executive orders on his first day in office, including a diktat to revoke the permit for the Keystone XL pipeline. This is a slap at Canada, and it sends a message to investors that playing by U.S. rules provides no immunity from arbitrary political whim.
TC Energy (formerly TransCanada) has been stuck in the quicksand of American politics for more than a decade. A 2004 executive order requires the State Department to approve cross-border projects. In 2008 TC applied for a permit to transport up to 830,000 barrels of crude per day from the Alberta oil sands to U.S. refineries on the Gulf Coast.
The Obama State Department found five separate times that the pipeline would have no material impact on greenhouse gas emissions since crude would still be extracted. Shipping bitumen by rail or tanker would result in 28% to 42% higher CO2 emissions and more leaks. No matter. President Obama in 2015 rejected the permit as an oblation to the Paris Climate accords.
President Trump gave the right of way, but legal challenges by anti-fossil fuel groups marooned the pipeline and ran out the clock on the Trump years. Now Mr. Biden is yanking Keystone’s permit and rejoining the Paris agreement. Neither action will matter to the climate.
Since 2000 the U.S. has led the world in energy-related emissions reductions as natural gas from shale hydraulic fracturing has replaced coal in power production. China’s Paris commitment doesn’t require it to cut emissions for another decade. Russia’s are set to rise for years. Last November Russian oil giant Rosneft launched a massive exploration project in the Arctic. “Mineral resources will remain a competitive advantage of Russia’s economy, and will determine the place and role of the country in the world,” Russia’s strategic mineral plan says.
Killing Keystone won’t keep fossil fuels in the ground. It will merely strand billions of dollars in Canadian investment and kill thousands of U.S. jobs while enriching adversaries and alienating an ally. Alberta Premier Jason Kenney has promised to “use all legal avenues available” to protect its Keystone investment if Mr. Biden killed the pipeline.
TC can avail itself of Nafta’s investor-dispute settlement provision until June 2022, which would allow it to recoup its investment. The company also has a strong legal case that the U.S. Constitution gives Congress, not the President, power over foreign trade and that Mr. Biden’s reversal violates due process.
A source says TC and unions tried to persuade the Biden team by explaining Keystone’s benefits to progressives, including 10,000 American union construction jobs; steel pipe made in the U.S.;üa $10 million Green Job Training Fund; $500 million for indigenous suppliers and jobs; and 100% renewable power to operate the pipeline.
No luck, and so TC announced layoffs on Wednesday. On day one Mr. Biden has already managed to kill high-paying, working-class jobs. Expect many more losses, since on Wednesday Mr. Biden also ordered executive agencies to review all Trump environmental policies, including auto and appliance emissions and land and species protections.
Mr. Biden is sending an early signal that the climate panic will trump nearly everything else in his Administration. The unstated but operative message from the Keystone kill is that he will use regulation and permitting to do the dirty work.