TC Energy Terminates Keystone XL

FRIDAY, JUNE 11, 2021

On Wednesday (June 9), Canadian pipeline company TC Energy Corp. announced that it is officially canceling the $8 billion Keystone XL pipeline project.

The decision arrives after more than a decade-long battle of whether the project would be carried out despite its environmental risks.

Reaching a Decision

While the project has long been debated, the start of the project’s official cancelation can be attributed to President Joe Biden’s Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.

In signing the executive order the day he took office (Jan. 20), Biden revoked the presidential permit previously passed by former President Donald J. Trump—a first step in dismantling other climate and environmental rollbacks.

On the same day, Biden also rejoined the nation with the Paris Climate Agreement, banned new oil and gas drilling leases in the Arctic National Wildlife Refuge and ordered a review of more than 100 policies including on vehicle fuel economy standards and limiting pollution from the fossil fuel sector.

Without the presidential permit, the project was unable to cross the U.S.-Canadian border, ultimately forcing construction on the project to cease. Following the Executive Order, Canadian pipeline company TC Energy Corp. announced that they had suspended all work on the project, which meant the layoff of thousands of union workers.

In wake of the cancelation, TC Energy reported that it was “disappointed” and planned to review Biden’s decision, assess its implication and consider other options. Canadian Prime Minister Justin Trudeau also issued a statement saying, “While we welcome the President's commitment to fight climate change, we are disappointed but acknowledge the President’s decision to fulfill his election campaign promise on Keystone XL.”

According to reports, Trudeau had been a longtime supporter of the project, as it created a balance in his priority to fight climate change and for Canada’s energy industry in Alberta and other western provinces.

While the project has been debated for over a decade, on the other side of the spectrum, environmentalists and Indigenous communities are praising the decision. Anthony Swift, the Director of the Canada Project at the Washington-based Natural Resources Defense Council, an environmental group long critical of the oil sands, said the decision signaled a new era.

In wake of the revoked permit, in March attorneys general from 21 states announced a lawsuit to overturn Biden’s cancelation of the permit. Led by Ken Paxton of Texas and Austin Knudsen of Montana, in addition to attorneys general from the other 19 states accuse Biden of overstepping his authority in revoking the presidential permit required for the Keystone pipeline project.

The suit argues that because the pipeline is slated to run through multiple U.S. states, it is Congress who should have a final say over whether the infrastructure is built and that Biden doesn’t have the unilateral authority to change energy policies previously set by the U.S. government.

The lawsuit was filed in the U.S. District Court in Texas.

Official Cancelation

Despite TC Energy having already constructed some 300 miles of the 1,200-mile project or Alberta’s investment of more than $1 billion into the project over the last year, officials announced that they’d reached an agreement with TC Energy to exit that partnership.

To make matters worse for TC Energy, the company was reportedly hit with impairment charges during the first quarter in relation to Keystone XL’s suspension, costing them $1.81 billion.

“We remain disappointed and frustrated with the circumstances surrounding the Keystone XL project, including the cancelation of the presidential permit for the pipeline’s border crossing,” Alberta Premier Jason Kenney said in a statement. According to The Guardian, the project had served as a flashpoint in U.S.-Canada relations.

Robin Rorick, American Petroleum Institute vice president of midstream and industry operations also issued a statement regarding the project’s cancellation, saying, “It's unfortunate that political obstructionism led to the termination of the Keystone XL pipeline. This is a blow to U.S. energy security and a blow to the thousands of good-paying union jobs this project would have supported.”

“President Biden killed the Keystone XL Pipeline and with it, thousands of good-paying American jobs,” Wyoming Sen. John Barrasso chimed in. “On Inauguration Day, the president signed an executive order that ended pipeline construction and handed one thousand workers pink slips. Now, ten times that number of jobs will never be created. At a time when gasoline prices are spiking, the White House is celebrating the death of a pipeline that would have helped bring Americans relief.”

However, for climate activists and environmentalists, the groups reportedly celebrated the decision.

“For 13 years, an international movement of frontline communities in the U.S. and Canada, Indigenous leaders, and environmentalists fought back against this terrible proposed project at every turn,” Sierra Club Executive Director Michael Brune said in a statement. “Today, we can say yet again, that our efforts were a resounding success.”

Larry Wright Jr., chairman of the Ponca Tribe of Nebraska, added, “On behalf of our Ponca Nation we welcome this long overdue news and thank all who worked so tirelessly to educate and fight to prevent this from coming to fruition. It's a great day for Mother Earth.”

While additional details have not been provided, TC Energy and Alberta report that they plan to try to recoup the government’s investment. TC Energy has also reported that it would continue working with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the project.

Keystone XL Pipeline History

TC Energy, then known as TransCanada, announced its plans in 2008 to build a pipeline that would carry 830,000 barrels of crude oil daily from Hardisty, Alberta, Canada through the Great Plains to refineries on the Texas Gulf Coast.

In 2011, the $5.2 billion pipeline began flowing crude oil through seven U.S. states, where it was envisioned to eventually work in tandem with the $8 billion Keystone XL Pipeline. The Keystone Pipeline as a whole is reported to handle up to 830,000 barrels of crude oil daily. Additionally, TC Energy had touted that the project would enhance North American energy security and planned to support 40,000 jobs in the U.S.

In 2017, former president Trump’s administration reversed his predecessor’s decision on the construction of the Keystone XL pipeline, allowing the 1,178-mile oil pipeline to move forward again. Keystone XL, a project of TransCanada, is part of the larger Keystone system and plans to transport oil from Hardisty, Alberta, in the western Canadian oil sands, to Steele City, Nebraska.

In April 2018, TransCanada revealed that approximately 9,700 barrels of oil spilled on farmland in Marshall County, South Dakota, on Nov. 16, 2017—considerably more than the 5,000 barrels the company originally estimated were lost.

Preliminary reports indicated that the leak may have come because of damage to either the pipeline itself or its protective coating, caused during construction 10 years ago. The Aberdeen News noted that if the current estimate is correct, that spill is the seventh largest in the U.S. since 2010.

By July, officials confirmed at least one section of the pipeline north of Britton, South Dakota, was being dug up for inspection. A year later, a federal report indicated that improper coatings were likely used on the pipeline. The Pipeline and Hazardous Material Safety Administration issued a notice of probable violation to pipeline owner TC Oil Operations, also known as TC Energy, in mid-June.

Another incident occurred in November 2019, causing over 380,000 gallons of oil to leak from the Keystone Pipeline, a total amounting to 9,120 barrels of crude oil. Sections of Keystone pipeline were shut down in response to the leak, which impacted a wetland area and, at the time, an estimated 2,500 square yards of land. TC Energy, formerly known as TransCanada, said that air quality, wildlife and environment monitoring was being conducted.

While the cause of the leak underwent investigation, North Dakota regulators also noted that drinking water supplies went unaffected, and TC Energy reported that the spill had been contained, and that it was using backhoes and vacuum trucks to recover the spilled oil.

The pipeline officially returned to service on Nov. 10, after receiving approval for a repair and restart plan by the U.S. Pipeline and Hazardous Materials Safety Administration.

However, at the end of the same month, North Dakota environmental scientist Bill Suess, the estimated amount of land affected by the oil spill had risen nearly 10 times the original estimate, although the amount of oil leaked remained the same.

During collection, the contaminated soil was stockpiled and taken to a landfill in Sawyer, North Dakota.

By January 2020, TC announced through a status report filing at the U.S. District Court in Montana that the company would kick off pre-construction efforts as early as February.

In March, TC announced that it had officially began preliminary work for pipeline construction slated to take place along the border’s crossing into Montana. Groundbreaking for the project was expected to commence in April.

However, on April 15, Morris ruled that the Corps had failed to adequately consider effects on endangered species such as pallid sturgeon, a massive, dinosaur-like fish that lives in rivers the pipeline would cross.

According to the Natural Resources Defense Council, the decision arrived as a result of a lawsuit that challenged the Corps’ failure to adequately analyze the effects of pipelines authorized under Nationwide Permit 12.

In May, although Morris said that he would reconsider the April ruling, announced that it would be upheld, canceling an environmental permit for the project. The ruling also has the potential to cause delays for other oil and natural gas projects as well.

While attorney Jared Margolis with the Center for Biological Diversity and other environmentalists were reportedly pleased with the decision, utility officials have announced that they intend to appeal. Among them, TC spokesperson Terry Cunha reported that the company would promptly file with the U.S. Court of Appeals for the Ninth Circuit.

The Corps and TC were given 60 days from the ruling to send in their appeals.

By the end of that month, TC Energy was reported to have completed construction on the first section of the Keystone XL oil sands pipeline. The section crosses between Montana and Canada and is 1.2-miles-long. However, the company is still working to resolve a recent courtroom setback, threating the entire project’s completion.

According to Erin Loranger, a spokesperson for Montana Gov. Steve Bullock, the state still required plans to ensure that TC Energy employees could prevent the spread of the novel coronavirus. At the time, South Dakota Gov. Kristi Noem was working with two Native American tribes—the Cheyenne River Sioux Tribes and the Oglala Sioux Tribe—to have coronavirus checkpoints removed from various federal and state highways.

The tribes are reported by the Associated Press to have set the checkpoints up as to prevent the spread of COVID-19 from entering their reservations, as the checkpoints connect to several potential Keystone XL construction sites. Noem has threatened to sue the tribes, should they refuse to remove the checkpoints and has since appealed to the White House to investigate.

Additionally, TC Energy was also awaiting a permit from the Corps to build the pipeline across hundreds of streams, wetlands and other water bodies along its route.

In August, TC Energy signed a project labor agreement with four U.S. labor unions, including the International Union of Operating Engineers, Laborers International Union of North America, the International Brotherhood of Teamsters and the United Association Union Plumbers and Pipefitters. The agreement was expected to create 10,000 construction jobs.


Tagged categories: Environmental Protection; Government; Greenhouse gas; Infrastructure; NA; North America; Oil and Gas; Ongoing projects; Pipelines; President Biden; President Trump; Program/Project Management; Project Management

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